The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
Hi Paul, yes I have to agree, doesn't read like it’s from Garbled/M-D, seems like it was written by someone else and he’s copy pasted it.
I seem to recall when they went by the moniker Garbled they had some contact down in the FI’s who used to feed them info. So I think it’s right to take it with a pinch of salt, even though it does like the sort of thing Gideon would say, he is a powerful speaker and exudes confidence.
The only thing is, surely we have other Falkland Islanders who own shares and read and post on these boards, so why has no one else added comment or given their take on the presentation? If the venue was packed out with chairs being brought in, somebody else who is on this BB must have something to add!
Or are they getting orders filled at the current lows before the news breaks! ;-)
So the jury's out for the moment, but all sounds plausible. But maybe too much wishful thinking!
LTT
Rookie, I’d have to agree, a back down 70% and a line drown under $85 per barrel, anything above get gets the levy, anything below and the higher rate goes, back above the the rate kicks in.
It would be common sense but it seems common sense is as rare as Rocking Horse******!
Hopefully Linda will show a new direction for the company otherwise shareholders will leave in their droves !
Regards LTT
Well I can’t imagine they are “ Going there and back to see how far it is!” as my Dad use to say.
The fact Gideon is going makes me think they are not messing around, no reason to travel all that way for just a cuppa and a chat, they can Zoom or use Meets if it was for that. No they must be there to iron out a few details with Gideon going, showing his and the companies commitment.
Are the ducks FINALLY lining up???????
LTT
So is the MOU it get everyone on the same page before getting around the table and signing off on things right?
So they could or maybe more importantly SHOULD be discussing the tax regime and royalties among other things, as Navitas won’t be able to entice investors in with a 5 year return on capital if things change and FIG put up the royalty or Tax rate if oil goes to $100 per barrel. Also they will want some assurances that if oil drops to $50 per barrel maybe there is flexibility to cut the royalty to keep oil pumping.
Interesting times are ahead me thinks, despite the lack of direct news, there has been a lot going on the background, in fact far more than PMO did in there 7 or was it 8 years of being operator.
Hoping to be cashing in my warrants for double or maybe triple the cash price by the end of this year with a fair wind picking up behind Navitas. Fingers crossed.
LTT
I know the drill cost 11m but with the new GOV tax rules on exploration, don’t they get back something like 92p of each £1 spent or have I got it totally wrong?
Many thanks
LTT
Seems like Shell and Deltic still have a lid on this, quite amazing really! We should hear something this week or next hopefully.
It’s a flip of a coin as to commercial or not, wonder what the share price will do if it is commercial? Could we double from here? Fingers crossed. Good luck all.
LTT
Shell and Deltic must be running a tight ship as we are getting close now, news could drop any day, however there is no real trading of any note going on.
Can't guess which way it's going to go, I am airing to the side of a positive result but that is purely based on the idea that they wouldn't spend all this time doing a full well test if it was borderline from the out set, but stranger things have happened at sea!
Interesting times are ahead.
LTT
Well if nothing else it seems to be moving along, compared the award proceeding it’s fair galloping!
Fingers crossed. LTT
But Krakenoil,
how are they going to sustain the dividend, yes it would be great at the start, but how are they going to step up production? or even keep it level for that matter. They have declining assets. This is why the share price is stuck at these levels IMHO, without a show of direction from Linda, they will stay here.
Regards LTT
Going forward under the current EPL, there is no insentive to buy producing assets in the NS (which was basically Harbours business model). Due to the high tax rate on profits, it would be stupid to buy producing assets that will be taxed at the same high rate even if the oil price drops back to the $70's.
Infill drilling is worth while due to the high tax relief on the drilling costs, but with no guarantees that if a Labour Gov comes in and takes away that tax relief, Harbour could be sat with stranded assets in the NS that are not viable to drill, even though they are sitting on the doorstep with infrastructure near by!
I know it's a bit of a basic way to look at it, but have I got the gist of it? I can't see a picture in my head of what Linda is going to do next. She walked from the Falklands, she let Brazil go, Zama.......will is Zama! Where are they going to get growth from going forward? Yes they can pay down debt, yes they could increase the dividend, but many of Harbours producing assets are in their twilight, without infill drilling they will decline faster; that hits production and then they are in trouble.
I think I'm going to hang on into March, but if it's just a "We paid down debt and we are increasing the div" I am afraid I will have to say Sayonara to Harbour.
Regards LTT
But where does the growth come from, they can do infill drilling on the existing NS portfolio and tie back the low hanging fruit so to speak. However they would be paying the EPL on those profits even if oil drops back to the low $70's per barrel or God forbid the $60's! That isn't going to cut it to raise the share price, we would just be running faster and faster just to stand still!
No they need to look overseas for expansion, but where? Zama just seems like a dead duck, they have been taking about it since getting it from the PMO deal, but nothing seems to have moved on, plus there is the risk of Mexico moving the goal posts again, so I wouldn't want Linda putting more eggs in that basket. They let the Falklands go and exited the exploration licence interests in the Ceará Basin in Brazil and the Burgos Basin in Mexico.
Anyone got any ideas of where the growth will come from, as if not, Harbour are going to be hanging around 290p-340p, bouncing in-between for the forceable, which turns out to be a nice little earner, but not really what I was hoping for when I bought in.
LTT
I was wondering the same as there is a big difference if they compound annually and use the annual Euribor rate.
By the way thanks for the link as always Mogger.
LTT
I do hope you guys are right, I’d love to get 25p/50p per share, and on paper we should get it and more, but why hasn’t there been anyone hammering on the door, we have had the high oil and gas prices for some time now, why hadn’t anyone farmed in/made an offer? Why haven’t we got a line of bankers outside our offices with cheque books in hand?
It’s because it’s so far away, because it could be an isolated asset and because the media has so demonised the oil and gas industry that the big money players are shying away from getting involved.
How are Borders going to raise the cash on their own?
I really hope they can but don’t see where the money will come from at this present time. Payback in 2 years sounds great, but that is only after 2 or 3 years to get to FID, then drilling the wells, renting the FPSO after it’s been refitted to Darwin’s specs. So anyone stumping up the cash is not getting it back in 2 years, they are tying up cash for 3 or 4 years IMHO.
LTT
Bloo,
I think the plan is to re-inject the gas to support production, as you say FIG don't want a LNG plant on the islands so they will just lift the condensate and any gas will go back in. I think thats the issue with the gas in the northern basin, Johnson could be quite a large gas discovery but a gas to liquids floater (I think shell one or two) however you would need a HUGE gas field to make it viable, hence nobody is bothered about the gas down there.
LTT
Hi gus0,
I’m afraid that payment had long gone, plus it doesn’t count as PMO who paid it watered down the carry, charged RKH for there share of costs, then PMO got taken over by Harbour who walked away, giving back 100% of Sea Lion back to RKH. Then Navitas who were to be signing up to develop with PMO decided they still wanted in, so RKH gave them 65% for offering to stump up the cash to develop, paying all costs up to FID which RKH will pay back plus 8% (I think from memory), then they will fund, upon a successful FID, two thirds of RKH development costs that will be interest free and paid back from 85% of RKH free cash flow.
So RKH go paid nothing from Navitas, only a promise to find the cash to get SL up and running.
So what will someone offer Borders? A similar deal? But I can’t see Brimacombe waiting in the wings for such an offer that will take years to come good. I do hope I am wrong, but my only reason for being in here is for the possibility of a takeover/buyout. 10p would be very nice thank you.
Regards LTT
Hope you're right PageofCups, but can see Mr Brimacombe as being in this for the quick buck, he is not going to hang around 3 to 5 years until production if we are lucky. Plus the share dilution if a partner farms in and we need to pay our share of costs. Look at RKH, they have had to give away 65% of their Northern acreage to get someone to loan them them money that they will ultimately have to pay back out of revenues! How can Borders expect a better deal than that?
No I feel we are going to be taken out, it's just at what price.
LTT
How many would take an offer of 8p to 10p a share? I know it's worth far more than that, the new investors presentation clearly show, even if they are a little optimistic on the rig costs! But even if we double the rig costs, the payback it still extremely quick.
However who will take the risk? No major is interested for a start, even Harbour with all their cash, (well not quite as much these days thanks to the EPL) walked away from the Falklands with an oven ready Sea Lion on a plate. RKH has some adjacent acreage in the Southern basin with lookalike prospects, and may have been tempted to rig share with Borders, however they need to get Sea Lion over the line first which is at least 12 months or more to FID. Even if RKH got the OM award tomorrow, they would be more likely to make an offer for Borders rather than go into partnership to develop IMHO. Then way down the line when Sea Lion is a producing cash cow, bundle the whole southern acreage together and get a farm-in for the whole shooting match as there will be Darwin as the hook to start the ball rolling.
Don't get me wrong, I'd love Borders to get a heavyweight partner in, or get taken out for 25p/50p a share, but my thinking is, if someone offered 8p-10p in the current climate, the board and the large shareholders would take it, a 100% to 200% return is nothing to be sneezed at, better now rather than waiting 2 or 3 years to get to a FID IF someone farmed in tomorrow! IMHO
Good luck to us all.
LTT
"B&S aims to attract partners to provide the funding to take the project AWAY" , more than likely, with a market cap of 18m why would anyone farm in, why not buy the whole thing? I know you could say the same about RKH, but with the OM funds in the wings any bid would cost a good deal more than the currant share price.
Basically IMHO there is no-one with cash to do it, the big players don't want the hassel, the smaller players don't have cash flow and the mid caps are afraid to invest and probably couldn't get the cash from the banks to fund it. Borders and between a rock and a hard place for sure.
Don't get me wrong, I have a few Borders just in case, but still find it hard to see where the money will come from. Once RKH and Navitas reach FID and the rig is on the way down to drill, then people will start to take notice, but until then, i'm not so hopeful. Plus the independent report seems a bit light on the details. $200m for drilling 3 wells without a rig share seems very optimistic to say the least. Also why would RKH and Navitas get a much higher spec rig than necessary to share rig costs with Borders, it's one thing to take higher rates on the chin when doing some appraisal and exploration drilling, it's another when you have 10+ production and injector wells to drill for development.
As for Argos, well what can I say! Could Borders end up in the same situation.
LTT
Thanks Exploration.
Fingers crossed the flow test goes smoothly and the results are good.
LTT
Dear Exploration, first and foremost I would like to say thank you for your insight and sharing of information, it really helps us non oilies get an handle on what is going on and helps with further research to make better informed decisions as to buy/sell/hold.
If I may ask for further support with my understanding, I would like to ask something that was asked further back in the various chats that may have got drowned out with the "Duster" chats and so on.
Can they make a judgement from the wireline as to whether it's worth running a well test or not? I suppose what I am getting at is, they have gas, more than just shows I imagine, so they have run a wireline and it shows properties of the formation. What would the criteria be that would mean they decide to do a production test or not? If they had only shows they wouldn't waste money on a 30day well test just for the sake of it right? Of course they are doing the production test to see how the reservoir preforms and nothing is certain, but what would the cut off me as to the do/don't, hence why I am trying to get my head around the situation.
Regards LTT