Member Info for JEBR

Space, Ovets, and a few others have all made some good points. Personally, I'm not happy with the size of the proposed dilution either, which makes me inclined to vote against it if the insurance payout is confirmed.

On the other hand, I’m not sure I want to risk even slightly reducing the chances of achieving FID as soon as possible. I've been invested in this for so long now that I'm very reluctant to support anything that might not benefit FID or RKH.

That said, assuming the insurance payout is announced soon, what will RKH do with the surplus cash if they end up with ‘too much’? Could it increase the chances of Isobel being developed sooner rather than later? Could it help bring forward the timing of Phase 2? Or might it simply serve as extra protection against a black swan event?

Ultimately, could an additional 5% dilution be worth it in the long run if it strengthens RKH’s potential and financial position?

It should be (140 / 900 / 1.33 = 0.1169). In the price per share this was already included correctly

Formatting here is horrible .... This should be more readable

I’ve now had some time to redo the calculations properly (and not just rely on an erroneous ChatGPT output… won’t make that mistake again). I’ve used all the numbers from the NSAI report, which calculated the NPV10 as of 31 December 2024.

Citizen correctly noted that calculations for future scenarios don’t include costs already incurred, debt, or capital already invested. The NPV10 per year is calculated as NPV10𝑡 = net cash flow / (1 + discount)^𝑡.

I can’t exactly replicate the NSAI report’s figures, but using the half-year point (t = 0.5) gets us pretty close. To include previous costs and debt, the discount can be set to zero for those years. Finally, we should add the cash raised from new shares to get a good estimate of RKH’s market cap excluding Isobel and other potential upside.

The NSAI report provides figures through the end of 2039, as well as a “remaining value” for subsequent years. I extrapolated the undiscounted future net cash flow by taking the last reported value (470.7M) and applying a decline factor of 0.86347^t for each following year, to capture the remaining 36 years.

Below are the first few rows showing how the discount works. If you compare this to the NSAI report, the values are close but not identical. Figures are in M$ (thousands of USD).

Period Ending | Discount Factor | Undiscounted Cash Flow after Taxes (M$) | Cumulative Undiscounted Cash Flow after Taxes (M$) | Discounted Cash Flow (M$) | Cumulative Discounted Cash Flow (M$)

2024-12-31 | 0.95346259 | -69679.60 | -69679.6 | -66436.8918 | -66436.9

2025-12-31 | 0.86678417 | -164678.60 | -234358.2 | -142740.8040 | -209177.7

2026-12-31 | 0.78798561 | -274685.50 | -509043.7 | -216448.2215 | -425625.9

2027-12-31 | 0.71635056 | 109854.50 | -399189.2 | 78694.3321 | -346931.6

2028-12-31 | 0.65122778 | 19130.30 | -380058.9 | 12458.1828 | -334473.4

2029-12-31 | 0.59202525 | -8367.40 | -388426.3 | -4953.7121 | -339427.1

2030-12-31 | 0.53820477 | 336025.30 | -52401.0 | 180850.4210 | -158576.7

Assuming 900 million shares, the NPV10 changes for each year as shown below. I’ve assumed an exchange rate of $1.33/£ and added 11.5p to the share price for the $140 million RKH will receiv from the equity raise: (140 / 900 / 1.33 = 1.15).

Period | NPV (M$) | share_price

2024-12-31 | 1827087 | £1.64

2025-12-31 | 2013196 | £1.80

2026-12-31 | 2229522 | £1.98

2027-12-31 | 2489317 | £2.20

2028-12-31 | 2783791 | £2.44

2029-12-31 | 3101155 | £2.71

2030-12-31 | 3449685 | £3.00

2031-12-31 | 3817095 | £3.31

2032-12-31 | 4182564 | £3.61

2033-12-31 | 4539221 | £3.91

Based on this, the current share price implies roughly a 50% risk discount. If first oil starts in early 2028, that risk should be largely gone, suggesting a share price around £2.20. Full production is estimated around 2033.

Thank you citizen. According to the report, the costs up to that point should be around $500M. We already put in $140M, so that leaves a cumulative starting point of -$360M at the beginning of 2028. This way the NPV10 still is $3.64B (£2.74B) or £3 per share. I don't get your second point of the 10% return though.

Later this week, I'll post a detailed calculation so everyone can check the maths.

A lot of people made calculations trying to estimate the worth of the share price in the near future. One thing that's confusing (for me too) is the NPV10. If I understand it correctly, the value for each year is discounted by dividing by (1+ 0.1)^year. On page 22 of the NSAI report they show the discounted and undiscounted values for each year (report of the 2nd of June on https://rockhopperexploration.co.uk/investors/presentations/). Because before 2028 there is no production and it will take a few years before they have all phases finished, the best years are heavily discounted. If I calculate the NPV10 based on those numbers from the start of 2028, I get an NPV10 of roughly $4 billion (about £3 billion). With 900 million shares, that's £3.33. And it should increase after that because production should be tripple 3-4 years later. Did I calculate this correctly? Did I miss something? Because this seems way better that I expected

Never mind. This concerns the costs until first oil and not the NPV. The $1.658B is also new to me.

The confusion is due to £ and $. $1.8 is roughly £1.4

People seem to mix up NAV with NPV. Net Asset Value (NAV) is the value of a company’s assets minus its liabilities. This is can be split into core NAV (cash and legacy items), risked NAV (project value discounted for sanction and execution risk) and unrisked NAV (full project value assuming success). The NPV10 is the present value of a single project’s after-tax cash-flows discounted at 10 % per year; it only changes when the resource base, the oil price or project costs change. Because FID removes most development risk, the discount applied to the risked NAV shrinks and the risked NAV moves closer to the unrisked NAV, which in turn is practically the company’s share of the project NPV.

Rockhopper’s 35 % NPV10 in Sea Lion isvUS $1.8 billion at US $70/bbl Brent. Using 906,050,136 fully-diluted shares (645,213,765 (current shares) + 162,813,189 (firm placing) + 40,703,294 (firm warrants) + 35,394,165 (conditional placing) + 8,848,539 (conditional warrants) + 13,077,184 (open offer)), that equals US $1.99 or £1.51 per share. With capex + opex of US $25/bbl, 9 % royalties and 26 % tax, the Sealion NPV10 and the share prices are roughly the following:

$75bbp, NPV $2.01B, share price $2.22 or £1.69

$80bbp, NPV $2.22B, share price $2.45 or £1.87

$85bbp, NPV $2.43B, share price $2.69 or £2.04

If Isobel proves comparable in scale and economics, the combined unrisked NPV would roughly double, taking the unrisked NAV toward £3.02 per share at US $70/bbl and £3.38–£3.74-£4.04 per share at US $75–80-85/bbl. Isobel would, however, still carry a higher risking factor until it reaches the same maturity as Sea Lion, so rationally speaking, market is likely to value it at a deeper discount in the near term. Then again, when is the market rational?

From the RNS of yesterday: "The Board believes it could be possible to sanction the second phase of the Sea Lion Project relatively quickly after First Oil on Phase 1 depending on field performance, oil prices at the time, and various other project assumptions being positively met. Based on data contained in the senior debt lending case, it is currently envisaged that the second phase, and all subsequent phases, will be self-financing using excess cashflows once Phase 1 is on production."

@Nastynick: how do you come up with the £4-6? The report said that RKH's Sealion share was valued at £1.4 billion, which is around £1.56. Even if Isobel is of a similar size and it would double, we would be around £3

Nastynick, I agree with you. It makes sense to appraise Isobel as quickly as possible without delaying first oil of Sealion. My guess (and it's truly a guess) is that they will do it near the end of 2027. What's your oracle guestimate?

Portoly, small adjustment. It's good to note that you used $70 per barrel. If the price would change, that would of course change the numbers. Also, the plan is to scale up to 150k barrels a day. This brings those 45 years down to about 15-20 years. Finally, the MCap is not the same as the value of all the oil being produced in the next 10-20 years.

Your calculations do show the enormous size of just Sealion

If RKH will do an equity raise and warrants are attached to it, then the equity will be used for Sealion, but on what will the money from the warrants be used? A few pokes in Isobel seem the most likely to me.

Space, unfortunately I made a mistake and you're correct. I read somewhere that new ICSID rules required cases to finish within 20–26 months, which I remembered and held on to because that is way better! But after double-checking the 2022 regulations, I can’t find any source for that overall timeline anymore.

The only fixed deadline is, like you said, that the tribunal must issue its final award within 240 days after the last written submission. There are also deadlines for certain steps (like arbitrator challenges or bifurcation requests), but I can't find a hard cap on the total duration of a case. This means ROI can still try to drag this on for many years, even under the new rules. Hopefully it can still be sped up quite a bit based on everything that has been done before.

Sorry for having given false hope and thanks for checking yourself too!

It should be 20-26 months of course

LTT, I posted that, and you’re right. Under the new ICSID regulations, cases registered after July 2022 are subject to stricter timelines: awards must be rendered within 20 months, with a possible 6-month extension (so 18-26 months total), and key procedural steps are also now time-bound.

But I honestly think ROI will still try to drag this out as much as possible, even with these new deadlines. They want to show others how tough and drawn-out the process is to discourage similar claims. Plus, the longer they delay, the more they can hope for another arbitration mistake or for new regulations, especially around climate and fossil fuel claims, to work in their favor. Stalling benefits them by buying time, increasing legal costs for the other side, and maybe even changing the playing field altogether. I won't be surprised if they will again file for an annulment too.

Space, what do you mean with the $40 million usable cash? Did SM mention something like that? Below is my quick calculation, which is slightly different from yours.

Insurance payment is €31 million, SM said they probably need to pay 10-15% taxes on that and euro to USD exchange rate is around 1.17. That leaves RKH in a conservative calculation af €31 x 0.85 x 1.17 = $30.8.

RKH has around £21 million in cash and the GBP to USD exchange rate is 1.36, which equates to 21 X 1.36 = $28.8.

This means that at the very least $97 - 30.8 - 28.8 = $37.4 million is needed, or £27,5 million.

This assumes all cash is being used, which is not realistic. Assuming to reserve 3 million per year for the next 4 years (until 2029) and an additional £5 million in reserve would come to £44.5 million.

I believe the 55p to be too conservative and 60p seems more likely, especially if the equity raise can be contingent on FID. In this scenario there are 75 million new.

On top of that there will probably be new warrants. If it's 2:1 for each new share, that adds another 37.5 million shares. It will probably be with a big premium like 90p, which will add £33.75 million ... Perfect money for a few pokes in Isobel.

Croft, even though I would love to see those numbers, I believe you rely too much on your chatgpt output and probably have prompted it (unintentionally) incorrectly. If I'm not mistaken, the $1.8 billion nett is for all phases of sealion. Assuming about 25% dilution, Sealion alone will result in about £2 per share. Isobel might double that. And I might be a bit conservative, assuming similar oil prices.

According to a recent paper from Lynas et al, more than 99.9% of peer-reviewed scientific papers agree that climate change is mainly caused by humans, according to a new survey of 88,125 climate-related studies. https://news.cornell.edu/stories/2021/10/more-999-studies-agree-humans-caused-climate-change

Disagreeing is everyone’s right, but the burden of proof now lies with anyone claiming the entire climate-science community, and every major academy of science on the planet, has somehow got the basic physics wrong.

And because you love tomatoes ... Greenhouse tomatoes love 25–28 °C. In open fields, yields drop once daytime highs exceed ~32 °C and nights stay warm.

The science is vital, but so is keeping the lights on. Even with aggressive clean-energy roll-outs, aviation, shipping and heavy industry will still need oil for at least the next decade or two. If we must import, I’d much rather buy from a stable British-linked basin like the Falklands than rely on Russia, Saudi Arabia or Iran. Especially if I also hold some juicy Falkland oil related shares