RE: Andromeda Operations Complete12 Nov 2019 13:18
Within HALO’s ability to buy it, I’d say, their capital funding strategy being to use cash flow, debt, structured finance and new equity, ie most options. There’s also the existing Engie facilities. Would HALO want it, and operatorship, and would any of the parties deal with it as a stand alone asset though? Not sure how the numbers would work, but assuming HALO’s 45% interest in a 40bcf discovery at Andromeda (ie 18bcf/3m boe) is 50% recoverable and worth $5 a barrel, that indicates a value of perhaps $7.5m in the ground. On that basis, the other 55% looks affordable. Spirit look like they’re going to be busy elsewhere eg with HUR West of Shetland, so might perhaps want to divest some assets. Friday’s a good day for good news, so hopefully we’ll hear something about Andromeda this week.
All we need now is a favourable CSN report, a PSOE/PP coalition who realise U mining and nuclear power are part of the solution (not problem) for the environment and jobs, support in all this from regional/local government, and for Mr and Mrs Piggy to get airborne.
I was tempted to think and suggest that because the disassembly process seems to have started, we can infer ops have been completed. And that had it been a complete duster, we'd have heard by now, on the basis there's no reason to sit on this news. And that if it's a discovery, news might come a bit later, as initial analysis and suspending the well might reasonably take a bit longer. But in truth, we simply don't know, cannot infer any of this, and must wait. At least we can be confident we won't have to wait for as long as we've been waiting to re-list! Got everything crossed.
31/7/19 Announcement Spudding of Andromeda North Well Hague and London Oil PLC, the oil and gas company with a full-cycle portfolio of production, development, appraisal and exploration assets focused on the Southern North Sea, is pleased to announce the spudding of the Andromeda North well on licence Block 42/12, in the Southern North Sea, in which HALO has a 45% working interest (Spirit Energy 55%). The Andromeda North well is targeting ca. 40 Bcf of resource, within the single well and is planned to be drilled to a total depth in excess of 3000m. The well is expected to take ca. 90 days to reach total depth, logging and in the event of a discovery will be suspended as a future production well.
No need to throw toys out of pram imo. Saloro might achieve, what, 10-12% in the market? They might still get it, but even if they don't, what's the difference, about £0.5m max? Perfectly manageable in this huge project on the cusp of production. And to be fair to Oaktree, they probably don't want more exposure, and note they are not standing in the way of another junior lender who might want to join the party. And, of course, they've said yes to a loan themselves, albeit on onerous terms. Knowing this share, some random sh*t will pop up and cause another headache before too long, but right now, there's no other major obstacles ahead. Nesting season's over too, so no more of those storks hopefully, either.
18% is eye-watering, and 3% on undrawn amounts is taking the p*ss, but I agree the good news is that a loan's been achieved. It's also a backstop, so better terms (also debt funding) from a third party lender is a possibility. It's perhaps lower risk at this later stage in the project, from a lender's perspective. Imo we've been beaten up by Oaktree here, but whilst we might lose this funding battle, we're definitely winning the war.
… plus confirmation of this €10m loan facility from Oaktree. Seems to be taking a while. I imagine Oaktree are being their usual reasonable selves over negotiating the interest rate/terms. I imagine the JV gives them right of first refusal to provide it, and they'll squeeze every drop of blood out of it they can.
RE: The Shadow of the Beaver is Elongated14 Oct 2019 10:45
Great find Broxy, lots of ifs but it might account for the rise, and I’m sure you’re right to say don’t read too much into potential claims against the state. Trying to make head or tail of this, the argument now might be that dismissal of this appeal might open the way for BKY to claim against the govt for financial outlay since 2015. Perhaps because expenditure since then on licensing applications, works and infrastructure (mine and community), kit purchase etc, was all done acting in reliance on the govt approvals at that point (2015), and might be claimed back should licensing not now proceed for reasons outside BKY’s control. (The assumptions being that licensing was expected to proceed back in 2015, and no outlay could be claimed back if the govt authorisations in 2015 are ruled unlawful in the courts). More simplistically, it might just simply be that an appeal against one previous authorization has failed, which removes a perceived hurdle, but there’s still the outstanding permits issues ongoing, which is still not looking great at the moment. Most importantly though, where does the beaver fit into all of this? What’s it even doing here?