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Chess, but they cannot secure funding until the FDP and the EIS have been approved, Navitas could have the vendor finance lined up, the Oil Trader lined up, they are just waiting on FIG to do their bit, then they can go for the bond issue to make up the slack. NOBODY will give any money to any project without a signed off FDP.

Of course they might have done the rounds with cap in hand and there have been no takers, and thus they will have to wait until Shenandoah comes online in 2025 to be in much better shape to get finance sorted. That is another scenario which we should be prepared for.

However, there is no point thinking about funding until FIG have accepted the FDP and EIS. So this idea that they are still searching for funding after 2 years because they haven't FID'd the project is not correct. IMHO

KR

LTT

And there it is, RKH have said, Simon said, Sam said, an industry insider said, but nowhere has anybody got a quote from Navitas.

Even the FPSO is all hearsay, Navitas have kept their lips firmly shut. They only thing that have said is in the July Investors presentation, where they said "FID 2024".

So we can 2nd guess all we like and take onboard what RKH are saying, but nobody knows how far down the line Navitas really are, they could be in the starters blocks, waiting for the gun of the EIS and FDP sign off or they could be in the changing rooms slipping on their Nike's. Your guess is as good as mine, but that is all it is, a guess.

I still feel if/when funding and project sanction occur, be it Q4 2024 or the first half of 2025, things will move pretty fast from that point. IMHO announcements will come pretty thick and fast are even pretty much all in one go, to limit the sabre rattling.

Have a good weekend all. And that goes out to everyone be they glass half full, half empty, totally empty or no glass at all.

LTT

Quite right buzzthomas, they use both phrases,

"Owners of large oilfield project in Falkland Islands continue search for finance"

and,

"The Navitas Petroleum-led joint venture is busy working to secure the critical financing package that will enable the Sea Lion project in the Falkland Islands to move to the construction phase."

I don't have a subscription so I have no idea about the rest of the article, just wondering why they have a HUGE picture of Simon Thomson when it would be more appropriate to have a picture of Gideon!

LTT

WOW, Aim and Finley are tag teaming it today, with Chess getting stuck in also!

Look, Navitas are hovering at historic highs, they have Shenandoah coming on stream Q2 2025, (not sure if its early or late Q2), the EIS is completed and soon to be signed off, they have asked for a letter of comfort for the FDP, they have a FPSO earmarked and contract all but signed off, they have Ian Ramsey and team chomping at the bit to get this show on the road.

Financing is what we are waiting on, but that cannot happen until the Letter of comfort on the FDP and the EIS is signed off and we know that is happening in the Exco meeting in October Q4.

I agreed, FID seems unlikely in 2024, most likely, as Sam said at the AGM, "If I were Navitas, I would wait for Shenendoah to come online in Q2 to FID".

"IF I WERE NAVITAS........"

But there in lies the rub, Sam said, not Navitas, whom in July issued an Investors presentation saying FID 2024, even though the were well aware of the delay in Shenandoah. Maybe they are being overly optimistic or naive, but I'd rather them reach for the stars and only get to the moon, than shuffle around looking at the ground saying, " What's the point, it's never going to happen, in fact we'll be lucky to get this one over the line by 2025, actually lets just knock it all on the head now!" But don't say RKH are missing deadlines again, Navitas are in the driving seat and have tied their flag to the mast. Whether they will make it, well the jury is still out, we will have to wait till the 31st of December for the back slapping "I told you it wasn't going to happen!"

So if FID doesn't happen in 2024, don't blame RKH, blame Navitas, whom should have been more realistic.

Sure it's a gamble, but that is why were are here.

LTT

Hoping Navitas announce something soon and we get a boost in the share price, then a raise to tide us over. Once boots are on the ground in the Falklands, and the reality of a development underway, we will be in a much stronger position.

I read somewhere Navitas was looking at tenders for accommodation for Q2 2025. Not sure if that is still on the cards, but if they still plan first oil for late 2026/early 2027 something will have to give soon.

It’s all getting exciting.

LTT

As always thanks Mogger, if the Aoka Mizu is our FPSO, it cuts out the years of negotiations that Chess mentioned (Not a criticism Chess, your point was valid, but this appears to put that concern to bed),

"The MoU comprise a Definition Study and FEED. Furthermore it sets out the conditions under which a contract can be concluded."

So from that, my understanding is they crossed all the T's and dotted all the i's, so once they fire the starters pistol, the contract will just need finessing, no major spanners in the works. That's great news.

LTT

Plus they said it was viable through the mid 2025 at $80 oil, as the water cut increases and the oil price drops, who says they won't let the Aoka Mizu go sooner, add on the EPL, PRAX might want rid.

Plus Prax were looking at venturing into the Upstream area with the purchase of Hurricane, I wonder where they could invest to replace the 7k barrels per day! in a much better fiscal environment, where it could leverage their shipping fleet and refineries to get the oil to market! I wonder!

Of course all the above is just my speculation and fantasy, adding two plus too and getting seven! Thinking Navitas talked of bringing in a partner who is an oil trader, but why not bring in a partner that does the whole package, trading, refining, delivery.

Either way, it seems Navitas have things well in hand.

LTT

Aim,

Where in the RNS does it imply that FID will be well into next year? I’ve read it and as you say, there is No News, or nothing new anyway!

So how can you start the thread with “No news”, then say in your next breath that FID will be delayed well into next year 🤔.

LTT

Damp, here's the proof!

Princeton University professor Burton Malkiel claimed in his bestselling book, A Random Walk Down Wall Street, that “A blindfolded monkey throwing darts at a newspaper's financial pages could select a portfolio that would do just as well as one carefully selected by experts.”

“Malkiel was wrong,” stated Rob Arnott, CEO of Research Affiliates, while speaking at the IMN Global Indexing and ETFs conference earlier this month. “The monkeys have done a much better job than both the experts and the stock market.”

Let's hope this monkey (me) picked a winner!

LTT

I concur Citizen, Navitas must have a plan. They will pretty much know how much vendor finance is in the kitty, and what the oil trading company if any, wants to put in, so they just have the bonds to raise the lions, if you’ll excuse the pun, share.

So it makes sense to get an IPA issued to protect all parties, we don’t want another ROI backtrack, but more importantly they will want something in writing that FIG won’t move the goal posts, up the royalties, increase corporate tax and the like, which would effect returns and possibly make Sea Lion a stranded asset. Look at the NS, it is becoming, if not already is un-investable. Nobody is doing anything of note whilst they wait for UKgov declare their plans at the end of Oct.

LTT

Yes MD you are right, FIG should sign off on the licenses, but not until Borders are financially solvent for another year, they will have to fund raise sooner rather than later. I think they are waiting for some move by Navitas to boost Borders share price IMHO, it would make a lot of sense to do it then. But that leaves everything in Navita's hands and they don't say much until absolutely necessary.

LTT

Good call Tincan ,

I would be in two minds also about whether to invest further in Borders with their licence extension being dependent on them having cash to be a going concern for another year. The fund raise there will have to happen sooner rather than later, how could a farm-in/ takeover happen with the spectre of being unable to get the extension, or somebody farm in and then FIG renews the license but adds the caveat that one well needs to be drilled within a year. Unlikely I know, but all the more reason to wait till Borders are in a financially stable position with the license in the bag for another year. IMHO.

Of course I would love a big player to sweep in but cannot see it happening until the above is sorted. My biggest concern is someone wants to take over the whole shooting match as happened with Argos! The Canadian could swing the vote to accept a buyout at 3.5p and he would still make a killing!

Sorry for the off topic.

LTT

“A comfort letter is a document prepared by an accounting firm assuring the financial soundness or backing of a company.[1] The comfort letter can be issued by a Certified Public Accountant declaring no indication of false or misleading information in the financial statements and that the company's prospectus follows the prevailing accounting standards. This is sometimes used in connection with an initial public offering.[2] Comfort letters are also sometimes provided by those involved in evaluating a company's assets, for instance, in the case of oil and gas companies, third-party reserve engineering firms.”

According to Wiki. It appears to be standard practice, and I recall Sam saying that the FDP would not be signed off as such, but it would be made clear that FIG accepted the FDP was a good and achievable plan. Hence the Letter of Comfort. This will allow them to go for finance.

It could all kick off from next month IMHO.

LTT

Sorry for the slightly off topic, MD why do you get the impression that Navitas will bleed RKH to death?

RKH have a loan running at 8% Pre-FID and an interest free loan for the lions share of costs for Post-FID, not payable until first oil and then it gets paid back from 85% of revenues. It’s not like the PMO days when RKH was on the hook for their share of costs no matter what PMO did, which almost DID bleed them dry!

Good luck with your strategy, but I would at least hold on to see Borders get its fund raise done so you can be confident they are a going concern for one more year and their licenses are extended for a further year.

KR

LTT

That is my number one concern! It’s not if Navitas FID, FIG sign off on the EIS and FDP, or if Navitas have got a FPSO on the hook, rig and funding in the bag!

No, my number one concern is Labour putting a spanner in the works. Of course they cannot flatly say “No” to FIG developing their oil and maybe in the future their gas, but they can tie them up in red tape and put a go slow on paperwork!

The irony is, with UKGov winding down the NS and banning new licenses, IF Sea Lion gets the go ahead and Navitas weighs in to the whole region, drilling Isobel and no doubt other prospects. In a blink of an eye, FIG are going to be taking in the cash and will overtake revenues from the NS. For a population of what is it, 3500! Crazy

LTT

Hi Buffit,

I took it to mean 110m times 2, is 220m, then it would be plus any lawyer costs to get the ROI to pay up, say another 10m, so anything they receive that is over 240m we get 20%.

Not sure what the tally is at the minute with interest stacking up. In September 2022 RKH requested a payment from ROI of 247m euros (190m plus award interest). I think from memory, that interest is running at 4% plus Libor so doing the maths would add another, just roughly, 20m. So we could, at this this moment in time, if the annulment ruled in our favor and ROI decided to pay up by the end of the month, be in the frame for an extra 5-7m (depending on how you work out the 4% plus Libor).

Not to be sneezed at, but then, if might drags on for another 1 year until they get paid, our 20% will increase further. The great thing is, we will have the 65m in the bank and hopefully have FID on Sea Lion by then, so the 20% will just be a nice Brucie Bonus.

LTT

Daikihaku1,

the short answer is yes, the deal is for 45m (of which we kept approx 15m after paying of the lawyers and funders), the next amount is for 65m Euros if the annulment goes in our favour, and that would get deposited in our account once the outcome is finalised. Then we still have some skin in the games should the buyers of our award take another year or so to get Italy to pay up, as the interest will still keep building. See below;

">Tranche 3 – Potential payment of 20% on recovery of amounts in excess of 200% of the Specialist Fund’s total investment including costs."

Hop that helps.

LTT

Hi JEBR,

just to recap, the next step after the submission of costs is the closing of the case? then there will be the decision right?

So was the deadline for the submission of costs by the 9th of Sept. Hopefully they will pull their finger out and get this put to bed, they have taken long enough now to deliberate. Once costs have been put in, the proceedings should close pretty quick as the verdict would have been set. It's not like the costs would have an effect on the outcome of the case is it!

Sorry, I'm just getting a little impatient now. Things need to move on and Navitas needs to get to FID before the winds of change set in further. I just got a petition sent from a friend, "Make Polluters Pay", all about New York taking big oil to court over climate change. We are using oil and gas to heat our homes, get around, grow food, it's in the clothes that we wear, the keyboard I am tapping at; it powers the servers that support this website, the list is endless. Taking big oil to court will cause the demise of oil and gas more quickly, but we are ill prepared to pick up the slack! Crazy times.

LTT

All is seeming positive, good to hear of the changes and the outlook and positive noises from the industry, but the elephants in the room are the license extension and the cash in hand. They have to go hand in hand, one cannot happen without the other. IMHO

I would imagine FIG won’t allow the license extension without proof of cash to carry them through the year of the license, therefore they will have to fund raise sooner rather than later. Hopefully they can raise on the back of some positive news re farm out or on some news from Navitas such as the signing off on the EIS or funding !

Good luck to us all

Regards LTT

Aim,

I think everyone who is interested in RKH has got their fill and are not prepared to add anything further, others are not interested as they have heard it all before, and finally there are those who are sitting on the sidelines, watching and waiting for a move, then they will pile in. IMHO

Why would anyone buy now, when they can watch and wait and see what happens. The bigger players will happily buy in once the FID is signed off and the FPSO and Rig are booked. Ok, they will pay more, maybe 20p+ a share, but in the scheme of things if RKH then follows the same trajectory as Navitas, tripling as they reach first oil, then it would be a no brainer to get in at 20p. Those of us already invested will then be faced with the dilemma of when to sell part/half/all our shares!

I liken this moment in time to the spudding of the Sea Iion well. People bought in on the dream and were rewarded (if they managed to sell at the highs). They waited for the drill bit to reach target depth and then the RNS came and BOOM! Those of us who bought into the dream pre-rig and spud, made the biggest gains, because we were prepared to take the risk. Those who bought in afterwards, who chased the share higher, made some money too, but the risks became higher and their gains were smaller. Then there was the PMO deal and well the rest is history. But now we have Navitas onboard, hopefully things will be different, they have submitted the revised EIS to FIG that might come up in the next Exco meeting that is next week, and requested a "Letter of Comfort" with regards the FDP, so they can hand the hat around for cash, this all seems very promising. But we will have to wait and see.

Maybe there won't be such a big boom this time, but as the media gets behind this, there will be many on the sidelines buying this share, it might be a slow burn, but as the rig sets sail and the FPSO gets contracted and heads off for refit, there will be further news and buying.

Of course there will be selling along the way, but the trend should be upwards as per Navitas.

Hope that helps Aim.

LTT