Member Info for Kooba

A basis of sensible discussion is not dismissing all factual evidence and legal documentation and saying it is lies for some apparent large scale fraud and that instead the unsupportable rubbish some put out is in anyway believable even through they are proven to be serially wrong in just about every over optimistic fairy tale they tell !

Suggesting they made things look as bad as possible at the time they put the company up for sale ..lets just understand the motivation behind that shall we??
If anyone has an industry idea on the costs and timescales mentioned in switching over an in place ESP or one replacing one please confirm if the company is lying in its official correspondence .
I’m pretty sure the company would not put down unsupportable estimates..that can be verified by many in the industry.

Expectation*

‘I will contact Hur Ca Kerogen today, worth to explore this way in my opinion.”

While it is indeed another possible plan that might work for some here I’m rather unclear what you think the company CRS and kerogen can do to force a change in the terms they have irrevocably agreed to and can in no way hamper the process? I also would imagine there would be significant issues around the tax position.
It would be against PRAX interests as far as i can tell and make what is bloody complicated already even more so. So whilst it would appear a waste of time ..everything is worth a try as long as execution in managed correctly.

ASI i am truly shocked in some cases this could swing votes one way or the other against the true underlying shareholders wishes. You would think they could just vote the net amount. Does this also mean if there was a 10m holding in noms and 1 shareholder with 1000 shares actually bothered to vote voted yes then there woud be a 10m vote cast ? Jeez this could certainly be used to give a pretty false view of support!

So the other answer is that they think there is a good chance (75%) of the failed ESP restarting..so why change it..also changing it would have cost a fair bit and left a lot of downtime..just to replace a back up that might work.

This is a direct communication i received from the company Maris cc’d from Nov 2022
I am told it does not align with someone’s memory however this is hard copy direct from company …folks can make their mind up. I not sure this overlaps with doc’s it is what i have always understood…but there could be cost changes i guess.
Many thanks for your email.

As was explained at the AGM, while each well has two downhole Electric Submersible Pumps (ESPs), only one is running, with the second available as a “back up”. Depending on the cause of any “issue” with the ESP, the Company is faced with a choice of
Switching between ESPs through a ROV visit to the wellhead
Engaging a rig to visit to wellsite and perform a workover to replace/repair the ESP
Doing nothing
The cost and time of performing each task varies, dependant on many factors although guidance was given if all equipment and services were freely available, and the weather favourable, the ROV approach would take of the order of 6-8 weeks and cost, in round numbers, in the region of US$500,000. A workover would, again in round numbers, cost in the region of US$30-40 million and take 6 months.

The decision to perform any of the tasks would be an economic decision and be highly dependent on the circumstances at the time, including equipment and services availability, weather conditions (both actual and predicted), time of year (weather impact), the current and predicted production rate, the current and predicted oil price, etc.

The specific question asked at the AGM was, given the issue with the pump previously encountered, what was the chance of success of it restarting if swapped? The answer was that there was a 75% chance of it restarting but its performance levels would be uncertain.

I hope this provides clarity on this point but do not hesitate to contact us again if you have further questions.

Kind regards

They then aggregate the numbers fore or against and pass on the vote for the highest figure rather than as individual votes. So if they receive 1 million yes votes and 999,999 no votes they will send 1 million yes votes and disregard the no votes.

Is that true i didn’t realise..it is one shareholder with many sub accounts but didn’t realise that a majority is how they base a single vote fo the lot. It means your shares can be used to vote directly against your wishes!!

ASI ..in documents
Upon the Scheme becoming effective, it shall be binding on all Scheme Shareholders, irrespective of whether or not they attended or voted at the Court Meeting or the General Meeting (and if they attended and voted, whether or not they voted in favour). Entitlements to Hurricane Shares held within the CREST system will be cancelled and such entitlements rematerialized and share certificates in respect of Hurricane Shares will cease to be valid. In accordance with the applicable provisions of the Code, the Cash Consideration payable under the Acquisition for the transfer of the Hurricane Shares to Prax will be despatched no later than 14 days after the Effective Date. Upon the Scheme becoming effective, the DCUs will be issued to Hurricane shareholders (other than Restricted Overseas Shareholders) within 14 days of the Effective Date.

British..”Having gone through the Q&A list, i still will vote no. First, it does not harm me. My returns in both scenarios are guaranteed. “

That’s perfectly fine and your choice , however
If the deal is voted down ( unlikely looking at numbers) and there is an unplanned cessation in production over the summer / autumn 2023 certainly not impossible and the main concern for all bidders it seems.. We give notice to BW bye bye escrow.
You would have 3.32p back as a divi ..company would have 3.5p in the bank and that would be held back to cover costs until the decommissioning done ..could be spring 24 , rig and weather dependent and the company wound down summer 24 by then that cash would dwindle and might have less than 2p to pay out..there could be increased cost in decommissioning though it looks fully provisioned. In this scenario shareholders would be a lot worse off.
In a scheme scenario the DCU’s could still have value even though well6 failing would be bad news , if other assets were in there by then could still gain valuable royalties as well as having already pocketed 6.02 end of May.

On the other hand if production stops going down indeed starts rising and water cut starts to fall and oil goes up to $140 overnight then you could do better on the standalone basis ..some of these things might be a bit of a long shot though and likely totally impossible but there would probably be a better return from standalone ..but hey ho.

Your returns are not guaranteed in either scenario..no

I didn’t at first realise it was just net of marketing costs not all costs ..makes a monumental difference..they didn’t put that across at all well initially!

Bing bong Avon is calling. On another note off to a meeting chin chin

Oh im sure they have and that is probably a contributing factor in the complexity of the deal with royalty units DCUs rather than retaining some equity ..but it it also means we can retain that 17.5% even if the company issues more equity for acquisition so we don't get diluted.

Good posts on tax position and there you go moving away from any area for expertise for me …but my understanding it will be effectively the same vehicle and 100% ownership by prax was a thing..i’m sure prax know how to deal with it ..but as far as i am aware there are no pre agreements on transfer or use of tax credits with HMRC so im sure will have a plan !!

What are you allowing for costs?
Working out 2m barrels for rest of the year
2m barrels x $80 $160m
BW share $12.8m
(Fixed costs on Q&A $110-120M per annum)
9 months costs therefore $90m
Doesn’t leave so much
Then into £ for p per share calculations
Could be another 2p by year end on top of the $130m cash end march.
Maybe gets to 7.5p year end with an empty tank.
Back of *** pack but the cost are real!

For cats on production this year..nb the best months have already gone !!
So even at the top end of guidance you could see production down to near 6000 by the end of the year.
2023 Production Guidance

Management's production guidance for the full calendar year 2023 is 5,900 - 7,100 bopd. This assumes FPSO production planned uptime of 96.5% and production from the P6 well alone on artificial lift via ESP. Guidance also includes the impact of an annual maintenance shutdown, anticipated to occur during Q3 2023.

Oh i thought you have the figure Hurricane quoted but i reckon that was 14p..either way agree the potential difficulty in getting full value.
Hurricane PLC i think will continue..i guess thats the whole point in some of the convolutions of the deal. Prax will own 100% of the company so therefore can access the tax credits when they make acquisitions ..i think that’s a thing ! Explain why we have royalty units rather than rump equity i guess?

In a stifel note long before the FSP Stifel put the value of the tax credits after the company had said 17.7p at about 4p and this was some time ago and now some of the value will have been used up . It’s difficult to know whether the figure from the company was ever realistic in terms of external value..but i doubt it ! Unlike them they normal try to make things look bad not good !

But the vote will still have been taken place and will legally count ..a new offer wouldn’t cancel a vote that has been taken. It is an odd bit of wording in the Q&As because i don't see how a change of board recommendation in light of a new offer changes the irrevocables which likely shoehorn it through anyway. Might be missing something but the irrevocables look very hard binding.

Asi do you reckon Sefton is a lawyer/investment banker as self declared ..the terminology is somewhat unusual as is the legal knowledge ..just an observation.

Why should they CRS and Kerogen as independent shareholders not get a say in their investment and vote their shares..what a weird idea. They have to act in the interests of their own investors..not in the interests of those that are not!
As for Buckingham as colourful a character as he is im not sure punting the balance sheet on acquisitions or him getting permission to drill Lancaster ( NSTA negative ) with him in charge was necessarily the best way forward ..equally Buckingham may have done some DD and said not for him. We may never know!

Either way CRS and Kerogen are not deemed a concert party in the eyes of the takeover panel which is the authority that matters otherwise it would be disclosed.