Member Info for longtermthinker

Also of note is Navitas are now within spitting distance of hitting a new all time high with their share price. That has to bode well for the funding of Sea Lion.

LTT

It will be fine for Navitas, I believe their break even costs are much lower because they have no back costs , appraisals, etc to consider, over $1b all told. Plus they are in a low tax, low royalty environment so every barrel produced it worth much more than elsewhere.

A drop to $50 for 3 or 6 months next year or even the year after makes no difference to Navitas, they will be looking 3, 5, 10years down the line.

Not so good for the North Sea though. If the EPL kicks in without being diluted down and oil drops below $70 a barrel, but not for long enough for the EPL to be cancelled ( hasn’t it got to be under $70 for a continuous period of 6 months otherwise it stays 🤔). The North Sea will become un-investable that’s for sure.

Hopefully the Labour Gov will go with the Norway model, not just say it’s similar ( when it’s actually not) but embrace it. It would make a lot of sense because why would anyone invest in the NS were no new licenses will be issued and the EPL is in force, when you can invest in Norway and actually make a profit!

Crazy. LTT

Dezzab,

I think you will make a tidy profit if you got your average down to 15p, well done you.

I think closing of Funding and FID will be a bit of a wake up call, particularly if OM comes in during the next couple of months, then funding and FID close at the same time be it December or Jan/Feb 2025.

In the current climate we won’t get the BOOM we were hoping for, but I could easily see 20-30p. Then as contracts go from LOI to “Rig contracted, FPSO contracted, FPSO heading for refit,” and so on and so forth plus the media rustling up headlines such as, “Falklands oil rush finally on!” “Falklands islanders to become richer than Saudi!” “ Falklands Oil finally comes home!” Who knows we could see 50p + at first oil. We shouldn’t underestimate the power the media frenzy will have.

Good luck

LTT

Navitas has stated they will get funding by a mix of vendor finance, bonds and maybe an oil trading company, maybe even a third player coming onboard prior to FID. Once you start cutting it up into manageable chunks, it’s $300m here, $400m there it will be doable.

You cannot tell me, they are steaming ahead with everything then Gideon, slaps his hand to his forehead and exclaims “ I forgot about the funding!?!?!?!?!”

LTT

Aiminvestor,

The EIS needs to be signed off, which won't be long as the public consultation and the follow up period comes to an end today. Once the EIS is accepted/sign off and the FDP gets accepted as being a good and executable plan (this could be what the letter of comfort signifies), then Navitas can start passing the hat around for funding. The funding CANNOT be raised without acceptance of the FDP, nobody would or could for that matter invest without an accepted FDP.

Once funding is secured in principle then Navitas can go for FID. I have said this before, I imagine the closing of funding will happen at the time of FID as they did with Shenandoah, and why not, Navitas are nothing if not efficient, why have two meetings of=r more to sign off on funding, then get together again for FID. It makes total sense. IMHO.

LTT

MD, must have missed your post on Finance being sorted, but then I don't have time to read everything. Good to know though, so Navitas are just waiting for the updated EIS with answers to questions from the public to be signed off, the the comfort letter issued and then with funding all but in the bag, we are off to the races! Nice, sure Borders will do well out of it. Showing commitment to the Falklands will open the flood gates IMHO. Onwards and upwards.

LTT

Of course you are right MD, someone could come along and take out RKH for a song, it is one of my biggest concerns now, along with Borders, but fingers crossed you are right and it’s good to hear the word on Stanley’s streets are that funding is all but sorted. Suppose it is in keeping with the FIG recent meeting minutes/Exco document where Navitas is asking for a “ Letter of Comfort” with regards to the FDP. Why would they ask for it now unless they needed to convince investors/Bond buyers that everything was on track and the starters pistol was almost ready to be fired🤔

LTT

LOL, the get rich quick happened for those who got in at sub 20p and got out at £4+, prior to the rig setting sail and upon the discovery of Sea Lion. PMO were never going to pull out all the stops as Navitas have done so far. PMO had too much on their plate which was ultimately their undoing.

Ok, Navitas have been incredibly lucky getting all that feed work and appraisals for nothing, but they have then put up the cash and the new hires such as Ian and his Murphy team along with strong arming FIG into action.

I cannot agree with Aiminvestors doom and gloom, always glass half empty attitude. Navitas have done more in the past 2 years than PMO did in 10 years. Ok, I am positive and will always look at things glass half full. I also admit, I bought a few more when Harbour came onboard as I couldn’t see how they could walk away from Sea Lion and write off all that investment! But they did. Suppose it’s easier to write off what you haven’t spent when you take over a company for a song!

However, to imply Navitas are going to walk away is very misleading, particularly when they have just completed the EIS and asked FIG for a, “Letter of Comfort” with which they can convince prospective investors/bond buyers that things will go ahead and FIG won’t backtrack or say, “ Oh the EIS needs updating to include how the hydrocarbons will we used!” Or “The FDP doesn’t take into account decommissioning!” Or “FIG have changed their minds and believe they can survive on Squid fishing and Cruise Ships swinging by”. Or the major one, that FIG are planning to be net zero by 2025 and do not see a future for the development of an oil industry for the islands.

For my money this is going ahead, be FID happening in 2024 or 2025, makes no difference to me, although I’d prefer to to be 2024 just so I can see what Aiminvestor has to say about it.

LTT

Hi MD,

I can understand your thinking if Navitas FID in 2024, the share price will rise with RKH and here, how much I am unsure, possibly a bigger move percentage wise on Borders, but don't you think it's a bit risky to go all in on Borders, if they rise on the back of Navitas's FID surely they will jump at the chance to fund raise (as they are running out of cash) and thus dilute your holding, plus there is a risk that someone might come along and take Borders private as happened to Argos!

Then it would be a matter of selling up or hanging in there (if they offer that option) until some day in the future when bigger players are coming into the Falklands.

As I said in my previous post, what's to stop someone making an offer for the whole thing and our Canadian friends casting the swing vote?

I'm not being funny or playing devils advocate, just wanting to be aware of all the possible outcomes, not just the scenario where we get a partners with money who farms in and pays us some cash to cover our share of drilling/development, which of course would be my preferred option.

LTT

But do have some concerns. The development plan comes in at about $650m whoever there are some caveats, such as the rig, $300m for the rig seems a bit on the optimistic side. If they get it from Africa the mob costs would be greatly reduced, but they are still considerable, and they say it’s dependent on rig rates at the time, so they could be nearer $400m or more.

They are unlikely to share a rig with RKH as Navitas are screwing everyone down on costs, they only way they would share would be if Navitas were interested in developing Darwin down the line, but dread to think what take percentage wise to drill and appraise Darwin. But stranger things have happened that’s for sure!

My number one concern is the stake building by the Canadian. Is he building a stake because he expects a deal, are is he building a stake to influence a deal? Could his stake seal a deal for a buyer to take the whole shooting match from under our noses. If someone were to offer 5p a share, of course the vast majority would turn it down, but he could get say yes, pocket a 100%/150% return and walk away?

Hopefully it won’t come to that and the wheels are in motion for a deal.

Regards LTT

And pulling out all the stops to give Navitas the go ahead!

https://oilprice.com/Latest-Energy-News/World-News/Oil-and-Gas-Revenues-Push-Guyana-H1-GDP-Up-50.html

How could they not when you read a report like the above from Oilprice. It has to get them salivating at the thought of all the cash that will come in after first oil and how they will be able to improve things in the Falklands and more importantly secure the Falkland Islanders future.

Why would they not push this through as soon as humanly possible 🤔

LTT

Chess, I am not sure where these Uni students will get thier money from to put into RKH🤔 most of the students I know are hard pushed to pay schools fees and rent, any that they have spare would be trading bitcoin, not tying up money here for who knows how long!

No, once FID comes and funding, which will most likely occur at the same time, then there will be a steady rise as we get closer and closer to first oil, as has happened with Navitas IMHO. 3 times the current share price at first oil, 45p - 55p would work for me. Of course id hope for more but that depends on many factors. Getting over 100m market cap for a start, and maybe some players looking at breaking from the North Sea start sniffing around. All could start to take the share price north. How much is anyone’s guess.

LTT

So with approx $27m as of June this year, then if OM comes good we receive $71m we are looking at having $98m war chest. Sweet.

That should be more than enough to pay our way to first oil once vendor financing and maybe a 20% partner comes on board at the 11th hour!

Now I wonder who the comfort letter is for 🤔 the bank or a partner? Either way it’s not long till the end of 2024, so if Navitas are true to their word, things should start kicking off soon.

LTT

Yes your right, Marunam2, due diligence would be something they couldn’t skip, but knowing Navitas, if they have a partner/investor lined up to take 20%, then they would have had them running the numbers as the project has been progressing. It would make a lot of sense.

Either way, I am starting to get a little excited, as baring a black swan event, it would seem Navitas are going all the way with this. I can almost see Sam being carried on the shoulders of share holders into the AGM next year! We almost 😉

LTT

I think I posted this before, but just as a reminder,

“ HEQ Deepwater, Houston, closed a deal Aug. 25 to acquire a 20% working interest in the ultra-high-pressure Shenandoah development in the US Gulf of Mexico from an affiliate of Beacon Offshore Energy II LLC.

The company was formed this year by Quantum Energy Partners and Houston Energy—a privately held independent oil and gas company operating in the deepwater Gulf of Mexico—with more than $400 million of equity capital commitments from Quantum and management, the company said in an Aug. 30 release.

On the day the farm-in deal closed, Shenandoah partners Beacon Offshore Energy and Navitas Petroleum sanctioned the development (OGJ Online, Aug. 26, 2021).

The buy-in was not surprising, said Mfon Usoro, senior research analyst at Wood Mackenzie, a Verisk company, in an Aug. 26 statement after project sanction. “We suspected a dilution of ownership before or at FID to help reduce Beacon and Navitas Petroleum’s cost burden,” she said.”

So a partner could come in at the eleventh hour without needing to do due diligence on the project, being happy with what Navitas, Ian Ramsey and team have done.

Make the idea of a “Comfort letter” for the FDP sound even more interesting.

LTT

Maybe it’s to comfort a partner, someone to slip in at the last minute!

Or maybe it’s so they can close the finance at the time of FID as they did with Shenandoah,

“ The other partners in the project are Beacon Offshore Energy (20.05%) and BOE II Exploration (10.95%) owned by Blackstone, while a further 20% will be held by BOE III Shen, owned by Quantum Energy Partners.

At the same time as the final investment decision, the financial closing also took place of the project finance agreement signed, as mentioned, earlier this month.”

LTT

Thronyone,

it's all part of the process, as Tincan says, they need to address concerns of the local people, be it about Penguins, or hedgehogs crossing busy roads or hotel accommodation being available for tourists, etc. They cannot run roughshod over locals concerns.

If it's any consolation, the EIS was submitted "with no material objections" and substantially agreed upon with FIG ready for final approval at project sanction back in 2018 (see the 2018 annual report). So not a lot has changed since then apart from a smaller development and reduce costs, etc, so sign off should be a formality.

LTT

I am wondering how the Finch Ruling could effect Navitas, RKH, the EIS and ultimately the development of Sea Lion and the surrounding prospects?

Seeing the two quotes below from an article about the Government throwing Rosebank and Jackdaw to the wolves, how could this impact the EIS and UK bodies that have to sign off on Sea Lion being developed? I realise that UKGOV cannot say "No" to the Falklands Gov with regards developing it's oil industry, as the Falklands are self governing, however, could they allow Sea Lion to be bogged down in red tape if "the impact of burning oil and gas in the Environmental Impact Assessment" is not addressed?

Personally I don't understand that ruling, as if you have to take into account the impact of how the oil is used, why isn't the soft drink industry held to account for the obesity and diabetes they products cause; the alcohol industry for all the accidents, fights, filling up of A&E on a Friday and Saturday night. They produce the stuff but are not held accountable for the outcomes of their products excessive use! Yet the Oil industry now has to be held accountable for people who want the drive their car; fly off on holiday, plus the making of solar panels and wind turbines to get to Net Zero ! It's crazy.

Sorry to go off on one there, just wanted to put it out there as to what and how this might affect the EIS and someone trying to take Navitas, RKH or even the FIG to court over this in the future!

Regards

LTT

"The landmark Finch ruling requires regulators to consider the impact of burning oil and gas in the Environmental Impact Assessment for new projects"

and

"The UK government has said it will not challenge judicial reviews brought against developments for the Rosebank and Jackdaw offshore oil and gas fields in the North Sea, in order to "save the taxpayer money"."

Once Sea Lion is up and running I could see RKH, having paid back Navitas after a couple of years and if they still exist 🤔, sharing a rig with Borders to head down to Darwin and drilling RKH lookalike prospects.

But then that also depends on if Borders is still around.

I hold a few Borders planning on the old adage “A rising tide lifts all boats” same as I did buying RKH because I had a holding in Desire! But I am under no illusions, most likely Borders are waiting/hoping Navitas gets the EIS,FDP,Funding and FID this year. The positive news should lift RKH and by default Borders. Then Borders will do a fund raise to put them in a more stable situation going forward. Hopefully at the same time announce a partner which would be fantastic, but cannot see any drilling on Darwin until SL is up and running in 2 to 3 years if we are lucky.

The reason being, I cannot see FID allowing two rigs drilling in the north and the south, they wouldn’t want the risk, even if they had the infrastructure and equipment to support it. Stranger things have happened.

I would like Borders to do well, but the best scenario is someone buys out Borders, because farming in, Borders would have to give a hefty percentage away.

LTT

Aim, why does the timescale bother you so? You have clung on to this share for a decade or more, why post “Running out of time” by your thinking they aren’t running anywhere!

What does it matter to you if Navitas FID in 2024 or 2025, it doesn’t matter to me, I am not hanging on to every word Navitas utter with bated breath.

They have set their stall out to try and achieve FID in 2024, it was a tall order by anyone’s standards, PMO tried for over 5 years and still couldn’t do it , where as Navitas have come along, grabbed the bull by the horns and built a team from scratch in less than half the time.

So if Navitas FID in 2024 it would be amazing but I would cut them some slack and be prepared for some slippage because they have done an amazing job so far.

LTT