Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
Was referring to the period between closing hearings and granting award.
"According to Rule 46 of the ICSID Arbitration Rules, the Tribunal must issue its final decision to the parties
within 120 days of the closure of the proceedings. However, the Tribunal is permitted to take a further 60 days
if it is otherwise unable to draw up the Award in such timeframe."
JMUK thank you for prompt answer.
One more question regarding GRX. You have written "The hearing has taken place and from that point it is typically another 1.5 years plus to get the verdict and any award that comes with that."
What is the source of the information? Why does it take so long?
UNCITRAL can take longer but for ICSID 180 days is max period by the rules...
JMUK has written: "LCM have lost a few cases this year though".
What cases have you meant or where the information about lost cases come from?
Genuine question.
LCM has not reported lost cases this year (maybe one). Their annual results are good enough to claim that there were no such cases.
I see financial incentives for LCM to take on more risky deals when financing 25% of the case not 100%, but still have not seen it in theirs RNS and in financial results, yet.
Proceeding of cases were delayed during Covid period. Should we expect increased number of cases in the coming quarters resolved, as Covid delays will be unpacked?
And the second question - there is pretty substantial case waiting for granting an award (AUD10,4M investment, AUD20-40M for LIT if succesful). The arbitration hearing were completed in November 2022. Did LIT indicated standard timeframe between final hearing and reward for UNICTRAL proceedings?
Https://www.supremecourt.uk/cases/uksc-2021-0078.html
"Are litigation funding agreements ("LFAs") pursuant to which the funder is entitled to recover a percentage of any damages recovered "damages-based agreements" ("DBAs") within the meaning of the legislation which regulates such agreements?"
MeHumbleThinks that the case is not applicable to LCM usual practice (compensation as a function of time, not % of reward), but proper RNS from the company clarifying the legal situation would be more than welcomed.
DBA definition by Thompson Reuters Practical Law:
"An agreement between a representative and a client, whereby the representative's agreed fee is contingent on the success of the case and is determined as a percentage of the compensation received by the client."
From today's OilPrice.com newsletter:
"BP to look at frontier exploration. After several years of pursuing more cautious tie-back projects offshore, BP (NYSE: BP) said that it was considering more ambitious frontier exploration. It’s a sign that the oil majors are willing to take on greater risk once again, after several years of stepping back."
GLA
G
scarf - "In my humble opinion, with no professional knowledge of gas exploration, it is currently a guessathon at where we will end up."
Don't agree. It is quite simple and one do not have to be involved in proffessional valuation of O&G assets to make reasonable predictions.
If there is one prospective buyer we will get around 10p offer. SOU management will be pushed to accept the offer:
1. by Morroccan administration that want their gas assets producing ASAP,
2. by running out of cash and maturing debt (remember to sutbract 2,5p from TE5 NPV for bonds),
3. 10p will be a good price ATM as SP will slide as time goes bye and no good news on the horizon.
If there are more than one buyers - they will pay at least NPV of TE-5/6/7 discovery and maybe some extra depending on quality of geology written in seismic data. With Repsol and Shell in the neighbourhood, Africa as a trendy place for FDI (just recently Russians declared theirs interest), Morrocco as the best place to be in Africa there is pretty good chance for such scenario.
So fingers crossed.
GLA,
G
LE price depends on number of bidders.
If there is only one - current SP can be too high.
If there are more than one - 25p is not the upper limit.
And number of bidders depends on quality of TE-5. I have no clue about this quality ATM after so many dusters in the row. Maybe good but maybe it is just JP's usual marketing stuff.
GLA
G
Good news (C1 to C5!), but I am a bit confused.
1. "the unstimulated test - has now been largely completed".
2. They perforated "158m between measured depths ("MD") of 1932 and 2090 metres MD in the TAGI".
3. But the company "has secured hydrocarbon gas to surface (C1 to C5 composition) from within the primary shallow zone, a section of which was perforated from 1932 to 1938 metres MD".
Is it technically possible to isolate 6 meters from the other sections?
Anyone? Anything?
Just guessing but...
Fixed part of the gas prise at 29 mmscf/d is $1,15 = 12,2 / (0,029 * 365 )
Plus Soundchew math looks $8,65-9,15 at brent price of $70-75
Brent $50 => $6,65
Brent$100 => $11,65
With TE-5 producing more - gas price is slightly lower (sensitivity $0,11 per 10% increase of volume).
A methodological remark - methinks that TCF value to Sound of TE-5 is not equal of TCF value of TE-10. When calculating TCF value for TE-5 one has to subtract costs of pipeline development. It is not necessary in calculation of the second discovery NPV.
On the other hand - I do believe that GSA for the discovered gas (TE5 and TE-10) will be much lower than $8 when TE-10 flows.
A tentative remark - do you think that credibility of JP will suffer if he accepts an offer below 100p without drilling TE11?
And last but not least. LE final offer will depend on number of bidders. If there is only one: anything above 100p seems to me unlikely. If there are more than two bidders - JP will show us the money:)
Methinks that GSA expectations that has been expressed on this bb are much exaggerated.
Some facts and my speculations behind GSA.
1. Morocco wants gas as cheap as possible (fact).
2. Morocco with 30% stake has substantial control over SOU and definitely more control that will have over potential buyer (fact).
3. 2. => it is easier for Morocco to negotiate lower gas price with SOU than with potential buyer (fact).
4. Potential buyer with 20% $/NAV sensitivity will not make a deal with unknown gas price (speculation).
5. It takes at least $100M to connect Tendrara to Algeria-Europe pipeline (fact).
6. If the discovery is relatively small (TE5 Horst only) the gas price have to be high enough to ensure profitability of bulding $100M pipeline (fact).
7. If the discovery is huge the gas price can be much lower to justify $100M expense (fact).
And then my logic goes like this.
I conclusion: 3. and 4. => GSA will be signed before LE.
II conclusion: 6. => if TE10 and TE11 turn out not to be commercial we will get $8 GSA.
III conclusion: 1. 3. 7. => if TE10 is a success gas price in GSA will be lower. I think much lower to give Moroccan people gas much cheaper than Algerian one. Closer to $6 than $8 maybe?
And yes – I know what JP has said about GSA – that it is not associated with new discoveries. But contrary to JP declaration GSA has not been signed yet. And JP do not have to be aware about everything what goes on behind Moroccan bureaucracy scenes.
GLA,
G
ddboy
Because of security reasons transport of explosives in countries like Morocco involves a lot of paper work nowadays. Military assistance during transport maybe needed... Obtaining all permissions takes time. It may be a reason why timelines are so extended - to be on a safe side.