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For what it’s worth I think we should hear something this week or next by the lasted. The committee surely cannot impose a deadline of 30 days plus 10 days, then take 1 month or so to respond, particularly with something as important as to lift or keep in place the Stay.
Odds on they will lift it, show the ROI they cannot stick two fingers up to the ICSID by not engaging in any discussion with RKH and making a mockery of the ICSID ruling without consequences.
LTT
Hi have to say I am a little surprised at the lethargy in the share price considering we are on the cusp of the Stay being lifted and RKH and Lawyers being let off the leash!
I know that RKH will have to ring fence assets in an international bank and won't be able to get their hands on anything until the end of proceedings in 1stQ 2024 but news could drop anytime from now up until just before the AGM. Then the lawyers will hopefully have a long list of easy pickings that will cause the most embarrassment to ROI. Then it's all downhill to the annulment decision, which let's face it, they are unlikely to reverse the 3 judges unanimous decision to pay up in RKH favour. It would be highly embarrassing for the ISCD and more importantly open a can of worms on past and future decisions .
Can't believe it's so quiet here, but I suppose we just have to wait for Navitas to announce their new partner coming on board pre FID and some news on funding.
Right back to sleep until the AGM.
LTT
I think if Navitas were taking a stake in Borders volume would be up rather than the 2 trades for less than 20k shares!
I can't help feel we are clutching at straws. I would be more than happy see a big announcement that Navitas are on board, or Delek are taking a stake, but just cannot see it at the moment. Navitas are too busy with the development in the Gulf of Mexico and working up to FID for Sea Lion, so why would they look at Borders that would need a lot of work so get to FID. With Sea Lion there is a plan, the horse work has been done over many years by PMO, Navitas are just fine tuning.
Of course once Sea Lion is signed off and drilling starts, there will be more interest, as there will be a footprint down in the Falkands to get going, but even so Borders would need a higher spec'd rig than is needed for development drilling on Sea Lion and that cost to mobilise it to the Falklands could be Borders downfall until RKH is earning from Sea Lion, then they might share a rig to drill it's look a like prospect in the Southern Basin.
Don't get me wrong I would love Borders to drill next year/get bought out for 20p/get cash to fast track , but hope doesn't mean it's going to happen anytime soon IMHO. Even so I keep my fingers crossed.
LTT
Thanks for the heads up markednmbr1, I have a few warrants in my HSBC account that I need to exercise, might be worth asking for them sooner rather than later. Wouldn’t want to leave it till Oct or Nov and then they turn around and say I can’t have then. Even as of today they are worth almost a 50% gain.
LTT
It's like someone posted on this board or another BB, we plough on down this path to get to net zero, but we end up importing expensive energy, food, products that are made/grown elsewhere, where they are using coal, gas and oil because they are not restricted to the "Net Zero" policies! We are just passing our carbon footprint on to someone else.
We have the NS should use it to keep the lights on while we transition, but knee jerk reactions don't do anyone any favours.
LTT
Agree in the EPL, they might put in a floor of some kind, but then Labour will get in next year and take in away and put in place higher taxes as part of their “transition” plan to renewables. How can any company invest in the UK O&G industry, or the energy industry as a whole without consistency. Why would anyone invest in a 10 or 15 project with a short sighted government!
I hope Harbour continue with their plan to branch out overseas, wind down their NS assets and remember to switch the lights off when they leave!
LTT
XKR2022,
part 2 of the update said the following;
"2: that Rockhopper shall, within 30 days of the date of the decision, apprise the Committee of arrangements agreed with Italy for the mitigation of the risk of non-recoupment or that negotiations have failed and, in the latter event, propose concrete arrangements in accordance with the decision for the mitigation of the risk of non-recoupment. Italy may then briefly comment on Rockhopper's proposal within 10 days, constructively highlighting any areas of disagreement between the Parties.
The provisional stay remains in force during this time, pending further order from the Committee."
And then more recently from the Final Results RNS on the 30th May, RKH said,
"Italy has refused to comply with the Panels instructions. Rockhopper intends to continue to work in good faith to resolve the issues raised regarding non-recoupment and has submitted to the Panel its proposal to mitigate this risk. The provisional stay remains in force during this time, pending further orders from the Committee."
So basically ROI has stuff two fingers up to the ICSID. RKH as they say are continueing in good faith to mitigate the risk of them going for assets/cash, pocketing the lot, RKH going on a spending spree ;-) THEN the annulment goes in ROI favour (unlikely considering the recent refusal to comply) and ROI cannot get their money back!
I cannot believe RKH should still be made to ring fence the assets to allow ROI some sort of protection. They should lift the Stay; they should allow RKH lawyers to go after assets and cash and keep it, then any annulment award in ROI favor, make them come after it through the courts and drag it out for 5 years!
I realise that would be a foolish and expensive attitude to take, but it really pi55es me off that the ROI have not engaged with RKH despite the ICSID ruling. They have dragged this on and on and are still possibly hoping that RKH will go bust before they have to pay anything.
That aside, the Committee should be reasonably timing with a reply as they put a time limit of 40days in total, it would be very lax on their part if they were to allow a further couple of weeks or months to pass before updating RKH on how they can proceed. IMHO
LTT
I wonder what the deal will be? Free carry for 75% ? Cash and free carry? With a MC of just £20m I think many would bite anyones hand off who offered £40m or £50m, me included.
I know on paper we are worth far more, but it all comes down to what someone is willing to pay. Argos is sat right next to RKH who are heading to FID, and they have been almost nothing and shareholders will be locked in for who knows how long once the deal is done.
Fingers crossed we get a good deal that everyone can be happy with, and not a buyout by some Canadian consortium wanting to take us private for peanuts!
LTT
I have just read Mexico has approved Zama to go ahead, but can't help wondering why Sea Lion was dropped for this!
Harbour will pay $0.5B for approx 22k barrels a day when Zama reaches peak production in 2029/30. This is of course if there are no delays from Pemex, which going by their track record it highly unlikely.
When you consider Harbour would have had 40% of Sea Lion with 30% Navitas and 30% RKH, they would have had 32k barrel per day with the new project plan and it would have cost them approx $0.5B to first oil, and if you look at the new possible timeline of first oil in 2027, that's a good 2/3 years sooner than Zama.
With the above in mind, with Navitas ready to accept 30% on a more expensive project (from the PMO days), it stands to reason that another player is highly likely to join the project. Probably taking 30%, cannot imagine Navitas giving up 35% and operator status as is would be like musical chairs for the FIG and would look not look good IMHO.
LTT
Thanks Mogger,
it reads that although the UKGov is no supporting oil development via UKEF in the FI, they are also not hindering it either,
"The UK Government regularly discusses development of a Falkland Islands hydrocarbons industry with the Falkland Islands Government and is working with the Falkland Islanders to ensure they can access UK expertise."
I wonder what they have been talking about, as Ian Ramsey would no doubt have the connections and access to UK expertise through his years in the industry.
LTT
Hi Ovets, I totally agree, I recently attended a talk by the curator of The Museum of Failure, which along with German spray on condoms and fat free Pringle’s that gave you explosive diarrhea ( which was rephrased as Anal Leakage ) they had some Bic Pens that were branded as Her, pens for women, which were pink, had glitter and where twice as expensive as general pens. The curator brought up an interesting point (which is the point of this off topic post) why did nobody speak up about such a bad idea? In a huge organization such as Bic, where the idea would have past through many research groups to get the market, why did nobody say anything. The issue is fear of standing out, going against the consensus, being ridiculed for not being onboard. What sort of environment would that be like to work in! No physiological safety.
So conspiracy maybe, but most likely stupidity.
LTT
Yes, hopefully RKH lawyers have been busy making a list and checking it twice! I mean, let’s face it, they have had since August when RKH won to get started on it, after all their dealings with ROI they must have been pretty sure they would try for the annulment so no excuses.
With a bit of luck they will have some big price tag items that would cause maximum embarrassment/inconvenience to ROI. Maybe take a leaf out if Cairns book didn’t someone say they went after diplomats properties?
Fingers crossed. Surely the arbitrators must look on Italy in a bad light after all the stunts they have pulled, plus more recently,
“ Italy has refused to comply with the Panels instructions. ”
They should pull the Stay and the requirement to put the assets in a Bank, they should let RKH lawyers go for it and let ROI stress about recovering anything they MIGHT be owed! IMHO
LTT
So we go back to the dark ages, literally if we relay on wind and solar after cancelling all new exploration in the NS whilst China and India grow unrestrained! Then when the lights are flickering because of the push for electric cars have caused the national grid to collapse, we start importing expensive energy from overseas to take up the slack.
You couldn’t make it up! Oil and gas from the NS can help with the transition and keep the lights on while we do it, no need for knee jerk reactions, just to win votes. We went down that rabbit hole a few years ago and look where we have ended up! Do we really want to make the same mistake!
LTT
Good evening SpaceHoppa,
Yes it’s interesting that Navitas have mentioned bringing someone in prior to FID, Sam had said it wouldn’t happen until post FID. Of course things change and maybe Navitas has tested the water, passing the hat around and come up a little short and thus to get the funds in, they need another player with cash to get the ball rolling so to speak. To be honest I always thought a 3rd party would be involved, not many oil companies would take on the risk of 65% even of a sure thing, as we all are well aware it’s so easy to grasp defeat from the jaws of success, just as Desire, Fogl, Argos and PMO to name but a few!
Like you I gave an ISA full of RKH that can happily sit until first oil. Let’s face it, OM, FID, will start the share price rise, but when RKH is getting 28k barrels a day @ $70+, 365 days a year, well we can all do the maths, but let’s just imagine what the share price could be when the dividend is around the current share price!
Happy bank holidays everyone.
LTT
Hi Space,
well we will defiantly hear prior to the AGM that's for sure, even taking into account the 30 working days and then adding on the 10 days for Italy to respond. I cannot imagine the talks if any have been had would have gone the wire of 30days, they would either have agreed, which means we should get news sooner or they haven't and ROI are already in their 10 days window in which to make comment.
Either way there is plenty to be positive about, either ROI have agreed with RKH on a bank where seized assets will sit once the Stay is lifted, so RKH lawyers get started OR ROI have spit the dummy and RKH has still suggested a bank where seized assets will be placed until the annulment proceeding are completed. Which sort of begs the question, why they had to ask ROI to be involved in the process in the first place, unless of course they wanted give the ROI the chance to pony up the cash to put in the bank so they wouldn't suffer the embarrassment of having assets seized!
Still it would be great to hear that ROI has deposited 260+m Euros in a bank account so once the annulment is complete it is just a bank transfer away from RKH account. Then it will be happy days, being able to fund our share of pre-FID costs thus negating the need to pay 8% interest during the next 3 years of development.
Get a partner in too and what happens to the share price then? I wonder if Ithaca Energy will come onboard, surely they are being hit by the EPL like Harbour. I know they are focused on the UK, but with Hunt saying he stepped up the plate giving households energy bill relief and will do it again if necessary, how can that be good for investment in the UK energy sector, plus the spectre of Labour getting in and taking the EPL further doesn't bode well. Could Harbour come back to the fold? Unlikely I know, but with them pinning their hopes on Mexico and Zama, yet Pemex who are operator are struggling with overruns on their Mega Oil Refinery, that has got to effect where funds are allocated going forward!
Linda we regret not keeping Sea Lion I am sure.
LTT
The bottom line is you can’t, maybe if they drill and had a discovery they could get bought out by a bigger player, then you would get a percentage depending on what percentage of JHI you own OR they could re-list in the future but that is way, way down the line I’m afraid. Drilling in the North Falklands basin most likely won’t happen till 2026 or later. Possibly something could come of their acreage off Guyana but they are waiting for other players to drill to ride on their coat tails. IMHO Story of Falkland’s Oil exploration all over, always waiting on someone else!
Good luck whatever you decide to do.
LTT
DEM, Thenorseman, totally agreed, they are lining up for a partner and have someone in mind no doubt. Say they were to let someone in to take 30%, someone with deep pockets that would be $400m they wouldn’t have to find, what cost to farm in to 30% of the whole acreage? $100m ? $200m? Or maybe some funding at 0% as Navitas has done for RKH, say offering to fund 50% of development costs at 0% in return for their 30% of SL and the surrounding acreage!
I am sure those clever people at Navitas will come up with something. So FID 2024, that means a partner comes in this year! Nice.
LTT
Hi PortStanley, I was thinking the same, we are a couple of weeks away from an OM update that says that RKH and ROI have agreed a bank with whom they will deposit cash/assets OR ROI won't play ball and RKH has selected an a bank where it will deposit seized assets until the outcome in 1stQ 2024! Surely that would affect the share price to the positive as it removes most of the risk of getting paid once the decision has been made.
There were many on here saying "We might have won the case but how do we get the cash?" then, "We may win the annulment but then it will take years of court cases trying the seize assets!". This would put that argument to bed.
Unsure if the committees statement in the RNS meant 30 working days or just 30 days i.e. one month. The reason I mention it in because normally they would state working days as previously, but in this instance they said 30 days, as they did when they gave a break in the interest on the 190m, they said 4 months, not XX amount of working days. So we could in theory hear something as early as next week.
LTT
Hi Portstanley,
Sorry if I got it wrong, I thought I’d read or heard somewhere that FID had offered to pay towards defence from oil revenues. Maybe I’m mistaken.
So we are maybe in the hands of the Home Secretary!!!!! Gosh may the Lord help us! 😉
LTT
Thanks Mogger, DEM,
My only concern is that UKGov involvement will delay things as they couldn’t organise a drinks party in a brewery IMHO and are most likely to either kick the can down the road or just steer clear in the anti fossil fuel environment.
Do UKGov have any say in whether FIG can go ahead with oil development or not? Surely FIG offer to share costs with UKGov for its defence would convince them to sign off on things.
Regards
LTT