Member Info for flundra

Maybe, no-one, no-one, no, imo is the answer to those questions, Love_You.

My understanding is that India are participating in the Arbitration because they have to under the dispute provisions in the Treaty, or to hedge their bets. However, their position is that domestic tax law overrides the treaty, so don't necessarily accept the tribunal's locus to rule on tax. How would India react to a substantial award to Cairn? You'd think if they had any sense they'd do what londoner7 says for the reasons he says, but I don't share his confidence sadly. It might depend on appetite for, and policy towards, foreign investment at the time of the award. Prising $1bn+ out of their hands won't be easy whatever the circumstances though, that's for sure. Ultimately if they won't pay up for whatever reason, I agree there'll be jack sh*t Cairn can do about it," internationally enforceable" or not.

This has got a long way to run unfortunately imo, unless they do a deal. Still can't believe this award decision seems to have been put back to not before late 2019, when we thought we were on the cusp of getting it. Ffs, this could go into the next decade. Get tf on with it.

Wtf..we seem to have gone from imminent to near enough another year (or more) for this final award to arrive. Workload and number of matters....o come on! They'll have forgotten what all this was about by the time they get round to making the award. I must try that excuse on the boss...
It might lead to the parties reaching agreement in the meantime I suppose so as to stop wasting any more time, but I suspect India isn't too bothered with the further delay and will just sit it out.

SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
On 23 January 2019, the Company announced that it had received a number of favourable assessments from various regulatory bodies including two from the Nuclear Safety Council relating to the pre-operational Surveillance Plan for Radiological and Environmental Affections and the pre-operational Surveillance Plan for the Control of the Underground Water. The Company awaits the recommendation report from the Nuclear Safety Council to the relevant Minister.
Other than as disclosed above, there were no significant events occurring after balance date requiring disclosure

Re funding, in Sept '18 AC said:

The [TEOL] acquisition announced today demonstrates a continuation of [HALO's] strategy for growth through lower risk projects in lower risk jurisdictions, through responsibly funding the Company whilst maintaining a lower cost base.

We'll know shortly what next steps have been taken to deal with the ongoing funding requirement within the strategy of responsible funding. I think HALO have normal healthy needs which are readily fundable (and not just through Engie), rather than are facing any sort of financial crunch. Certainly there's a lot of needs, and a question for shareholders is how confident they feel about HALO's ability to deliver quality responsible funding in the current market. Imo we should feel confident though, particularly given AC and the TEOL BoD's eg Barclays backgrounds and track records. There's some heavyweight financiers among them, and there are various funding options. Moreover, getting the gearing right with some decent funding arrangements alongside the early-stage cash build, should be a real driver for the SP imo.

IOG as I understand it are reliant on getting a farm out partner, and also may have some iffy convertible loans and other potentially dilutive securities. A different kettle of fish.

This IOG/RRE thing today emphasises how important funding is in this part of the o+g space imo. I think HALO have played it very well since suspension. Viz the Engie facility, the cash build and the share issue for TEOL. The next funding steps will be important too and hopefully the next announcement will update on it. More with Engie, and/or structured finance perhaps, and perhaps another II.

UK needs to get its act together. Nuts that it's only Hinkley C under way.

HALO have to get the capital allocation right of course up to and including decommissioning, but this is what they say:
The portfolio of assets to be acquired through the acquisition of Third Energy Offshore has significant potential for production growth through sensible capital allocation given the Group’s solid foundation of cash flow from the previous acquisition. The result would be a highly complementary and balanced portfolio focused on natural gas in the Southern North Sea (SNS). Going forward HALO will have long-life production, development and exploration activities within the SNS basin straddling the UK & Netherlands.

Imo investors in HALO have to believe it's a workable strategy, with bargains to be had as big oil divests "declining" assets for strategic (or fashionable!) reasons. Also interesting to see Shell reinvest in a targetted way with CLNR.

Yes, TE clearly like what they see at HALO, and may feel they have sufficient confidence and influence from their large shareholding, may be getting a director on the board, and might have seen a crackerjack CPR, and whizzy new funding facilities etc, you've also seen ghostwriter's thoughts, or like you say they may know an announcement's about to drop about completion of the mother of all N Sea deals that makes RRE look like it's still in nappies...all possible

I meant interesting in the sense of good re your suggestion btw

There's another article popped up on Europa press. As usual the mangled English version you get running it through google online translator is indecipherable. But the original version's got the word "manana" in it, and the SP's not doing anything, so I guess it's nothing to worry about.

Happier times the other side of the election hopefully.

Well you've had a few guesses there antofelli - take your pick!

I think I'm a bit more pessimistic than the other regulars because (rightly or wrongly) I think we completed on T101 with zero balances and mortgaged to the hilt. I don't claim to understand the intricacies of the Engie pre-paid offtake agreement, but I do think there's a significant financing cost to factor in.

On the other hand, the jaw-dropping "you what?!" moment for me was this 19.25%/£46m TEOL formula, and what that extrapolates to. Gives me a warm feeling, but we need detail. Interesting suggestion from you on that MTSparky, but it would be a hell of a risk for TE without a binding agreement on another deal. I liked your post on this yesterday ghostwriter, and am cautiously a bit more optimistic than you perhaps. It's still quite a leap from owning nearly 100% of the TEOL assets to a "mere" 19.25% of HALO, even given participation in T101 and HALO more widely. Perhaps there is indeed another unseen beneficial factor at play here.

BTW 125p would be a ca 1000% uplift from the suspension SP, at which point we knew a deal was in the offing, and about the Engie MoU.

Do you have a current SP figure in mind on current facts, ghostwriter?

125p

SP up a bit and it doesn't look like anyone's running for the hills. Delays bit frustrating though. No big problems, but they do need to gtf on with it imo. Maybe under-promise and over-deliver for a change, it's felt like the market's almost been expecting them to under-deliver on this update. Maybe getting wise or used to over-optimistic schedules.

No thanks ghostwriter, there's plenty of City types who can (and no doubt will) crank this up better than me. I just want into...!

!!

Scoff away, but you can see where I'm coming from with the £7 MTS. Peer comparison on production stats etc with the likes of RRE perhaps has us around £30 - 40m mcap. Indeed that's the more likely scenario imo.

But why did TE take "only" a 19.25% shareholding for £46m of assets eh? Answer me that!!

Wish I had! Agree a good comparable.

I looked at RRE’s Jan update at the time, when its mcap was ca £78m, with 2019 production estimate ca 11k boepd, cash ca £100m (albeit nearly half held as decommissioning security), and zero debt. All figs superior to HALO. But maybe the gap’s not so wide with HALO’s two big transformational deals and more to be done, formalised financing with Engie, and maybe structured financing ready too giving financial muscle and flexibility, cornerstone II aboard, a well regarded BOD with a new TE director perhaps, cash building, prospects rosy etc etc. And for dreamers like me, there’s also the tantalising extrapolation from a 19.25% TE shareholding for the £46m TE assets ultimately suggesting around £7ps and a mcap north of £200m.

In theory, if the timetable hasn't slipped, tungsten concentrates are now being produced ("first production...from the beginning of Feb"), and the off-take agreement (which is for all of it initially) should be kicking in. I'm keeping an eye out to see if it's mentioned anywhere. Couldn't find anything yesterday. Maybe Noble will be keen to publicize it as a success story, having been in the doghouse recently for generally overvaluing their off-take agreements.

Noble seem to have survived and have restructured, and the tungsten concentrates off-take agreement with Noble is still showing as extant on ORM's website.

Update soon hopefully. Couple of snippets from 27/9/18 RNS:

Process plant commissioning expected to commence at the start of December with first production of tungsten concentrates from the beginning of February

The focus over the coming period will be on the completion of construction and commissioning of the plant, in tandem with work surrounding updates to the mining schedule and operational budgets for the initial year of mining ahead of the Project entering its production phase in the first quarter of 2019.

Perenco selling up in SNS too. Plenty more deals to be done..