Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Come to think of it, can’t see Navitas having a lower percentage than RKH, so a more likely scenario is two players taking 15% each, it leaves Navitas with 35% matching RKH. With RKH possibly having 100m in the bank 2nd half of this year, they should easily be able to find their share not covered by loans so they shouldn’t need to give up a further percentage of SL. Hopefully!
LTT
I wonder if we will get two new partners rather than one. When I look at the link to Beacon, and other FID announcements for that matter, there are usually more than 2 players involved and more commonly 4 for 5. On something as large as Sea Lion and the surrounding acreage I feel there may be a couple more players coming onboard.
Pure speculation of course, but if Navitas is struggling to get finance, they may need to sign up more players to share the risk/reward. Navitas keep 30% then two more players come in taking 20% and 15%. These could be other oil companies but could also come for oil traders and even suppliers. Once they are signed up and show they have the cash to pay their share, bank finance should fall into place IMHO.
I have no reason to believe Navitas will kick the can down the road as PMO did numerous times. Of course I cannot be 100% sure they won't, but as it stands I am giving Navitas the benefit of the doubt, that they have kept on plan for Shenandoah so why would Sea lion be any different?
LTT
Happy New Year Goddess, hope you had a good one.
I have to say I'm also a little disappointed in the lack lustre share price in the New Year, considering the warrants taken up and the OM announcement. However, despite this, the warrants fund the company near term and the OM monetisation will kick the need for further dilution "can" well and truly down the road. Also should the annulment rule in our favor after April, we should, with a fair wind, be funded through to first oil! Which is nice!
All the best
LTT
I don't think they have any plan other than sit and wait as Argos did. Once Navitas and RKH get a rig down there in 2025 for development drilling they might farm out the acreage or raise some funds to drill a few wildcats. It would make sense with a rig down there maybe during some down time, but other than that, nothing will move until Navitas fires the starter gun.
Borders are pretty much in the same boat, nobody is interested in a stand alone isolated development in the Southern Basin, even though the numbers say a couple of wells, an FPSO and it would pay itself off in a few years, nobody is interested in a stranded asset. But again, once kit and boots are on the ground down in the Falklands, I believe Darwin could be a goer, but Sea lion would have to be first. IMHO.
LTT
Compared to Shenandoah, Sea Lion will be like a stroll in the park! Despite the low share price it could be quite an exciting 2024. Lots of boxes to tick and ducks to line up, but how much has been going on under the radar? Either nothing or Navitas and Ian Ramsey are running a very tight ship!
I still believe once things start to happen, it will be like a rock heading down a hill, succumbing to gravity, it will just take a nudge to get it going, then it will start to roll, faster and faster until it starts an avalanche of news. FPSO; Long lead items; rig contract; support vessels; partner announcement; FID; Funding.
Not in that particular order, but if Navitas are to keep to their self-imposed timescale of 2026 for first oil, even last 2026, they cannot keep their progress under raps for another 12 months, something has to give.
Hopefully at the AGM this year we will be patting Sam and the board on the back for getting 80m in the bank from OM and some significant progress made on Sea Lion.
One can but dream, however this dream is a bit closer to becoming reality, the closest it's been for 10 years!
Lets hope 2024 it Happy, Healthy and Prosperous for all share holders.
LTT
With roughly 620m shares in issue and with the possibility of securing 80m Euros which will be about ÂŁ70m in 6 to 12months time (depending on the outcome of the annulment and the speed in which they share that outcome). This means we will be worth about 11p not including the cash raised from 2022 plus the warrants cash.
So we are currently valued at the cash we could possibly have in the bank in 6months time. This values 35% of Sea Lion; the surrounding prospects; the loans to get to first all; the Southern acreage; all the 100’s millions spent so far by RKH and PMO at zero. Not to mention the money Navitas has spent on new hires and the money they have put up for the FIG to hire a team to sign off and get this project over the line.
It’s quite amazing really that nobody believes this will happen apart from us current holders. I suppose it’s the same situation as with the warrants, keeping the money on the sidelines until the very last moment. Possibly, the bigger players are just wait for someone to blink, or make a move on RKH and then they will be all in or sell to the highest bidders.
This is my biggest concern now, not whether Sea Lion will be developed, but if we get taken out for a lowball offer, the longer we stay around these levels, the longer negative sentiment permeates into the BB, the longer it leaves us vulnerable.
Of course we wouldn’t get an Odey style attack to take the cash as it cannot be paid as a dividend and we still have the spectre of the FIG tax bill to be paid, but still it is a concern. Hopefully there will be some update from RKH or Navitas soon as something has to give if their plan is first oil 2026.
LTT
Space, can you put me done for 57p I was joking about hoping for £1, it would be fabulous, but can only see us getting to £1+ when oil is flowing as we are not doing any exploration on this trip. Although, maybe they might, with a partner, keep the rig down there for an extra 6 months to pop a couple of holes into Isobel and do some appraisal’s then of course all bets are off, a success on Isobel with a nearby development nearby, we might get into the £2+ region!
But as I say, but me done for 57p, I’d be more than happy with that 1st of Jan 2025.
LTT
Forget to say the 20p+ was on OM sign off and 15m in the bank, if the annulment hearing in April goes in our favour and they are pretty sharpish letting us know, then 30p+ once we have 80m in the bank. The reasons being it sets them up to first oil. RKH should easily be able to afford their share of costs not covered by loans provided by Navitas, who knows they may have enough to pay off part or all of their Pre-FID costs they are incurring at an 8% interest rate (from memory), although I have no idea how much Navitas have spent so far, but would be better paying off any high interest loans first.
LTT
Near term I'd be happy to see 15p+ on the RNS that the lions share of the warrants have been taken up. FIG sign off on the OM deal and we see 20p+, then on news the FPSO has been booked and a partner is coming on board 35p+. FID in Sept 2024 with a rig booked and being mobbed down to the falklands to start drilling Jan 2025 (Summer down there) then 50p+ and maybe more. From then on we should either see a steady rise to first oil OR we get taken out on the cheap if the company's worth isn't reflected in the share price.
But saying all the above, I'd still prefer to go with Neilius's guess or Stillneedoil's! ;-)
Happy New Year Everyone, let's hope this is finally the year of the Rock.
LTT
MD, you shouldn’t wish ill on anyone. Yes there are differing opinions, but that’s the spice of life, but wishing a “very nasty 2024” on anyone is not a very nice thing to do. Just stick to RKH and keep your ear to the ground.
Wishing EVERYONE a Happy, Healthy and Prosperous 2024 whether your a glass half full or half empty kind of person.
LTT
Well a incoming tide lifts all boats, once Navitas get FID sorted and an FPSO, things will buck up here for sure, Darwin will no longer be an isolated asset, it will be game on.
Have a Merry Christmas and hopefully a Happy, Healthy and Prosperous 2024.
LTT
Hi SpaceHoppa,
thanks for the clarification, its a fabulous deal, far, far better that I had hoped and we get the lions share once the OM annulment is thrown out.
Also let's not forget, RKH requested ROI for payment of 247 million in September 2022. Since then a year and 4 months have passed and it's likely another year will pass before they can start going after the money, so that's 28months times 1.25m euros a month which is an extra 35m Euros and that is IF they pay up then. The interest is adding up all the time so we could get more than 22m for the 3rd tranche. Of course that will be loose change as Sea Lion will be pumping by then, but it will still be welcome.
Many thanks
LTT
Hi ChessMaster,
I am wondering how you deduce that Partner/ Funding/FPSO /FID will occur Q3/4 2024. Do you see some slippage in the schedule of first oil into 2027?
I am just working back from the stated first oil in 2026 which Navitas seem to me sticking to. The FPSO news will have to come pretty soon if they have one in mind for the refit which could take a couple of years. I get that FID could come 3/4Q 2024 but funding will have to be sorted and a partner also before then to enable FID, no FID without the money!
Then there is the rig and long lead items, they will have to be booked in. It's going to take roughly 1.5 years of drilling and then there will be MOB from who knows where, so working back from first oil in 2026 means they will have to hit the ground running in 2024. Things could come thick and fast!
2024 is going to me interesting to say the least.
Regards LTT
But Godder/Decide, a few posts ago you were saying you wanted the company to go bankrupt, make your mind up mate!
Anyway, I see this as great news, no dilution to first oil and we can fund our share of development not covered by loans from Navitas. Well done Sam and the board. This gets Harbour paid off and we get substantial cash further down the line, AND 20% in the 3rd tranche, which could be a nice amount with the interest adding up and ROI stalling on payment. What’s not to like.
The issue of waiting for years to receive anything and the worry of further dilution to fund going after the OM award has gone, and it’s a far better deal that I expected.
Merry Christmas everyone and here’s to a Happy, Healthy and Prosperous 2024.
LTT
Hi Space,
I also read it that they have spent $14m, $11m and more recently $23m+.
To me they are ramping up the spend which all bodes well for FID in 2024. So they will have to secure finance pretty sharply prior to FID if they are serious about getting this show on the road. Personally I cannot think of anything Navitas have done that would imply they are lifting their foot off the gas. They have done more in the past 18months than PMO did over the past 10 years!
2024 might just be the year of the Rock!
LTT
Damned if they do, damned if they don’t. As far as anyone knows they might be attending by zoom, but nobody knowns.
Hopefully someone will update us with any details as and when they have time. So let’s just sit back and relax and just try and get into the spirit of the festive holidays. Next news on the calendar is in Jan saying all the warrants have been excercised and the OM final hearing has taken place. Anything else will be a bonus.
Warmest, festive regards to one and all.
LTT
I am sure Mogger won't mind me sharing this from one of his previous posts, it clearly shows how the FIG Mineral Departments budget has increased dramatically. Therefore I'd conclude they didn't magic the money out of thin air, they must have received the first payment of the and will receive the second payment next month.
Thinks are getting quite exciting.
Regards LTT
"The operating budget for the Mineral Department of the FIG has jumped YOY.
2022 - ÂŁ307,316
2023 - ÂŁ863,620"
https://www.legislation.gov.fk/view/html/inforce/2023-07-16/fiord-2023-3#sch.1
This is and extract from one of Moggers posts dated 16th November 2022,
"The structure and capacity of the current Minerals team is considered to be inadequate to ensure the successful delivery of the tasks required in order for FIG to be ready for the timely commencement of the Sea Lion project. Currently the establishment is 5.1 Full Time Equivalents (FTE) of which some is a Fixed Term Contract (FTC).
3.2 A new structure to support the project has been developed, and requirements identified with job descriptions written and graded. This change will effectively increase the department by 2 FTE.
3.3 The additional costs to secure and appropriately resource a team are to be met by the revenues received by FIG from Navitas REDACTED On the basis of the budgetary implications presented in section 2 this should result in circa 3 years of funding.
4.1 Under the Islands Plan 2022 – 2026 there is a commitment to “progress extractive industries in an environmentally conscious way”. More specifically within the delivery plan there are a number of clear objectives:
4.1.1 Put in place legislative priorities for Sea Lion project Offshore Minerals Ordinance
4.1.2 Undertake project management for Sea Lion project
4.1.3 Complete resourcing and recruitment for Sea Lion project
4.2 Over the past 15 years the size of the Minerals department has expanded and contracted according to the level of activity by industry. The current Minerals department has a small team of six established posts and one fixed term contract post. As of the end of September 2022 only the fixed term and the cleaner posts were filled.
4.3 The recruitment process for the new Director of Mineral Resources has been completed and a sucessful applicant is currently progressing through the on-boarding process.
4.4 During the farm-in negotiations between Navitas and FIG, and agreement was reached to secure a fee of $1,800,000 REDACTED. This will be paid to FIG in two instalments on 1 January 2023 and 1 January 2024. This revenue is expected to be used in part to fund the costs associated with ensuring that FIG is at the appropriate level of oil readiness for the Sea Lion project to commence.
Mogger"
Thank you Mogger.
LTT
Hi Buffit,
I seem to recall a link that Mogger posted that stated Navitas had put up some cash to support the hiring of FIG team to get them in a position to actually do the work, not point for example Navitas preparing an environmental report on migration patterns of marine life, submitting it, them FIG find out they don't have anyone to check it.
I will have look back through Moggers posts and see if I can find it.
LTT
Cheers Mogger, great to see things moving in the right directions.
With hindsight it makes it woefully clear now how PMO where just going through the motions until possibly the back end of 2019. They talked the talk but never did the one thing that we can see clearly now was so fundamentally important. Get the FIG to beef up its staffing levels to actually be about to plan, approve and sign off on things. FIG are being dragged into the 21st century and getting everything in place to be one of the richest nations per head on the planet.
Navitas knows it can deliver the plan, the production, the oil, the issue has always been were FIG ready for it? Well know it appears that they are.
Pity there seems to be no blockbuster news this side of Christmas, I had secretly hoped that the deadline for the warrants was put in to allow some news to boost the share price so everyone would take up their warrants, but then it appears the warrants will be taken up either way.
Roll on 2024.
LTT