Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Hi Nastynick,
I wouldn’t hold your breath! The statement says;
“Should completion not occur by 30.6.24. either side has the right to termination.”
That says to me either the funder or RKH have a get out clause, but doesn’t imply they will use it, in theory we could go past that date and wait until the OM annulment result drops and still be waiting for FIG to sign off on the deal. Cannot understand what they are playing at stringing RKH along. Paying off the lawyers and the litigation funders and having €15m in the bank would help RKH no end, with the promise of a possible €65m should OM rule in our favor.
Can’t understand it at all to be honest.
LTT
Alma,
No point sending Gideon an email or trying to call, it's Passover so he will be not allowed to use a phone, computer, check email or anything of the like, well not until after the 30th of April anyway.
Regards LTT
Thanks for the clarification DeusExMachina, I thought I was looking at it the wrong way, I'll get my coat!
;-)
LTT
Hi SpaceHoppa, AlmaCogan,
I hadn't seen that either, it makes sense to use UKCS petroleum legislation topped and tailed with a FIG stamp.
However, just got a bit of a shock when i clicked the "PRODUCTION LICENCE_STATUS - 24 Oct" 2023 link, there seems to be quite a few errors on the link or maybe I am just reading it wrong, but when is says Desire Petroleum holding 32% and 30%, RKH holds 5%/3% and that; "Navitas Petroleum Development and Production Limited was formerly Premier Oil Exploration And Production Limited". I am wondering who is in charge of making these documents!
LTT
Probably seeing it in context is more helpful;
"7.6 One of the high priority projects is the Offshore Minerals project, which is not yet planned or quantified. That project is likely to take several years to complete.
7.7 Putting that aside, if the prioritisation above were effective, it might reasonably be expected to result in completion of legislative drafting for both essential and high priority projects in 2024/25 (and that legislation might be passed before adjournment of the Assembly in 2025). It might be possible for work on some, but not all, medium priorities to be undertaken."
So my take on things is, if they don't prioritise then it might take several years, but if they do, then it could be sorted in 2024/25. Still it doesn't get around the fact, WHAT HAVE FIG BEEN DOING FOR THE PAST 14 YEAR!!!!!!!!!!
It's not like they didn't know this was coming, PMO were planning FID in 2016/17/20, etc, what have they been playing at. Navitas have been getting on with this, hiring here, there and everywhere, building teams of people, did FIG think they were just going through the motions! Having a laugh!
Too right the FIG should prioritise oil readiness, in the last part of the document Mogger kindly posted the link to, it says;
5. Oil readiness legislation (including Oil Pollution Preparedness, Response and Co-operation Regs and Petroleum Valuation)--------- Significant economic driver
7. Stanley Common Regs (use of Stanley Airport by oil industry)--------- Significant economic driver
The bywords are "Significant economic driver", so if FIG really wants the oil revenue they need to spend now and get the right people, or teams on the case to get things done. Anything can be done if you really want it, outsource the expertise if necessary, it will pay dividends, HUGE dividends to the Falklands population in the future and more importantly it will secure their future. But it needs sorting, you cannot have Navitas running at full speed and FIG are still in the blocks, no, not in the blocks, sat on the bench, still tying the laces on their Nike's!
Sorry, that's enough ranting for a Friday evening. Have a good weekend all.
LTT
Hope you are right Happy, if OM gets signed off I don’t see why not as it would see us with enough cash in the bank to see us to first oil without dilution.
If the annulment rules in our favor then I could see 25p+ and that is with Navitas not saying anything. If the announce a partner or funding or both, all bets are off and I would say we should be 30p+ and even then we would be well undervalued considering FID would be a done deal! Fingers crossed.
LTT
Well that knocks Equinox off the list of farm-in partners and probably Valaris off the list also! Plus the basin they are drilling is approx 800km to 1000km to the north of Sea Lion, it's unlikely they are in communication!!!!
;-)
But then we wouldn't need a drillship anyway, it would be overkill for the pretty simple development drilling we need, 35days to 45days per well.
Saying that, I am sure I read/heard somewhere what a drillship, although expensive on the day rate, did have some cost savings over a semisubmersible. Basically because it can move around under it's own steam, thus not needing the support vessels a semisubmersible would.
It would also be advantageous if Navitas wanted to take a share in Darwin and wanted to nip down there and do a couple of appraisals during down time! It might also suit having a higher spec'd rig to drill Isobel as from memory it was higher pressure.
I suppose it depends on how the numbers stack up, a drill ship tootling across for South Africa rather than a semi being brought from further away, with tugs, moving at a much slower pace; a drillship being able to manoeuvre itself and drill faster and then head off after 11 wells, (or 14 if you could one on Isoble and a couple on Darwin).
Probably just me daydreaming again, but stranger things have happened at sea!
LTT
R1234,
It doesn’t say much of anything except that he has been rehired to head up a different organisation based in Geneva, Switzerland.
Nothing about relaxing Argentina’s stance on the Falklands I’m afraid.
LTT
It’s a good sign, but a little misleading as the ambassador has been brought on to do a new roll, nothing to do with the Falklands. They are just rehashing the controversy surrounding the previous deal that was torn up.
LTT
"CAPITAL GAINS TAX
In December 2013, Rockhopper announced that it had reached
an agreement in principle with the Falkland Islands
Government (“FIG”) regarding the timing and quantum of the
Capital Gains Tax (“CGT”) liability due as a result of its farm out
to Premier Oil of a 60% equity interest in its Sea Lion discovery.
The parties agreed in principle that the total CGT payable is
£90 million with payment split into two tranches. The first
payment, equating to £26 million (approximately $41 million),
has now been satisfied. The second payment equates to
£64 million (approximately $107 million) and will now be paid
at the same time as the first royalty payment to FIG from oil
production at Sea Lion.
Constructive discussions continue with FIG to document the
above agreement in principle."
Gosh, they were talking about reaching project sanction in 2015 !!!!!!
LTT
Does anyone know when the EIS is out in the public domain for public consultation?
I am pretty sure Mogger will be on this when it drops, but can’t recall how long between submission and being put out for public consultation. I think from memory there was 42 days for any feedback!
LTT
To be honest I thought monetisation meant, to turn it into money, which would imply a sale of the whole shooting match, but that is just on interpretation.
I think the mention of a rig coming from Nambia makes sense, but even so the mob costs would still be big for a high spec deep water rig. Navitas/RKH wouldn’t want to share an overspec’d rig, the higher day rate on their development drilling would knock their budget well over!
So either we need a sale or a partner with deep pockets, as the $200m budget for the rig seems a bit on the light / optimistic side to me.
Finger crossed something happens soon.
LTT
Hope not Ralph, things are moving forward even if Navitas are not shouting about it, but you a right, someone could come in and make a lowball offer and get the whole shooting match.
I suppose the only thing stopping anyone at the moment is the OM award cash isn’t signed off yet and there is a remote possibility that it will gets partly annulled, then even if we get the whole 80m Euros a good percentage of that could possibly be ring fenced for tax to FIG. Even then Navitas could push FID back and then first oil to 2027/8.
So that is why the share price is where it is, no one wants to takeover now, then find out they have purchased a lemon! Once funding/FID/Partner are on board, that would be the time we become a takeover target, if the share price is still languishing around 15-20p after all that, then someone will start sniffing around for sure.
I wouldn’t be happy, but as I am above my breakeven purchase price I would be ok with 25-30p per share, but I’d much rather see 60p to £1 in a couple of years.
LTT
Hi Ralph,
Suppose that proves Chess’s point in a way, because of a lack of interest in AIM and low valuations, it makes sense, bigger players who see value swoop in and take them for a song.
Fo what’s it worth I can see all oilies going this way over the coming decades, as more people shun oil and gas, investors walk away and banks won’t lend, even though they are flying , buying and consuming things provided by oil!
If RKH is not valued properly once oil starts to flow, it will be snapped up, if not before.
LTT
Hi Paul,
yes it's over two days, today and tomorrow. I emailed RKH about when it was taking place in April. Always get a prompt reply.
Another thing ticked off the list, no more messing about with lawyers and OM after this, it can be put to bed either way and RKH can be ready for the main event, hopefully with cash in the bank to cover their share of costs on FID.
Then onwards and upwards.
LTT
This is it, the Annulment hearing will be in full swing now. Sam and the new CFO will be in the courtroom (well if it is a courtroom, could be a private office for all I know) with their lawyers and ROI lawyers putting their cases.
Although in all honesty I am unsure what actually happens in such a hearing. I would presume all the information has already been supplied and thus they are just getting statements and doing summing ups. Not calling up a last minute star witness who has come forward with new, damning insight!!!!!! Mind you, I wouldn't put is past ROI to try it on, that's if they can be bothered to turn up to the hearing in the first place.
Either way, the die will be cast tomorrow end of play, then we will just have to wait around 3-9months for the decision.
In a perfect would, FIG sign off on the selling of the OM award next month and then amazingly news of the annulment going in our favour comes pretty quickly after that, thus us being 80m euros richer. Hopefully afterwards, Navitas then announce FID, maybe in Sept/Oct and we have our share in the bank and no fund raise necessary! Talk about the ducks lining up ;-)
Regards
LTT
Oilbrat too said no oil field if found in isolation, just look at the NS. Oilbrat said there would be billions of barrels there, we just need the first one up and running! How right he was with Navitas working the numbers on Sea Lion it will be getting close to 1 Billion recoverable once all the satellite exploration is included. That’s without looking at Isobel.
I think Navitas will most likely drill a few explorations while they are drilling the development wells, it would be rude not to!
LTT
Love your optimism Pages, but if there really was something in the wind about the deal you mention, wouldn't people be buying? Wouldn't they be filling their boots in the knowledge that this would be double, treble or more on an announcement? I would, I wouldn't be fishing around I'd be buying as many as I could up to 3.5 or 4.5, even 5p per share as any such deal where Borders partners Navitas and RKH and gets a slice of Sea Lion would be well worth it!
I think it's currently and chicken and egg situation, they haven't been able to get money for Darwin development so how can they get money to partner Navitas and RKH. Once Navitas hits the FID button and/or says where funding is coming from, then Darwin becomes more valuable, but no before.
Darwin is still a stranded asset until there are boots on the ground, just look at RKH, languishing around 13p per share with OM award sold although awaiting FIG approval, with a possible 80M euros to be banked by year end which is around RKH current market cap. So RKH 35% of Sea Lion and Navitas deal is valued at NOTHING. Sam Moody couldn't raise cash now even with a partner who is planning ahead and asking for tenders for accommodation in the Falklands and a site for equipment storage and mud for drilling. They want this ready for the 2nd and 3rd Q 2025. Even so with all the news about what they are doing, Navitas have said nothing much about a partner/funding/FIG apart from "FID is planned for end of 2024". So how could Darwin raise some cash?
Don't get me wrong I would love you to be right and things plough forward, but I just cannot see it at the moment.
Regards LTT a hopeful shareholder.
SpacesHoppa,
I also like this bit;
“a) Very soon an international supplier will be contracted by Navitas to supply liquid muds and fluids in volume for the soon development of the offshore drilling campaigns. The chosen contractor, in response to this requirement, will be in charge of preparing the area that he considers for his specialty. The supplier of liquid sludge and fluid volumes will be the supplier of its own mixing and storage tanks, and will develop its own network of pipes.
b)Navitas has an area assigned for this requirement. This is the area close to the entrance to the Temporary Port Mooring Access Facility. The person contracted for this requirement will develop the land space from its current state to a concrete platform capable of supporting all the corresponding tanks and offices. The area must be connected to local services, partially linked to the dock, fully fenced, have a storage shed and office space for about six people. A security checkpoint and availability to park vehicles.
c) Said area must be ready for delivery, fully in condition and prepared for the international supplier towards the second quarter of 2025.”
It seems like Navitas are just getting on with things below the radar, they are quietly sorting things without rubbing it In Argentina’s face. Makes a lot of sense really, why announce every move and risk Argentina spitting the dummy. Quietly, quietly catch the monkey seems to be the road Navitas are on.
LTT
Has anyone got any idea of when the April hearing is? I seem to recall due to illness the hearing was pushed back to April, but cannot recall a new date being mentioned!
Seems like everything is waiting until after the 5th of April !
LTT