Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
"just for your background information: in the days of LGO, Ritson paid a lot of money for a plane to fly over the area."
LGO says that airborne survey contractor ARKeX Limited ('ARKeX') has now successfully completed the Full Tensor Gravity Gradiometry ('FTG') survey in Trinidad announced by the Company on 15 January 2015. All the planned data has been gathered and accepted as being within specification.
As reported previously the aircraft commenced flying the gravity and magnetic survey over the entirety of the prospective onshore and near-shore areas of Trinidad in mid-January. The data gathered covers an area of approximately 5,700 square kilometers and has now been transferred to ARKeX's head office in Cambridge, UK where initial data processing is already underway.
LGO has acquired a license to the entire survey and it is expected that the initial processed results will be available within several weeks and will then be used over the coming months in more detailed interpretation work in both the producing Goudron Field and in the Cedros Peninsula where the Company holds approximately 10,900 gross acres of underexplored prospective leases.
http://www.scandoil.com/moxie-bm2/oil/seismic_/arkex-completes-ftg-survey-for-lgo-energy.shtml
"Have PRD been told to go away, unless they are interested in still buying the field for $4.8m, or has the price gone up?"
The SPA has lapsed. PRD had an option but not an obligation to purchase FRAM from CERP/CEG. The option had been extended multiple times as deadlines were reached but it was obvious that PRD would never pay the full asking price.
I believe that CEG owe PRD all the costs of the pilot scheme plus 50% of any oil produced after the costs have been recovered.
I'm sure that SC would say the claim is disputed. Good luck with that.
Harry, the Tolmount platform is new, constructed by Rosetti Marino in their yard at Ravenna, Italy.
"Rosetti managed the construction and installation of the low-carbon design jacket and topsides on behalf of Premier Oil. The project involved more than 1,100,000 manhours, was executed LTI free, and was completed in 26 months. "
https://www.offshore-mag.com/field-development/article/14185460/tolmount-gas-field-platform-installed-in-the-uk-north-sea
I second the Vodafone sentiment. As for a deal with Dana, that is quite a likely scenario and makes commercial sense. KNOC want out and HBR are in pole position.
Deferred tax assets arise on recognition of deferred tax liabilities which arise on taxable temporary differences. As these temporary differences unwind, release of the deferred tax liabilities creates a taxable profit against which deferred tax assets are utilised. As at 31 December 2020, the Group had an unrecognised deferred tax asset of $47.7m calculated at 45.7% (weighted average across taxable entities) in respect of $100.5m. The deferred tax asset was not recognised as there was insufficient evidence to suggest that it would be recoverable in future periods.
From the date of acquisition, Columbus Energy Resources PLC contributed $1,417,000 of revenue and $4,149,000 of loss before tax from continuing operations of the Group. If the combination had taken place at the beginning of the year, revenue from continuing operations would have been $3,507,000 and loss before tax from continuing operations for the Group would have been $28,251,000.
Bank deposits consist of funds held as security for bank loans in Trinidad. Funds restricted against licence related bonds consist of $30,000 relating to the Group Uruguay licence and $439,000 relating to the Group's licences in Trinidad. Amounts held at the year end have been classified as current as they may be recovered at any point following cancellation of the associated corporate credit card facilities, discharge of the relevant licence obligation or cancellation of the relevant licence and repayment of the relevant bank loans.
In one of the Group's Trinidadian subsidiaries, there are licence fees and commitments relating to an exploration and production licence that the subsidiary is expecting to settle by way of negotiation with the Ministry of Energy and Energy Industries. These negotiations are continuing in 2021. A provision has been recognised to reflect management's best estimate of its obligation at balance sheet date.
As at 31 December 2020, one of the Group companies, FRAM Exploration (Trinidad) Ltd, has been named as a defendant in an ongoing matter in the High Court of Trinidad and Tobago in place since 2019. The Group's exposure, in the event of an unsuccessful defence of the claim, is estimated to be in the region of $0.7m to $0.9m, referable to the sums claimed, interest and legal costs. The Group has filed a counterclaim which, if successful, will reduce the Group's liability without fully extinguishing it. The parties to the claims are in the process of settlement discussions, which are scheduled for a case management conference before a judge in February 2022. The matter has not been concluded and its outcome cannot be reliably estimated at this stage. In accordance with International Accounting Standards (IASs) - 10 and 37, no provision has been made in these financial statements in relation to this matter.
The junior facility of US$400 million carries interest at 6-month USD LIBOR plus a margin of 5.25 per cent., rising to a margin of 5.5 per cent. after four years, and is repayable in semi-annual instalments between 30 June 2022 and 30 June 2026.
"Harbour Energy intends to use the gross proceeds of the Offering to repay in full and cancel its Shell Junior Facility, partially repay drawings under its senior secured reserves-based lending facility and for transaction fees and expenses."
I don't know the details of any restrictive covenants related to the Shell Junior Facility but it's possible that repaying in full and cancelling the facility may give the BoD more flexibility around issues such as hedging. I think it's likely that the facility came with various restrictions which will no longer apply and perhaps enable the BoD to take advantage of higher O&G prices.
Energy:
We anticipate higher energy revenue due to higher prices and more output.
Natural gas expected to increase to 2.77bcf in 2022 and 3.37 bcf in 2023. Oil and condensate production expected to rise to 64,000 barrels per day by end of 2021 and 86,000/day in 2022.
Bid rounds to include 11 deepwater blocks, 12 land blocks, 25 open water blocks.
A comprehensive review of our oil and gas taxation regime soon to include petroleum profits tax, supplemental petroleum tax and royalty, relevance of suite of incentives, licensing regimes and production sharing contracts to ensure motivation for bids and at same time ensure T&T citizens get fair share of resources.
https://www.guardian.co.tt/news/budget-2022-highlights-6.2.1394755.51e66d669b
Best/Worst Case Rating Scenario
International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579.
Liquidity and Debt Structure
Strong Immediate Liquidity: Harbour's capital structure is dominated by a senior secured RBL facility maturing in 2027 with current availability of USD3.3 billion. Harbour's planned notes will be subordinated to the RBL and are meant to be mainly used to repay the USD400 million junior facility from Shell. Harbour's liquidity buffers are represented by the unutilised RBL portion (around USD700 million at 30 June 2021) and unrestricted cash (USD424 million). We view Harbour's immediate liquidity position as strong but it could be affected by RBL re-determinations and possible acquisitions.
Issuer Profile
Harbour is a medium-scale independent oil and gas producer with assets mainly in the UKCS.
Date of Relevant Committee
24 September 2021
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
Harbour has an ESG Relevance Score of '4' for 'Exposure to Environmental Impacts' due to high decommissioning obligations, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg
Key Assumptions
- Brent price of USD63/bbl in 2021, USD55/bbl in 2022, and USD53/bbl in 2023 and 2024
- TTF price of USD10/mcf in 2021, USD6/mcf in 2022, and USD5/mcf in 2023 and 2024
- Production volumes averaging around 200 kboe/d through 2024
- Capex (excluding decommissioning) averaging approximately USD750 million per year through 2024
- Dividends paid out from 2022
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive rating action/upgrade:
- Material improvement in the business profile (e.g. much higher proved reserve life and lower production costs) while maintaining a conservative financial profile (FFO net leverage below 1.5x)
Factors that could, individually or collectively, lead to negative rating action/downgrade:
- FFO net leverage consistently above 2.0x
- Falling proved reserve life
- Falling absolute level of reserves
- Consistently negative FCF after dividends
Hedging Policies Positive: We positively view Harbour's hedging policy, which should protect its cash flows in case of a significant drop in oil and natural gas prices. We estimate that currently 36% of its liquids production and 57% of its natural gas production in 2022-23 are hedged at an average price of USD61/bbl and USD6.2/mcf, respectively (mainly using swaps). This is above Fitch's price deck used for the period.
Addressing Energy Transition Risks: We assume that at least in the next three to five years the impact of energy transition on oil and gas companies will be limited. However, over the long term industry participants, and in particular pure upstream players, may be subject to more vigorous regulations, and their margins could be affected by carbon taxes and other regulatory measures. We view positively Harbour's target to become carbon neutral on the Scope 1&2 basis by 2035 through minimising emissions and investments in carbon offsets.
High Decommissioning Obligations: Harbour has an ESG Relevance Score of '4' for 'Exposure to Environmental Impacts' due to high decommissioning liabilities, which negatively affect the company's cash flows.
Harbour's pro-forma decommissioning liabilities at end-2020 were high at around USD4.5 billion (pre-tax, excluding a refund from Shell), or around USD8/boe per 2P reserves (Aker BP: USD3/boe; Ithaca Energy Ltd (B/Stable): USD6/boe). Most decommissioning-related cash outflows are long term and tax deductible. Fitch's approach is not to add decommissioning liabilities to debt, but to deduct them from projected operating cash flow as they are being incurred. We assume that over the forecast horizon Harbour's gross decommissioning expense will average around USD300 million per year on a pre-tax basis.
Derivation Summary
Harbour's level of production (pro-forma 2020: 234kboe/d) is comparable with that of Aker BP ASA (211kboe/d) and higher than that of Lundin (165kboe/d) and Neptune (165kboe/d). Its 2P reserve life is low relative to peers (seven years in 2020, compared to Neptune's 12 years and Aker BP and Lundin's 11 years) and counterbalanced by substantial 2C resources and low leverage (FFO net leverage below 2x in 2021-2024), allowing for acquisitions.
Key Rating Drivers
Largest UKCS Player: After acquiring ConocoPhillips' UK assets in 2019 and Premier Oil plc in 2021, Harbour has become the largest UK Continental Shelf (UKCS) player by level of production. The company's current production (2021 proforma guidance: 185-195 thousand barrels of oil equivalent per day, kboe/d) is focused mainly on the UK (more than 90%) but well-diversified by hubs. Harbour operates over two-thirds of its production, which makes its capex fairly flexible; and its portfolio is well-balanced between liquids (around 55% of production) and natural gas (45%).
Low Reserve Life: Harbour's reserve life is lower than peers. In 2020, its 2P reserve life based on the pro-forma production stayed at seven years, lower than that of Aker BP ASA (BBB-/Stable, 11 years), Lundin Energy AB (BBB-/Stable, 11 years) and Neptune Energy Group Midco Limited (BB/Stable; 12 years). This is mitigated by Harbour's conservative leverage, which should allow for acquisitions, and substantial resources (2C), a significant share of which relates to assets in production or under development.
While Harbour should be able to maintain relatively stable production in the medium term from the current reserve base, its production potential over the longer term will depend on its ability to replenish reserves organically and through acquisitions.
High Costs, Low Taxes: Harbour's current cost position of USD16/boe is fairly high, albeit typical for UKCS, and could put the company at a disadvantage in a consistently low oil-price environment. This is mitigated by Harbour's favourable tax position with significant accumulated losses, which should largely shield it from taxes in the next five years. Overall, Harbour's Fitch-projected unit margins (funds from perations (FFO)/boe) are broadly comparable with its North Sea-focussed peers.
Conservative Financial Policies: Harbour targets maintaining net leverage (defined as net debt to EBITDAX) below 1.5x through the cycle. Our projected FFO net leverage below 2.0x over 2021-2024 is commensurate with the company's target, although we recognise that leverage could be affected by potential acquisitions. We assume dividends will be paid in 2022-2024 but note that the company is yet to formalise its dividend policy.
Moderate Capital Intensity: We assume Harbour's capital intensity to be moderate relative to peers at around USD10/boe produced over the forecast horizon, or around USD750 million per year (excluding decommissioning obligations). Harbour's focus is on small scale, short cycle capex with projects largely based on the current infrastructure, including infill drillings. Harbour operates around two-thirds of its production, which gives it a reasonably high degree of control over its capex budget.
Mon 04 Oct, 2021 - 05:54 ET
Fitch Ratings - Moscow - 04 Oct 2021: Fitch Ratings has assigned Harbour Energy PLC a Long-Term Issuer Default Rating (IDR) of 'BB' with a Stable Outlook. Fitch has also assigned an expected senior unsecured rating of 'BB(EXP)' to Harbour's upcoming notes with a Recovery Rating of 'RR4'.
The notes' final rating is contingent on the receipt of final documents conforming materially to information already provided.
Harbour's 'BB' rating reflects (i) its increased scale of production following the completed acquisitions; (ii) low financial leverage and conservative financial and hedging policies; and (iii) a favourable tax position. At the same time, Harbour's 1P and 2P reserve life is lower than peers' (2P: seven years based on the 2020 pro-forma production), and its cost of production and decommissioning liabilities are high. We believe that Harbour should be able to maintain broadly stable production from the current asset base in the medium term. Its longer-term performance will depend on its ability to pursue M&A opportunities or transfer contingent resources (2C) into reserves.
We rate the proposed senior unsecured notes using a generic approach for 'BB' category issuers, which reflects the relative instrument ranking in the capital structure, in accordance with our Corporates Recovery Ratings and Instrument Ratings Criteria. While most of the company's debt will be represented by the secured reserve base landing (RBL), the company's leverage is low and it plans to focus on unsecured funding.
That's a good point about South Erin jon044. The current farm out agreement with Heritage is due to expire at the end of December. CEG say "the Company is currently undertaking the necessary process for such a renewal" but it may well fall within the competitive tender process for South Erin Bay, in which case they may face losing that field.
I don't know what PRD might be interested in other than the IPSC at Inniss-Trinity. Again this is up for renewal at the end of December and I would not be surprised to see CEG lose the licence in favour of PRD, particularly in light of recent issues between the two companies.
2021 Onshore Competitive Bid Round
Call for Nominations
The Ministry of Energy and Energy Industries will be offering Onshore Blocks via a round of Competitive Bidding, in the fourth Quarter of 2021. Please find an invitation to nominate acreage, as well as the 2021 Onshore Nomination Map with the corresponding listing for the open Onshore acreage.
The following are some general guidelines for our Nomination Process:
1. Blocks eligible for nomination are as follows:
Aripero
Buenos Ayres
Charuma A
Charuma B
Cory D
Cory F
Guayaguayare
South West Peninsula
South West Peninsula – Erin Bay
South West Peninsula – Islote Bay
Tulsa
2. The period of Nominations is open from September 27th, 2021 to November 5th, 2021.
3. Companies are invited to nominate any number of blocks at any time during this period.
4. Nominations should be submitted via email to bidround2021@energy.gov.tt or via letter to:
Permanent Secretary
Ministry of Energy and Energy Industries,
Level 26, Tower C,
International Waterfront Centre,
#1 Wrightson Road, Port-of-Spain
Trinidad and Tobago, W.I.
https://www.energy.gov.tt/for-investors/2021-onshore-competitive-bid-round/
" Indeed, at times during the last 18 months production has gone as high as 500 barrels of oil per day, but then we have not been able to be sustain it at that level for the long term: wells go offline, power supplies get disrupted in inclement weather, and so on.
Our objective for 2022 is thus to crack that particular nut: how can we add 100 barrels or more per day of production from existing fields on a sustainable basis and increase cashflow even further? This will inevitably require some trial and error as we continue in our work to maintain and optimise field performance alongside remediation activities, but we are confident we will get there. We also hope that in 2022 the various Enhanced Oil Recovery (EOR) initiatives that have been tested and trialled through 2020 and into 2021 might ultimately provide some incremental production, too."
Environmental activists yesterday urged the Davis administration to impose a total ban on oil drilling in Bahamian waters after an explorer confirmed it has still to settle outstanding licence fees due to the Government.
Rashema Ingraham, executive director of Waterkeepers Bahamas, told Tribune Business it was “embarrassing” that the former Bahamas Petroleum Company (BPC) had now moved on to more promising exploration territory in Trinidad & Tobago without first settling its debts to this nation.
Calling on Challenger to “acknowledge debts owed to all creditors”, she said: “It’s embarrassing to see that Challenger Energy Group who, after not finding commercial quantities of oil, are considering moving on to another Caribbean country without settling its debt to the Bahamian people.
Ms Ingraham spoke out after the now-Challenger Energy Group, in its 2020 full-year financial statements released yesterday, confirmed it has yet to settle the licence fees owed to the Government for past exploration periods. While the sum outstanding was not disclosed, it is thought to be several million dollars.
Challenger, affirming that itself and the former Minnis administration last year “agreed a process seeking a final agreement on the amount of licence fees payable for the balance of the second exploration period, blamed delays caused by the COVID-19 pandemic for both sides’ failure to reach an agreement.
“This discussion has been delayed owing to the State of Emergency declared, and ongoing business disruption caused by the national response to the COVID-19 outbreak in The Bahamas. However, subject to said confirmation, the company expects that an appropriate side-letter agreement will be finalised in due course,” Challenger said.
Full article ...
http://www.tribune242.com/news/2021/sep/28/activists-urge-permanent-ban-all-oil-exploration/?news
Environmental activists yesterday urged the Davis administration to impose a total ban on oil drilling in Bahamian waters after an explorer confirmed it has still to settle outstanding licence fees due to the Government.
Rashema Ingraham, executive director of Waterkeepers Bahamas, told Tribune Business it was “embarrassing” that the former Bahamas Petroleum Company (BPC) had now moved on to more promising exploration territory in Trinidad & Tobago without first settling its debts to this nation.
Calling on Challenger to “acknowledge debts owed to all creditors”, she said: “It’s embarrassing to see that Challenger Energy Group who, after not finding commercial quantities of oil, are considering moving on to another Caribbean country without settling its debt to the Bahamian people.
Ms Ingraham spoke out after the now-Challenger Energy Group, in its 2020 full-year financial statements released yesterday, confirmed it has yet to settle the licence fees owed to the Government for past exploration periods. While the sum outstanding was not disclosed, it is thought to be several million dollars.
Challenger, affirming that itself and the former Minnis administration last year “agreed a process seeking a final agreement on the amount of licence fees payable for the balance of the second exploration period, blamed delays caused by the COVID-19 pandemic for both sides’ failure to reach an agreement.
“This discussion has been delayed owing to the State of Emergency declared, and ongoing business disruption caused by the national response to the COVID-19 outbreak in The Bahamas. However, subject to said confirmation, the company expects that an appropriate side-letter agreement will be finalised in due course,” Challenger said.
Full article ...
http://www.tribune242.com/news/2021/sep/28/activists-urge-permanent-ban-all-oil-exploration/?news
"On assuming control of the Columbus assets in August 2020, we found a business that was showing the effects of being cash-starved for a very long time under previous management. This was manifest in terms of low field activity levels, poor morale amongst staff - many of whom had been suspended or put on half pay at the start of the Covid-19 pandemic, inadequate policies and procedures, poor record keeping, local suppliers who had not been paid for some time and a business reputation in-country that was suffering."