Member Info for Greener101

Yep, this is a point I've made myself.

But a strong share price will help the negotiations... and if we hear nothing until March and a deal is done last minute, the journey may be painful.

An interim RNS update would be helpful (unless it's days away...)

big drop on lowest volume for weeks... The big players are holding, and with no news half way through the time frame given it becomes even more interesting perhaps - but where will buyers come from? Tempted to have a little trade today.

An RNS to tell everyone the process is still live perhaps AB?

In the short term the market is a voting mechanism, in the long term a weighing mechanism.

I think AB is certain because both sides have to do a deal; JOG must F/O, other N/S operators need to make the best of the investment allowance, and replenish diminishing reserves.

Personally I think the downside AB's positive statements are purely reputational, nothing more. AIM isn't the FTSE 100. But he would have to RNS is the process failed and parties pulled out. Hence it's ongoing.

The delay will worst case (IMHO) be a deal the management hoped would be better, best case have some complexity due to optionality and competitive tension. Remember there are infinite moving parts in a deal, such as financial structure, involvement of infrastructure partners and/ or multiple operators, drilling contracts, pipeline deals with surrounding area, electrification, tax related issues, etc.

They are just over half way through the guided timeframe.

AB guided so positively because they know a deal will be done.

The delay will be to squeeze every drop of value for shareholders. Maybe it will be stellar, maybe not - but there will surely be a deal.

I see lots of reasons for endless haggling. And delays. The company is well capitalised, and vast amounts of shares and options are held by management. Meanwhile no-one has sold any - not even RL, who might even be sore at getting edged out. I can't see a deal that kills existing shareholders is likely.

I'm holding to the bitter end, DYOR.

I firmly believe in the good faith of management. Not because I think I'm a good judge of character, but because not only did RL, VG and AB take up the cause - then Les Thomas was next, and then 2 more of his trusted lieutenants. They can't all be dishonest.

The asset is quality, scarce and in the right place.

Our worry should be the shape of the deal - can they monetise their situation, we'll see soon enough.

https://twitter.com/EnergyVoiceNews/status/1626295424238723072?t=Kjl0YFknCzQxBHoagYPilw&s=19

So much in the news about rigs and FSPOs underutilized in NS. Not sure on global rates, but it has to be positive for optionality and cost reduction in a deal.

If the deal is complex, and includes multiple counterparties (such as infrastructure as well as oilcos) the potential for delays is immense. The army of advisers work all hours God sends, but anyone who has observed a deal of this size knows it can take a vast amount of time. There may indeed be diary dates blocking (although they must have come after famous 'certainly' RNS which mentioned the chance of a deal before year end.)

I take comfort in the following thought: AB would have to signal via RNS is the deal had failed. We've not had that news. Many specific points have been added to the F/O progress updates by AB. Multiple counterparties, due diligence, commercial discussions ongoing - points of fact on a 'formal process'. My take is that conditions for a temporary stalemate exist - I can see JOG's management being tortured for as long as possible on terms, after all the alternative options on 'no deal' are much more painful for JOG! Counterparties can credibly threaten just to take the WFT hit and deploy what's left in a friendly jurisdiction. Threaten....

But, if the multiple counterparties who are part of this formal process have said 'no', and there are none left, an RNS would have been triggered (echoing PC01's post).

Which means there must still be people committed to the process. If they were going to be out, I think they would have said so long ago. No reason not to.

We MUST still be in a process, delayed either by complexity (Carcosa61) or extended haggling.

The question is 'what type of deal'. Apologies for the obviousness of this post. It is cathartic to write it out loud.

GLA

I'd really prefer if your source wasn't right DU, but seems possible. Although how much worse could it get? and with a Lab government maybe coming soonish the writing is on the wall anyway.

Steve Brown the Orcadian CEO wrote that article in the Times saying the industry should have taken advantage of the investment allowance rather than fight the EPL.

My view is that as human beings, it's hard to take one up the proverbial with the WFT, and then shortly after, compliantly do what Gov has 'incentivised' by force. I can quite see everything that has happened in 2022 making potential F/O partners sick to the stomach at the thought of making a big investment in NS and rewarding the Gov.

But the investment allowance is what it is, and it may not be here forever. Super deduction too. So I think after months of howls of protest by the industry the deal will be done. Hoping sooner rather than later......

I could read the lack of F/O announcement yet as a lack of interest in the F/O. But we know nothing more than we did when we got AB's bullish 'certainly' RNS in December. Whether it's a Mexican standoff on the deal to get best terms, or finalising the preferred concept caused by the constant changes in NS policy, both are legitimate reasons for delay, and both can be solved. I don't know the outcome but the current wait doesn't invalidate all the positives of the investment thesis, it just makes a painful to wait and wait. So I hold.

I tend to agree with Robsroom, although I'd say the SP must rise on any deal?!?!

Does anyone have any idea on what dynamics would be like on the various options? I have understood from previous posts that FSPO tends towards earlier first oil, less upfront investment but lower margins on extraction. It also cools prospects on making GBA a hub from which the various other fields (Verbier etc) are discovered.

Is a tie-back somewhere in between full jack-up platform and FSPO? moderate upfront investment and moderate margins?

Any better informed types out there?

BM - NDAs would of course have been signed. DU is right, one of the investors will have leaked the fund raise to secure a better entry price for their money. As I remember it was leaked to a subscription only bulletin board type site, which publishes all sorts of rumours (especially at this level). I forget the name.

An issue of interest to me is at AIM level - and micro cap, how secret is market sensitive news? If they're close to signing, why doesn't SP price action tick up? Having followed a few other stocks at this level, it's perfectly possible for an RNS to shock the market. Many names would be involved in thrashing out a JV operational plan in their silos, but only a few will be in the boardroom signing commercial terms. So even if there is a little insider buying, it may well be hidden by institutions keen to take their winnings off the table (for whatever often unconnected reason). The current SP action doesn't influence my view, IMHO.

Glad we've got off the Malthusian discussions...

I agree with your main point Cyril. If there is no competitive tension, the F/O partner(s) and JOG will be in negotiations stalemate (for the time being). JOG can hold out with cash for ages. The F/O partner will be desperate to get the best terms given the slimmer margins of a mid-life asset (I don't know this but an assumption - am I right oily types?) in the WFT environment.

I you were the F/O partner, wouldn't you squeeze JOG as long as you could bear? If you felt you still had time to grab your investment allowance? As the SP drops the pressure increases...

If you were JOG, if you knew the deal could be done if you caved, and knew the F/O partner was desperate for the asset on an investment allowance basis, wouldn't you sit on your cash pile praying for a few extra points?

A deal will come, but the SP remains above 200p, with more than 2 months to run on AB's Q1 deadline. The only things that have changed since the license RNS have been positive newsflow hinting at an ever stronger position for JOG (helpfully posted on this board). Brent grinds upwards. The increased super allowance for electrification plays beautifully into JOGs hands, but maybe adds complexity and changes the plan.

There will be a deal!

I agree JS. Big players are still in. They are haggling terms. A deal will be done.

Batterymetals - Agree JV is the outcome. I think your fear re AB is misplaced, for two reasons:

1) AB will be acutely aware that if this falls over, his opportunity to generate substantial personal wealth after years of commitment is missed. I can imagine this issue coming up, but not him losing a deal over it.

2) He would be totally outnumbered on the board, and ousted post-deal (pre-deal would be bad PR, and why lose the advantageous tax status of his options). If ex-Ithaca want him gone, he's gone. he doesn't own enough shares (less than RL). If he is dying in a ditch on that issue, he would quietly zombie on as CEO and quit shortly after the deal.

Remember due to options structure, and after only a year (ish) of work, ex-Ithaca are all incentivised to flip the thing rather than hold out forever. If they can't do a decent JV then it's a sale and on to the next thing. SP is holding up, in my view for good reason. Crappy deal or great deal - who knows. I hope DU is correct. But there will be a deal, and even a crap one you double or triple your money.

Just MHO. GLA

The guy is 72. First oil when he's 76? Ithaca guys are better suited to delivering a major, highly intensive development. Does he even want to get in a chopper and visit a rig at his age?

RL spotted the opportunity, got it this far and retains a huge shareholding. He's alright.

All is for the best in the best of all possible worlds.

My take is that this is a question of terms. I don't believe one counterparty is rushing to pay JOG to spend a billion quid. It's likely a consortium, who will be in cahoots on getting best terms. Listen to Orcadian CEO talking about farmouts - it happens when it happens. Perhaps they were on the vinegar strokes and the extra WFT blew the financing up and the deal needs to be restructured (investment committees, more legal etc etc). Maybe JOG want a full platform and others want a FPSO or tieback. Maybe Harbour is pushing a juicey S&P agreement across the desk and JOG think they can force a better outcome. JOG has plenty cash in the bank. Counterparties have until end Q1 to account for EPL. No reason for either party to pull the trigger immediately is they are inching closer to a deal, or in the proverbial tunnel. We'll get there! whether £43 a share or £6 is the point IMHO.

Don't want to predict the future (lols) but aren't most people in the industry predicting elevated oil prices for years to come? seems odd that with all the Russian oil still on the market (it is), recession fears in the entire G7 and China closed for business Brent is still $80 a barrel! what's it like with modest growth and China open! WFT seems less important if you are a long term oil bull. And with EPL it's like a (forced) free option on oil prices.

I also am going spare with waiting but I'm convinced (and oily friends have agreed) that a deal will be done. I think JOG will be holding our for best terms.

Bought a bunch of Orcadian also last week. If JOG goes they'll be next. More punty but just saying.

Dick - fair do's,' one iota' is hyperbole, but although I'm not completely familiar with Longreach Story, didn't he get ousted by more experienced players? I don't think he has much operational experience of running offshore assets. Certainly his experience pales in comparison to GF, Les Thomas etc.

Anyway this is a red herring on the story really - I only bring it up to give credence to the outcome of a long term success story - I feel the Ithaca people are now most of my reason for being invested.