Member Info for longtermthinker

But Space, I don’t mind it getting to 59p by the 29th of Jan obviously 😉 That way I can cancel out the pint I owe you at the AGM! 🫣

No worries, even if it’s 40p at the AGM it will be my pleasure to buy you a pint 😊 However I’m hoping to attend the AGM with FID in the bag. 👍

LTT

Hi Ash, don’t think they need to RNS anything, if it had shot up from 14p to almost 40p in a day, then possibly, but as we have had a steady rise of 3% here, 2% there, then a dip day, then another 2% etc, it’s just a re rate to some semblance of value reflecting the possible future of the OM award dropping anytime and Navitas possibly going for FID in the middle of 2025🤔

No other reason I can tell.

LTT

Totally agree, even moving up like Navitas, 100% per year to first oil. That would mean £1.20 at first oil, so anyone buying now could triple their money if they wait till 2027. Of course a multitude of things can happen between now and then, so herein lies the risk. 🤔 Buy now and take on that risk, but reap 3 times you money back, or wait till funding, FID, the FPSO going into refit and the rig is booked, but pay 60p/70p 🤔

The Big players will wait, they don’t mind paying more for more certainty, and that gives up PI’s an advantage, but we have to accept the risks. “You may get back less than your initial investment”

LTT

Hi gus0,

It’s not crazy at all, just look at RKH, during covid you could have bought a 4,5,6p a share and look at them now, touch 40p!!!!!!

All we need it a good partner and a free carry on appraisal and exploration, we will be past 10p in a blink and I will rethink my strategy.

LTT

Hope you are right gus0, after our initial burst from 2.5p to 3.5p we seem to be treading water🤔 I’m looking for 10p then I will sell half my holding and let the rest ride for partner or takeover. Then again 10p might be the takeover offer so may have no choice. I hope not though. Either way, if there is a takeover, hopefully I can then move the cash into the company that bought Borders, that way I keep some skin in the game.

LTT

Hate to say this MD, but PMO bought into Sea Lion, they did stuff with it and it still amounted to zero!

I think the old Argos acreage will have its day back in the sun, but no wild catting until after Isobel IMHO. It makes sense to drill and appraise Isobel next, then maybe head down to Darwin with the higher spec’d rig needed for Isobel to appraise there and work up a development plan.

Then after all that, maybe look further north, but I’m afraid, not before lower hanging fruit has been picked.

LTT

Ralph, I’ll happily take 100% gain each year, up to first oil from this level. I’d like to see it a good bit higher than £1.05 at first oil, but if that’s all it is, I’ll be one happy chappy.

However I see that as quite a low expectation if I partner comes in paying $3 a barrel to take a stake! But as you say, it will fly once the II’s start getting involved 👍

LTT

Yes Paul, I think Vendor Finance could come in to the tune of $400m to $500m+. It's not just the EPL that's the issue, it's the no new licencing rounds that have put the last nail in the coffin. I read on another BB that Norway has just offered up new oil and gas license.

"Norway Offers 53 Oil and Gas Licenses to 20 Firms

The Norwegian Ministry of Energy has offered 53 new production licenses on the Norwegian continental shelf in the APA 2024 licensing round to a total of 20 companies."

How can anyone working in the UK's North Sea industry see any future? They are being backed into a corner and they are either heading to Norway or looking further afield. Now where is there a new oil and gas industry setting up with a great fiscal regime and a long, long, long term future? There will be vendors chomping at the bit to get in on the ground floor with Navitas and RKH.

LTT

Hi Paul,

And let’s not forget, PMO were buying into a much smaller field, now we are looking at 3 phases with 900m+ recoverable with Isobel waiting in the wings that could be as large, if not larger that Sea Lion!

As you say, if a partner comes in and pays $3+ a barrel for an oven ready development it would draw a line under the value for RKH. Surely any partner coming in wouldn’t get a 900m barrel development opportunity for stumping up only their share of development costs! 🤔

No, Navitas has been commissioning the resource upgrades for a reason and that could be enticing and partners as well as for funding. IMHO

Looking forward to OM and a re rate.

LTT

Cheers Topdrive,

That makes a lot of sense.

LTT

Surprised there hasn’t been a bit more chat about the big news today! The Aoka Mizu finally being officially linked to the Sea Lion development and Navitas.

I could be wrong, but this appears to be the first time it’s been mentioned that the FPSO is ours! There has been lots of rumor, and hearsay and Upstream have eluded to the Aoka Mizu being the one, but now it’s out officially. Am I right in thinking that or am I missing something? 🤔

Incidentally, what does a “Fast track front end engineering & design (feed)” actually mean, rather than a “Standard track”? Seems like Chess was well off the mark with his “years of contracts and negotiations”. But then we all have our good days and bad! but at the moment we seemed to be having the good days 👍😊

LTT

Hi Topdrive, remember you well from the iii days.

It was said with a tongue in cheek, but it could have some traction! I thought the same as you, it being not in Navitas’ remit of securing assets that are way, way down the line with appraisals and 100’s of millions spent.

However, having recently read about Navitas’ aim to remain as operator and bring in a partner, I’m thinking differently. Maybe Navitas are wanting to up their game and not be told when to jump, and how high by Beacon in the gulf. The have an excellent team headed by Ian Ramsey, and I imagine he would have some insight into Borders even though Rocky is his first love.

As Joost says, would Navitas want to compete with another player, when they could take out Borders now and do everything at their own pace, be it fast or slow! 🤔

Either way, it’s all very exciting, RKH not only making, but holding onto 5 year highs.

LTT

JBER, Navitas shouldn't have to issue $1.1b in bonds. They will most likely secured vendor finance to the tune of $300m to $400m as PMO had done previously. I can't imagine much has changed since them to reduce Vendor finance interest, if anything, i'd think they'd would be more keen to get onboard with the North Sea fading away and with almost a Billion barrels to develop and then some. Anyone getting involved at this early stage could secure contracts for the next 30+ years.

If a partner comes in also for 25%, there is even less to raise in bonds. So it's all good in my books.

KR

LTT

Maybe they are borrowing cash to make an offer for Borders, tie up the loose end there, then RKH give up 65% of their southern acreage for getting 35% for Borders (adding some RKH shares for Borders share holders), then any partner coming in and get say 25% of North and South. Win, win.

;-)

Well one can but dream. LOL

LTT

Bpool, I was thinking the same. Prax had just got into Upstream with Hurricane and now they are giving it up shortly (well hopefully shortly!). It could be a good fit, even if they took 10% or just did a deal too, as you say sign a take off contract. They have the shipping and refinery and the end customers, why not!

Still lots of moving parts at the moment, something has to give soon.

LTT

Morning Bpool53,

The last info I read about Prax and Lancaster was that they envisaged production to be economical until late 2025, at which point due to the high water cut the field would become uneconomical. High oil prices might extend that a little, but the current high oil price will probably be short lived as the Trump mandate is Drill baby Drill!

So if Prax released the Aoka Mizu back end of 2025/early 26 would they have enough time, 18months to refit the Aoka for Sea Lion?🤔 Also they will have to book in the Aoka, I cannot imagine Prax will keep it pumping then release it and then Navitas are scrambling around for somewhere to do the upgrade/refit. No there has to be a plan and timeline everyone is working to, this could be one of the reasons first oil has been pushed back to late 2027.

So possible scenario is, Navitas FID June 2025, they sign contract with Bluewater for the Aoka Mizu and Blue give 6 months notice to release the Aoka. After all Prax negotiated a reduced rate, so Bluewater will want to get out of that and get the Aoka on a long term 5-25 year contract IMHO.

LTT

Hi gus0,

yes Darwin West and getting the edge of Stewart would be great, it could prove up 1b barrels+ and more in one go. Now that would be a great result.

LTT

Thanks Space,

and that's without Isobel in the mix which would be a whopper! As big if not bigger than Sea Lion, so those numbers could double and then some! However, giving up 5% would be crazy at this point in the game, unless there was a BIG sweetener. For example, if say Murphy came in for 30% RKH keep 30% and Navitas have 40%, but Murphy pay their share and carry RKH and Navitas on an exploration/appraisal campaign on Isobel PRIOR to development drilling on Sea Lion, so late 2025/early2026, then I could stomach the reduction in percentage, but it would have to be something like that. RKH are pretty soon going to be able to fund their share taking up Navitas’ loans, I can see no reason for them to give up 5% of everything when Navitas could able to fund this from cashflow from later this year!

Buffit, with regards to a take over of RKH, I think it will come, Sam and the board will no doubt get an offer at some point HOPEFULLY after first oil, that will just be too tempting to pass up. Where it will come from I am not sure and how FIG will feel about it. Would FIG be happy having a US and Israeli partnership for example without any UK involvement taking over the Falkands oil story? I suppose one scenario could be FIG setting up their own oil company and buying out RKH, thus having some say in the direction and have further profits to invest their sovereign fund!

Sam has spent many years keeping this dream alive and either way I see him stepping aside and cashing in IF we get to first oil. Personally I'd like to see Sam at the AGM in the year of first oil, I'd like to shake his hand and say thank you for clinging on by your finger nails, when many others just let go and plummeted into the abyss! Hindsight is easy for spotting where folk went wrong, but all you need is to be right once in big way and all can come good. Navitas could be that right choice.

LTT

P.S. Navitas up another 2% so far today.

Hi Buffit,

from memory I believe RKH gave up 65% of the whole North Basin acreage to align all interests, thus keeping 35% with no plan to give up more. However they kept (for now) 100% of their Southern acreage which is adjacent to Borders with look a like prospects similar to Darwin.

Hope that helps.

LTT

Ovets,

I get what you’re saying about RKH giving up 5% to get funding and maybe a partner on board, but I would vote against it. Giving away an extra 5% would have been more palatable 3 or 4 years ago when we were on our knees, but now with a few million in the bank and a guaranteed €33m to come in which would cover our share after taking up Navitas’ loans and FID on the horizon, no way!

It’s not just 5% of Sea lion which has grown immensely, it’s 5% of Isobel and everything else that could come into play. It’s not just about giving up 5% of our production from Sea Lion, it’s the whole shooting match! How many 100’m or even billions would be lost for that 5%🤔

I would be very disappointed if Sam even pitched this idea to shareholders with FID due by mid 2025, not without some big sweetener and a cherry on top!

LTT