Member Info for Greener101

PS sorry to hear about general disillusionment troubledseller. Run a small business myself. Pretty much twas ever thus - and there will be opportunities. GL for lunchtime tomorrow!

I'm a big believer in motives - and although outside investment will fall, management teams have loads to play for in putting pre-tax money to work. Companies' management teams almost never stop doing what they do and return money to share holders for poor investment returns. They want a paycheck! Many motives to put money to work in JOG

Mul was a typo... But yes I hope we get the beers in if I'm right...

It came to me in a vision actually. It was a Bridge too far and Benitz was General Horrocks pointing out the plan. We have a tie back here, here and here. Perhaps an Aftershock for me if I'm right? ;-)

Here I go.

1. The previous farm-out failed as windfall tax loomed and too much equity needed for a deal. Also electrification studies needed, and perception management team not sufficient. 1bn USD is also a big project to swallow for anyone, especially with little gas and potentially lower flow rates.

2. As reaction to WFT and investment allowance, multiple counterparties have engaged with eco-friendly electric solution.

The existing set-up at JOG is now more than capable of executing the project as lead team. It will just hire people in and source contractors. The important bit, who's at the helm, are Ithaca guys.

Once Hunt confirms bit more WFT and minimal tinkering with investment allowance, mulitiple counterparties will use JOG to process pre-tax trapped UK profits. This will not expose any one oilco to a mega investment with high tax diminishing potential investment returns. Several players chucking in $200-400mm and paying rest of their profits out in taxed divides.

To most boards this is a decent hedge to a high tax environment, much more attractive than a whale-sized project.

Farm-in announced Friday or first thing Monday next week.

Good luck all

Mul

If the investment allowance is intact we'll be fine whatever comes. Break a leg all.

I mean Harbour do have to kick and scream about WFT don't they. They do get paid for expertise in getting the black stuff out the ground rather than the prevailing high price; the black stuff is at least in part owned by UK PLC. Anyway, the acid test is ongoing activity isn't it, which seems to be happening. I feel the investment allowance is a smart move. I don't mean to troll; I know you likely have a more hawkish view.

Regarding management, to paraphrase Frank Zappa, JOG is making something from nothing and then selling it, which is why it's a potential mega-multibagger. Mom and pop acquisition of licenses and then rustle up **ahem** a billion Sterling. I don't think management would be the reason for failure, if we don't get there this year.

Still long also, biggest (notional - har har) position I have by a mile.

In totally unrelated news the Ithaca IPO happens next week and seems to be going well...

https://www.globalcapital.com/article/2au1lrdubu6qt9tu2aha8/equity/equity-ipos/ithaca-energy-covered-on-day-one-aims-for-300m

Dick - can you doubt the management team in this situation? We have the top team in NS, highly Incentivised to farm out - ex-ithaca are no zombies looking for a paycheck.

If it doesn't happen it's either WFT or technical DD surely.

On DD, if JT southern was right and it's no good as a field, there would not have been such engagement in the FO process; if it was obvious to him it would be obvious to anyone. Management team cannot say what they said in the interims without such engagement without legal I'd think, so for me the technicals must have a good chance of being good enough.

On WFT, as said before and in the RNS this helps JOG. Uneconomical fields become economical.

Finally, I had an idle thought I'd like to share. With the WFT, why bother developing the NS if UK gov takes all the cash? Well, salary and bonus are paid from pre-tax profit so, all management teams and boards are more Incentivised than ever! There's going to be an ocean of pre-tax profit for the villa in Cap d'Antibes etc. As far as all the people running O&G in NS it must be amazing. And the Capex comes from profits in the UK regime, so although much external money may have been turned off by WFT, that's not a factor here.

With us, who cares about WFT profit reduction because our barrels are valued like they'll still be there in 3023.

It'll be unknown unknowns that get us if they do, everyone's interests are aligned.

Fingers bloody crossed

65% to 78% is little difference when you have giant profits stuck in UK tax regime and 8p buys you 100p Capex or whatever the deal is. If it doesn't happen it'll be an 'unknown unknown' in Rumsfeld speak.

Red or Black pays 4 to 1. No mount of Kremlinology can help now. May I suggest The Duke of York in Fitzrovia if it hits?

Sorry to say the obvious but a well-funded counterparty like Ithaca would likely be able to introduce more and cheaper debt into the 'liquidity event' I would assume. Could make this already super-levered play even more levered. Nice.

Interesting that the spread was enormous today. You could only sell cheap at 278 but you could not buy cheaper than 291. I was thinking about topping up but insta paper loss was too great

What a world that would be! A broken up Russian federation all trying to get capitalist as quick as possible, having learnt from their former comrades in Baltics, Poland and Ukraine what joining the free world means.

China (+N Korea, Venezuela etc) the only scary bad actor left. We could sleep a little easier in our beds!

PS I agree with PC01, the overall oil price will be higher (although perhaps more volatile as marginal difference is tighter). As a very well informed chum in the oil business said the other day, 'the last barrel of oil extracted will be over $1000'.

There must be so many insiders now though, multiple counterparties and advisors etc. Who knows.

Forget Briggs, who I really want to hear from is JT Southern. Old school!

If there's a farmout at all the shares have to jump at least twice?!?! who would sell at sub 350 after the news? PI's like myself will rush to exit within 24hrs if the price is good, but the institutions may well want to stick around to first oil.

I'm afraid I was talking about my money. An old colleague of mine, on climbing into a cab after a good initial sales meeting, would quip 'so, shall we start spending the money?'. Jinx double jinx etc

Good to hear proof of life from Dickupham. Hope you get back on your feet soon. Jesus loves a sinner of course.

The day of reckoning is close. Intense planning around how to spend the money is well underway.

Possibly but they'd need income to offset 90% via windfall tax and also opex/ infrastructure costs to gain synergies with existing assets? Those items are the main deal sweeteners.

A bid is risky as you end up incurring a big cost upfront, plus the £billion. And also triggering a counter-offer.

One can't completely discount JOG getting a farm-out offer from another oilco, contingent on getting some cash from banks and a placing from existing investors. That sounds scary for us but I think it would be fine (amazing) as long as it wasn't too much.

But... a straight bid would be a neat end to the story of course! I advise £10 personally :-)

They're delayed so price doesn't indicate buy or sell? I thought this type of stuff was HL and mm related.

You could be right JohnBriggs. But equally completely wrong - and I don't agree with the insinuations you make. It's not a re-hash, and it makes perfect sense why they're not yet able to announce.

Farming-in is not like an M&A deal, it's a more like coaxing a marriage proposal. Cambo and Rosebank have equally been off and on for years. Only now have they gone ahead.

Of note - they've given us a deadline for completion of technical studies for next month, and know full well that the market will expect a deal then or shortly after. The details on the commercial negotiations etc is about a strong indication of being on the vinegar strokes as you're going to get. If they want to string along for salaries, they've done it for a couple of months at best.

A decent punt that became a fantastic punt due to changed environment. The odds/ payout are still amazing and progress well communicated. If you want a sure thing buy Chevron etc

How can they farm-out until tech studies are complete? Patience is a virtue - every single thing is in place to get not just a deal but a good deal. Other deals are getting done quicker because they are simpler, and longer in the making. We know the GBA economics are best with much involvement (and complexity) of other parties. Cambo is a giant investment in a big field in the middle of no-where. So much criticism of management on this board and the other one, I mean I want to get rich quick as much as the next man but this team is literally turning nothing into something - they're doing their best to multibag for us what more do you want? Power to your elbow Benitz et al.