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Sorry excuse my fat finger typing, meant
“ a LOI would show they have intent but it WON’T affect……..”
and
“ but WATCH the 2022 presentation when the head of Beacon does his talk…..”
Sorry about that.
LTT
Morning Chess,
I have to agree, a LOI would show they have intent but it would affect the share price materially as we have been there before. However a partner would be a game changer IMHO. If a mid cap came in to the tune of taking a 30-35% stake, who has operating experience and more importantly a war chest of cash, say $400m, it would be game on.
All the stuff Navitas mentioned about, vendor, bank and oil trader financing would all fall into place. I think that is why a 3rd party has been mentioned Prior to FID, I think the money people have said, yes we will put up the cash, but only if you have another player with with experience who will put a hefty amount of skin in the game.
Look at Beacon Offshore, ok they have a good backer in Blackstone Energy, but they have done the heavy lifting on Shenandoah, Navitas just sorted the cash. I know I’ve said this before, but what the 2022 presentation when the head of Beacon does his talk, he is really amazed talking about Navitas securing ALL the funding prior to FID, says it’s the first time that’s ever happened in his 30+ years in the industry.
So to my mind, next news will be possibly the FPSO, but the next BIG news will be the 3rd partner, then once that has sunk in, 12p should be a distant memory.
Plus all the warrants will be taken up if that happening this side of Christmas , which I believe there is a concerted effort by some on here to get investors not to take them up! I am unsure why, as even buying them today and selling them to market you’d make 30%. Why would anyone not do that, money for nothing!
Regards LTT
LaticsRule,
Maybe you caught him on a bad day, we all have them. I have corresponded with Sam via email and face to face at many AGM’s, never found him evasive, guarded yes, but he has always been open and plainly said what he can and cannot discuss.
I think it’s not far to continually bad mouth someone when you don’t make any effort to communicate with them. IMHO
Same goes for Godders, just pick up the phone, write and email, it’s not that difficult.
LTT
“An Alaskan $8-billion oil project, led by ConocoPhillip, to deliver 160,000 bpd of crude, with reserves estimated at between 400 and 750 million barrels. The lifetime of the project is estimated at up to 30 years”
You can understand why Navitas and RKH are quietly sorting things out behind the scenes. There would be greens all over this if Navitas started giving updates of their intentions, because let’s face it, once Sea-lion is up and running there is enough oil to keep drilling and pumping for the next 30+ years and then some.
In the current climate it’s hardly something to shout from the rooftops. No it would be better to just keep working and lining up the ducks, then have a blowout announcement saying it’s on, funding, FPSO, FID and project sanction all in one go. Then Argentina won’t have time to protest about it. IMHO. (With a tad of wishful thinking).
LTT
Sorry for the error in my last post, I posted it before re-reading through. I think you get the point.
Regard
LTT
I just cannot see UKGov backing the Falklands, it would be political suicide in the current climate. Why would they rock the boat, they are already being chastised for not going far enough with pulling licenses, can you imagine the fallout if they were to clearly support a green field development that could produce for 25+ years!!!!!
Of course they could pull out the “support the Falklands against the dreaded Argies card”, there is nothing live making an enemy to get the country behind, but just can’t see that happening.
The recent Navitas presentation is showing the way, third party with cash pre-FID, vendor finance they the banks and the traders will follow IMHO. If it turns out the be Murphy, then in an indirect way we have the US keeping an eye on things, that would be a BIG positive.
LTT
Makes you wonder why PMO didn’t think of doing that in the first place!
Still, it’s all water under the bridge now, we need to look to the future and the future is brighter than it has ever been.
Does anyone know if a letter of intent sent by Navitas to an FPSO company would have to be announced? I am pretty sure if RKH sent it it would need to be RNS’ed but not so sure with Navitas, plus as they are holding the purse strings, would they even need to inform RKH!
Hope we all had a good bank holiday. Regards LTT
Citizen, Chess,
I believe PMO and RKH were trying to secure vendor financing previously to get this over the line. With banks and investment funds shying away from oil and gas it seems all the more important than vendors put some skin in the game, as if not, no project will get off the ground!
Incidentally I read today that even France is reversing on its coal use as part of its “Energy Security” remit.
LTT
Hi Chess,
On the Munin spec sheet it says, "Double hull Aframax size suitable for North Sea", it also says, "Crude Separation Plant suitable for production of waxy crude at high temperature" which if I remember correctly is the type of oil we have in the Falklands. However it doesn't have any info on water injection, seawater treatment and gas treatment which I think we would need capacity for that, but it has ample space on deck, so maybe this could be added on as part of the repurposing when it's converted for Sea Lion production.
All speculation of course and could be way off the mark, but it is interesting that there is potential of 2 FPSO's without a lot of searching, so at least one of these must be on the short list and if they are seriously planning first oil in 2026/27 they will need to get it booked sooner rather than later and start working up the development plan so they can work out budgets and go after the funding.
I can't help feeling that after years of a poor partner just going through the motions, when things kick off, they will move thick and fast.
LTT
Ches, could the Munin be on the shortlist too? It’s another Bluewater FPSO, rated at 60k per day but has been exceeding 90k and is ready for redeployment. Also meets UK regs.
It would give a bit more wiggle room to increase production rates. Sam at the AGM said there was more than one, less than five being looked at and the final look of the SL development would be based on the FPSO production rates.
That being the case it’s stands to reason that the kingpin will be a LOI on an FPSO, then everything else can slot into place.
Regards LTT
Is it not just a formality that the Falklands request to drill and HMG agree? As has been said, the UK cannot overrule FIG, so if they want this to happen, and all the environmental boxes are ticket, why wouldn't HMG say yes?
LTT
Happy,
they will just have to knuckle down and get FID done in the first half of 2024 then!
;-)
Things seem to be moving at a pace with Navitas and also with RKH with these two new appointments. We have 4 months and a half until 2024, a lot can happen in that time. We should hear sooner rather than later that the Stay has been lifted and some news on where RKH are going after assets. Also the FPSO and RIG letters of intent, IF Navitas are serious about first oil 2026/27 they will have to get a move on with that, then there is the funding news.
I suppose what we need to ask ourselves is, is Gideon the type of chap who goes down to the Falklands and tells them it's going to happen face to face, then misses his own deadline by miles? We all know Tony of PMO days would do that, but the jury is out on Gideon.
Interesting times are ahead that's for sure.
LTT
Tommo1985,
Your totally right, if Navitas announce a letter of intent or funds are being raised in the form of a bond or the like, RKH share price should react to the opposite and therefore the warrants should all but be exercised before 31st Dec 2023. Then if a fund raise is on the cards we may have an option, either we sell all or part of the award once the annulment has gone in our favor,
as it will have a higher value, or raise funds (from hopefully a share price of 25p+) to go after the full, by that time €300m+ including interest.
As someone said though, fighting for €300m that might take another 4 years would be a sideshow compared to the $$$$$$ we are making with 35% of production in 2026/27, even with the paying back of the loans.
Either way it would be nice for shareholders to have a choice in the matter.
LTT
Hi Header,
I was at the AGM and in the Q&A session he mention the “More than one, less than five” comment about FPSO, so they will have been on the case for some time. Also of note is the final development will depend on the FPSO, e.g. if they secure a 50k barrels per day then that will go into the development plan, if it’s a 100k per day then that is what it will look like.
Regards
LTT
Well Sam said at the AGM, Navitas were in discussions with more than one and less than five FPOS’s, so imagine a LOI could drop anytime if they want to be on course for 2026/27!
If you look at Navitas current project in the Gulf they had secured funds long before FID so I think we will hear about LOI for the FPSO, rig and finance long before FID. IMHO
LTT
Hi Paul, I’d like to think they would put it to bed quite promptly after the hearing as they would have had all the info, there is no further course of action after that, what possible reason would they have to keep the outcome secret for a further 6-12months. If they did, ROI could accuse the tribunal of not concluding the annulment thus racking up €1.5m per month in further interest against them! I wouldn’t put it past them even if they have lost.
My feeling is they will give the result before the end of March to draw a line under things, then RKH, Harbour permitting sell the award, all or part, even keeping only 30% would be over €90m by the time interest is taken into account, plus the buyer will keep racking it up €1.5m per month. Nice little earner!
LTT
So am I right in thinking this has nothing to do with the STAY, which we should hear about that in the coming weeks/months, this is about RKH's lawyers opposing the annulment request in preparation for the tribunals decision in early January 2024.
LTT
All the more reason that Navitas and RKH need to be forging ahead. Oil and gas are going to be around for some time IMHO, they cannot just DUMP it with a click of their fingers, even if they wanted to.
News on the STAY should drop anytime, even with the go slow that the tribunal are on and particularly with the Summer hols of August looming, they have sped up a little in their communications since the award was announced, so next couple of weeks we should know.
I wonder how Navitas are doing on the rig and FPSO front? At the AGM Sam said Navitas where looking at a few, if I remember correctly he said more that one, less that five. If they are planning for first oil in 2026, then they will have to sort a LOI for both soon! The rig will be needed for at least 2 year to drill the 18 or so wells (11 pre-first oil, 7 after with the FPSO on site and oil pumping), so you can hardly walk up to a rig company and say, "I need a rig to start a week on Thursday that we will need for 2, maybe 2.5 year if we include the MOB time, got anything available?"
Can't recall the timing of the last drilling campaign but it must be 6 to 12 months prior drilling to sign it up. So if we work backwards from mid 2026 for first oil; 16 months of drilling to get the 11 wells in give or take, 2 months MOB to get on site depending on where the rig is coming from. This means you are looking at the rig tootling down there for early 2025 which would be Summer time in the Falkland's. Wishful thinking would say they would want it there for the start of Spring to get the best window of opportunity, so kick off could be Oct/Nov 2024!
As I say, wishful thinking and a lot can happen between now and then. Think someone mentioned if Shenandoah had setbacks there it would have a knock on effect to Sealion. But to be honest, I cannot see that, maybe I'm being naive or stupid, but if Sealion was totally dependant on Shenandoah, why would Gideon have gone down to the Falklands and said 2026 for first oil, surely he would have mentioned 2027/28 as the prime time as the oil income from Shenandoah would pay for Sealion's development.
By the way, if anyone is interested Ian Ramsay has a page on the Navitas website, probably been there a while but it's the first time I have seen it.
LTT
Don’t think people realise the ICSID is not just about oil companies taking States to court, it works both ways, a Green energy company investing in Italy for example, planning to build wind farms off the coast then they pull the plug for whatever reason, they could be sued by Italy for walking away.
There will be a lack of big investment projects going forward because companies will be thinking twice about investing in the EU if they pull out of ETC.
LTT
Totally agree. Navitas are completely different from PMO who kept promising this and promising that, then the timeline would get knocked back once again.
I cannot imagine all these new hires over the past year, would be giving up successful and stable careers to come to Navitas if they were just going through the motions! Ian Ramsey would feel a right numpty moving across and bringing a few further Murphy bods with him if Nav were just having a laugh!
I think baring some black swan event, it is now just a matter of when, not if Sea Lion starts pumping oil in the Falkland’s.
I just need to be able to hold on to as many of my shares as possible until then! Oh and Sam et All need to not sell out or get taken out prior to that time.
LTT