George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
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http://www.tribune242.com/news/2021/nov/08/end-double-speak-over-oil-exploration/?news
Environmental activists yesterday urged the Prime Minister to eliminate “the double speak” and clarify whether or not his government will approve any form of oil exploration in Bahamian waters.
Responding to Philip Davis’ remarks upon his return from the global climate change summit in Glasgow, they also questioned how The Bahamas would benefit from carbon credits if it barred exploration outfits from extracting any commercial oil reserves discovered beneath this nation’s seabed.
Sam Duncombe, reEarth’s president, told Tribune Business that The Bahamas would likely have to pay compensation worth hundreds of millions of dollars to Challenger Energy Group (the former Bahamas Petroleum Company) or any other oil explorer that it blocked from realising the financial fruits of their discovery. This, in turn, would offset or negate any perceived carbon credit benefits.
And she argued that The Bahamas could not have it both ways when it came to oil exploration, given that the Prime Minister’s Friday message seemed to say: “We’re not drilling for oil but we are - kind of.”
Mr Davis, in somewhat ambiguous language upon his return from the COP26 conference, seemed to suggest that while his newly-elected administration is opposed to the extraction and commercial exploitation of any commercial oil discoveries within Bahamian water, it was not necessarily against exploratory drilling.
Should the latter activities result in any discoveries, the Prime Minister hinted that The Bahamas would seek to monetise this in a different way via the carbon credit route rather than engage in oil production.
“I am not in any definitive position now to say, but as I speak having come from the COP conference and having had conversations with world leaders, having had conversations with technical people, I am minded not to allow oil drilling and for certain at this time I am not prepared to move toward oil exploitation,” he said.
Meanwhile Rashema Ingraham, executive director of Waterkeepers Bahamas, told Tribune Business that “there needs to be no other exploration done”. Given that Challenger’s previous exploration licences have all expired, she argued that the Government should instead monetise these four licence areas for carbon credits rather than move to renew them.
“As there are no active licences of any oil company, the Government is in a position to do that,” she said. “It’s been a flip-flop from all governments, but particularly the PLP administrations, for decades. We need him [the Prime Minister] to say these are the exact intentions of the Government, and how we’re going to go about it.
“If this is his version of environmentally-friendly oil drilling, where we’re not extracting any further, not going to issue any new licences and look at monetising those existing licence areas and wellfields for the benefit of Bahamians via carbon credits, we can see it makes sense as the way forward.
Distressed assets don't command a good price. If that's the plan then it will be a fire sale. Creditors will most likely bring this saga to a head sooner rather than later.
You have a choice of watching your investment disappear completely or use the last remnants to make a donation to a worthy cause. Enjoy this video of in ****pit view RAF Eurofighter Typhoon and consider a donation to Help for Heroes.
https://www.youtube.com/watch?v=wCqiiOO3ZzI
The oil exploration outfit’s presently troubled financial position raise questions as to whether it has the financial wherewithal to pay for four new Bahamas exploration licences, and fulfill any terms and conditions that may be imposed, plus whether the Government should even be entertaining negotiations with it until the talked-about restructuring takes place.
However, Mr Uliel said it was already “engaging with the new administration” on its application to renew its four licences for another three-year term, together with the obligation to drill another exploratory well in Bahamian waters during that period.
The Davis administration while in Opposition indicated it would take a more sympathetic approach to oil exploration in Bahamian waters so long as it met the necessary health and environmental safeguards.
However, reports yesterday suggested this stance may have been modified. The Prime Minister indicated that while exploratory oil drilling would be permitted, production and extraction associated with any find in Bahamian waters would not. Instead, The Bahamas would seek to monetise this via carbon credits or some other mechanism to gain a reward for keeping its oil in the ground.
Meanwhile, Casuarina McKinney-Lambert, the Bahamas Reef Environment Educational Foundation (BREEF) executive director, told Tribune Business it was “shocking” that Challenger’s financial statements “don’t state how much in licence fees for the last exploration period are still owed to the Bahamian government” or whether these have been paid.
“How can they list the former licences as assets when they expired at the end of June?” she queried. “With its current balance sheet, can the company meet its financial obligations and pay its debts, including the past due fees owed to The Bahamas and continue as a going concern?”
Mrs McKinney added that Challenger’s financial statements raised multiple questions requiring answers. They show the oil explorer as making a $1.359m operating loss in The Bahamas during the 2021 first half, yet peg the value of its “tangible and intangible” assets at $93.88m.
She called on Challenger to detail the assets included in this $93.88m valuation, and whether they incorporate the expired licences. “A hope to negotiate a renewal is not an asset,” Mrs McKinney argued, while also questioning whether the reference to an $8.065m deferred tax liability included the licence fees owing in The Bahamas.
“Where I’m at now, it’s almost certain they don’t have the financial resources in place to pay the outstanding fees,” she argued. “And they don’t have the financial resources in place to pay anything in the future. At this point they are hoping to be in a position. We cannot go on hope.
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http://www.tribune242.com/news/2021/nov/03/oil-explorer-shouldnt-be-blip-radar/?news
Whoever wrote that is talking about borrowing against future production. LGO enacted a similar agreement with BNP Paribas that was described more accurately as an oil swap agreement. Clearly 2 P reserves is a factor, but not the only one, in trying to convince a lender that the company is capable of producing a minimum viable quantity of oil over a given period in order to service a debt. It is the extracted crude that can be monetized and the rate of production is the critical factor. The 2P reserves, if insufficient, would be a limiting factor. None of this suggests that the 2P reserves are owned by the current operator. 2P reserves simply indicates production potential.
As I mentioned, LGO entered into an agreement with BNP Paribas for a total of US$25m which was split into two tranches. LGO drew down US$12.5m but quickly fell foul of covenants and were unable to access the second tranche. The company came under direct control of the bank who managed costs and limited capex to the bare minimum in order to keep the oil flowing sufficiently to ensure that the bank recouped most of the outstanding balance before agreeing a final settlement and handing back control to the company.
I would be wary of CEG entering into a similar scheme. Judging by the date mentioned in that Strategy Update RNS nothing has come of any negotiations.
Judging by the number of fag packet calculations that appear here to show potential revenue, I suspect that many investors don't really understand the nature of the beast. Take Goudron, for instance, which was operated under an IPSC and now operates under an EPSC. This field has been and still is the greatest contributor to production.
When calculating the value of the field (to CEG), for the purposes of obtaining finance, you need to be aware of what exactly an EPSC is. Firstly it is a production sharing agreement with the government who issue a licence covering a specific period of time that the licence will be in force. It is a licence to operate within the geographic boundaries of the field for a period of time that will generally be renewed provided that the operator remains in good standing and fulfils all the terms of the licence which covers both exploration and extraction of crude. The operator of the field agrees to terms that will include Minimum Work Obligations (MWO) relating to the number of new wells to be drilled and workovers to be completed in order to clean up and existing wells and maintain the flow of oil to the surface.
The contract also specifies tax incentives to encourage the drilling for new oil and defines what payment in the form of netbacks that the operator will receive for oil that is extracted. There is a formula that determines the value of netbacks. The price per barrel of oil is based upon the average price, not the daily spot price, as determined by Heritage. The formula used is not simply production in barrels multiplied by price per barrel.
This takes us onto a fact that some of you may not appreciate. CEG do not own the oil in the ground and only see reserves monetized by virtue of that oil being extracted under terms of the licence. If the licence expires and is not renewed or is terminated, there is no residual value payable for oil that may still be in the ground and can be extracted by another operator under a similar agreement. The point I am trying to make is that the asset value of oil in the ground is a function of how much can be extracted and monetized under the terms of the agreement. It is not simply reserves based because those reserves don't belong to the operator.
I hope that is helpful even though it is an oversimplification.
The oil explorer seeking to renew four drilling licences in Bahamian waters yesterday admitted it is in “a stressed financial position” with outstanding bills exceeding its cash resources by $19m.
Eytan Uliel, the former Bahamas Petroleum Company’s chief executive, told shareholders of the renamed Challenger Energy Group that the company must urgently “pursue a creditor restructuring and recapitalisation plan” otherwise there was a risk it may be unable to continue as “a going concern”.
In a message that coincided with the unveiling of Challenger’s 2021 first half results, Mr Uliel said the six months to end-June had “not produced the positive, value-creating outcome hoped for” - partly as a result of its Perseverance One well failing to uncover commercial quantities of oil in Bahamian waters some 90 miles west of Andros.
He added that the $10m cost overruns on its Bahamas exploratory well, which took the total price tag to $45m, were a key factor behind Challenger’s increasingly strained financial position. And the $12m in unpaid bills, or payables, owed to various suppliers and vendors on Perseverance One account for 54.5 percent or the majority of the oil explorer’s $22m liabilities.
These liabilities, or payables, dwarf Challenger’s $3m in remaining cash resources that are being depleted at the rate of $200,000 per month to cover overhead costs while its Trinidad-based exploration activities are currently “cash flow break even” and will not be positive until 2022.
The oil exploration outfit’s presently troubled financial position will raise questions as to whether it has the financial wherewithal to pay for four new Bahamas exploration licences, and fulfill any terms and conditions that may be imposed, plus whether the Government should even be entertaining negotiations with it until the talked-about restructuring takes place.
Challenger, at end-June 2021, has $7m in cash resources to meet what was then estimated to be payables and borrowings of $23.3m. Included in the latter sum were $10.1m in bills owed to suppliers and vendors on Perseverance One, as well as $2.4m owed on financing instruments that funded the well’s drilling.
However, cash resources have now dwindled to $3m, while total payables remain at $22m and outstanding Perseverance One bills at $12m.
“The group currently estimates that it has a need for, in aggregate, approximately $15m in funding in order to continue to meet its obligations as and when they fall due over the coming 12 months or, in the alternative, achieve creditor settlements that would reduce the amounts payable, and thus have the same economic effect,” Mr Uliel told shareholders.
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http://www.tribune242.com/news/2021/nov/02/stressed-oil-explorer-facing-19m-deficit/?news
"Generally, company directors owe legal duties to the company and are obliged to act in the best interests of the shareholders of the company as a whole. However, directors are under a continuing obligation to consider whether their company is insolvent or is likely to become insolvent with no prospect of recovery. If the directors believe this to be the case, their duties change in nature because they are then under an obligation to act in the best interests of the company’s creditors as a whole."
New company, set up to replace current company?
Name Challenger Energy
Number 028910B
Registry Type Business Name
Place of Business IOMA HOUSE, HOPE STREET, DOUGLAS, IM1 1AP, Isle of Man
Date of Registration 22 Jun 2021
Presence of Charges No
Is in Liquidation? No
Receiver(s) Appointed? No
Status Live
COLUMBUS ENERGY RESOURCES LIMITED
Company number 05901339
Registered office address
Suite 121 60 St. Martin's Lane, London, England, WC2N 4JS
Company status
Active
Company type
Private limited Company
Incorporated on
9 August 2006
Accounts overdue
Next accounts made up to 31 December 2020
due by 30 September 2021
Last accounts made up to 31 December 2019
What happens if I file my company accounts late?
If you file your accounts late an automatic fine will be imposed on the company. The fines increase the longer you delay submission and the penalty is doubled if company accounts are filed late two years in a row. Public limited companies are also subject to higher tariffs than private companies. You may wish to refer to the Companies House Guide on Late Filing Penalties.
As well as the civil penalty imposed on the company, failure to file the company accounts is a criminal offence and the company’s directors (and company secretary) could face large personal fines and even disqualification from the role of director.
Failure to deliver company accounts may also result in the company being struck off from the public register. Many people are surprised how quickly a company can find itself faced with deregistration. The process is detailed in section 1000 of the Companies Act 2006. If you fail to deliver your company accounts on time the registrar will be deemed to have "reasonable cause to believe that [the] company is not carrying on in business or in operation".
My company accounts filing deadline falls on a Sunday. Can I deliver the accounts on the first working day after the weekend?
No. If your accounts due date falls on a Sunday or Bank Holiday you must ensure that you deliver your company accounts before this date or you will incur an automatic fine.
Half-yearly reports
18. An AIM company must prepare a half-yearly report in respect of the six month period from
the end of the financial period for which financial information has been disclosed in its
admission document and at least every subsequent six months thereafter (apart from the
final period of six months preceding its accounting reference date for its annual audited
accounts). All such reports must be notified without delay and in any event not later than
three months after the end of the relevant period.
The information contained in a half-yearly report must include at least a balance sheet, an
income statement, a cash flow statement and must contain comparative figures for the
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may contain comparative figures from the last balance sheet notified). Additionally the
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AIM company and directors’ responsibility for compliance
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these rules and the AIM Rules for Nominated Advisers, including any proposed
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— ensure that each of its directors accepts full responsibility, collectively and
individually, for its compliance with these rules; and
— ensure that each director discloses to the AIM company without delay all
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The only similarity between my Wendy and Willec is that no one can shut them up! Love my girl x
https://www.youtube.com/watch?v=XuxGDRq3Oco
· A further £1,083,298 (US$1,500,000) held as restricted cash and £487,477 by way of a loan to FRAM Exploration Trinidad Ltd. for the investment in the Pilot CO2 EOR Project.
.Operator of the Inniss-Trinity Incremental Production Services Contract unilaterally elects to shut down the CO2 EOR Pilot Project.
· Predator Oil & Gas Trinidad Ltd. considering its next steps under the terms of the Inniss-Trinity Well Participation Agreement.
https://www.lse.co.uk/rns/PRD/interim-financials-for-6-months-to-30-june-2021-snn1hgtmyf4l2ft.html
"Generally, company directors owe legal duties to the company and are obliged to act in the best interests of the shareholders of the company as a whole. However, directors are under a continuing obligation to consider whether their company is insolvent or is likely to become insolvent with no prospect of recovery. If the directors believe this to be the case, their duties change in nature because they are then under an obligation to act in the best interests of the company’s creditors as a whole."
Trading whilst insolvent is a legal term used to describe a business which continues trading despite being insolvent. It can lead to a breach of several provisions of the Insolvency Act 1986 (including wrongful trading), therefore it is important to take care and know the risks if your business is struggling.
As a director you are protected from the consequence of a failed company by the veil of incorporation, PROVIDED that you acted reasonably, responsibly and within the law. Failure to do so could make directors personally liable for the company's debt.
It should be noted that due to the Coronavirus pandemic, emergency legislation had been enacted that allowed some relaxing in the rules surrounding wrongful trading. The idea was that directors could not be held personally liable if they continued to trade when the situation was so unclear going forward. As of June 2021 this is no longer the case and directors can be sanctioned.
https://www.gov.uk/government/publications/options-when-a-company-is-insolvent/options-when-a-company-is-insolvent
Is CEG technically insolvent?
Leo Koot perhaps ?
Let me think about that!
https://www.youtube.com/watch?v=gV1MWANEsus
Approaching the third anniversary of the shutdown of the Pointe-a-Pierre Refinery, Minister of Energy and Energy Industries Stuart Young says three international bidders are in the running for the acquisition of the Guaracara Refining Company.
Guaracara oversees the refinery, which was mothballed in 2018 after the government closed Petrotrin and retrenched over 5,000 workers.
During yesterday’s debate on the Appropriation (Financial Year-2022) Bill, 2021, Young remained adamant that the government did not shut down Petrotrin.
He said it restructured Petrotrin to create Guaracara, Heritage Petroleum Company Ltd, which oversees Exploration and Production (E&P), and the Paria Fuel Trading Company, which imports and distributes fuel domestically and regionally.
He said the latter two State companies are making profits.
“Three international players right now are being assessed and evaluated. Let us see where that goes,” Young said.
The news comes months after the government thrice rejected proposals from Patriotic Energies and Technologies Co Ltd - a company incorporated by the Oilfields Workers’ Trade Union.
As for the new entities, Young reported that for the period ending June 2020, Heritage made a profit of $700 million with revenue of $3.2 billion and paid taxes, levies and royalties totalling $700 million.
For the nine months ending June, profit increased to $1.2 billion with revenue of $4.9 billion and $606 million in taxes, levies and royalties paid.
With oil and gas production forecasted to increase in 2022, the Ministry expects an increase in projected revenue. It also hopes to get royalties from both oil and natural gas production, exceeding $5 billion.
https://www.guardian.co.tt/news/three-international-bidders-compete-for-refinery-6.2.1401516.3afd7be379
ARKeX went into administration a few months later. I have always wondered if LGO paid for the survey on time or whether owed dues contributed to the demise of ARKeX.