Member Info for longtermthinker

Blooming heck, please ignore my last post, it was last year! LOL, back to work, nothing to see here!

Sorry about that.

LTT

Just thought I would share this, not sure if it's been posted before but on Wed, May 18, 2022, 8:00 AM - 9:30 AM Navitas are having an investors conference, here is the event link below (if it works),

https://bit.ly/3N9ExR7

Should be interesting.

LTT

Hi Penny,

no I haven't taken up the warrants either, they are just sat waiting in my account, probably stay there until October or November and then might be worth buying and keeping or can just get my broker to buy and then sell them and I pocket the difference, which at the moment is not worth doing, but come October it just might be. Maybe sooner if the OM Stay is no approved or Navitas announce funding progress or letters of intent being sent out on rig contracts.

I am pretty sure they will have to source a rig and send out a letter of intent, can't just book a rig the month before, not when they have to take into account MOB costs and 18 holes to be drilled (11 prior to first oil). If you work on them taking 45days per well, that's over 2.2 years of drilling, that's 1 year and 4 months prior to first oil then another 1 year after. I think from memory they did a well in about 30-35 days on average, but imagine a producer would take longer as it seeks out the sweet spots. Someone with actual knowledge of these things please put me straight on the above as it's all guestimation on my part!

So what I'm getting at is, despite not expecting news on the OM award until Jan 2024 and FID not due until first half of 2024 as far as we are aware, it would be wrong to assume that it's a case of nothing to see here until mid 2024 at the earliest.
However time will tell.

LTT

Hi PennyorPound,

May I ask how you get to us being a bit short of cash?
What would we need funding for? Pre-FID costs are covered at 8% interest , Post-FID costs are covered interest free, if we don’t get the OM award in the first half of 2024 (presuming the case is won by us) then there are options for the $30m approx we would need to stump up to get to first oil (the $30m was someone else’s numbers so could be more).

So if we get FID and project sanction in 2024, firstly they wouldn’t need the cash straight away and either way we would have the following options;

1. Would be RBL which would be achievable upon project sanction.
2. Sell part of the award, as we would get a much better deal after the annulment has been thrown out.
3. Fund raise. Not ideal however after winning OM, FID and project sanction I would be astonished if the share price wasn’t 40p+ so dilution would be minimal.

So can’t see us running out of cash before one or all of the above happen. Let’s not forget the outstanding warrants to be exercised prior to end of Dec 2023 there has to be some reason for that date IMHO. But open to be proved wrong.

LTT

I am really happy with Navitas's plan, I was always concerned a watered down version would bump up the costs per barrel and therefore make it touch a go whether it got FID or not. I know the oil price is set to be above $70 for the foreseeable but it would be just our luck to have a oil price spike down in the 1st Q 2024 due to recession and it's up in air as to getting sign off or not!

The new plan is pretty much what PMO worked up but with first oil sooner and a staggered start. Actually costing more with a total capex of $2.2bn but the oil starts flowing prior to stumping up the extra $900m. A master stroke if you ask me.

Also can imagine the rig heading down early to drill the second campaign to drill a few holes on Isobel and Elaine, it would be rude not to with a possible field bigger than Sea Lion!

All we need now is news from OM as to whether the stay is on or off. The stay being upheld is already priced in and the long wait to FID in 1st half of 2024 is also, but imagine if the stay was not upheld, it could happen as a unanimous decision was given in RKH favour plus they have been waiting for what is it, almost 7 years! Also Navitas will have to start the ball rolling sooner rather than later, surely they can't wait until 2024 and announce FID/Sanction and THEN start rattling the tin for funds and look for a RIG/FPSO/Manpower, etc.

I am looking forward to this years AGM indeed, it should be the brightest and most upbeat in the past 7/8 years!

LTT

Just found this;

Petrojarl Knarr has been at Aker Solutions yard at Stord, Norway since August 2022 after completing oil production on the Knarr project in Norway.
“Aker Solutions intends to contract tugs to tow the Petrojarl Knarr FPSO from Norway to Dubai H2 2023 ready for its major upgrade. It expects the EPC work to begin H1 2024 and finish at the end of 2025.”

So if Navitas intend to have oil flowing late 2026 then they would need to find a suitable FPSO by H2 2024 to allow time for it to travel to a suitable shipyard for refit.

Still not sure how FID works though, do they FID then go look at booking the rig, manpower, etc or do they get letters of intent signed off on costs and get everything lined up ready for the FID project sanction button to be pushed? Either way they will have to get some brass in before all that.

LTT

Hope you’re right Gus, fingers crossed, but the board are terribly quiet, why are they not shouting from the rooftops.

Good luck to us all.
LTT

Pages, I think the best hope we have is to get FID on Sealion over the line, development drilling underway then fingers crossed a big player farms in for 30% of SL and then takes a hard look at Darwin. It needs a big player with cash as getting finance it’s getting more and more difficult due to the demonization on anything oil and gas I’m afraid. Would love someone to stride in and take Darwin to production but nobody is going to take that risk at this time, it hasn’t happening this past 10 years, what has changed to make it happen now?

LTT

I’d like to thing the point of the EPL kicking in would be $80 or $85 per barrel, if it is announced as that then all good, anything less then Linda will stay on the new track of edging away from the NS and looking at overseas opportunities. So either way I see onwards and upwards from here.

LTT

Yep Nick, can’t believe after that update from Navitas we are still languishing at the 10p mark, Navitas have done more in the past 6months than PMO did in the past 10years.

I know once bitten an all that, PMO promised so many times “Next year, next year!” and a lot can happen between now and FID, but it’s seems if it all comes to nought, it want be through a lack of trying.

Also reading through some of the info posted my DEM and the like I noticed there were a percentage of Annulments that didn’t even make it to a hearing, they were thrown out for time wasting. That could be a possibility too. Either way I hope they went down the quantum route, it would be really funny if the panel said, “ Hhhmmm yes you are right, the production numbers, field life and the oil price used are wrong, you actually owe RKH $375m plus interest!” LOL One can but dream.

LTT

Well if they are planning boots on the ground and first oil by 2026/27, they will HAVE to do FID and Sanction by the end of this year.

Now if I was a conspiracy theorist I’d be wondering why Sam gave us the warrants with an exercise date of Dec 2023! If this gets sanctioned before, then I can see 100% of those warrants being cashed in, with many folk wishing they had applied for more, me included.
(No doubt you can tell I’m at a loose end today, will shut up for a bit now, getting a bit over excited!)

LTT

Good point Ralph, Israeli version of UKEF! Even BlackRock is back tracking on the “No fossil fuel investments” rhetoric!

LTT

Have to agree Paul, don’t want to be counting chickens and all that, but with Shenandoah, I watchED there partners presentation at last years Navitas event, and he was laughing saying, “ This might not be a big deal to those not in the industry, but Navitas secured ALL the funding prior to FID / Sanction (bit foggy on which but if you watch it you’ll hear), in my 30+ years in the industry I’ve never experienced that before!” Or words to that effect.

So that is why I think they are good to go and why I think this coming Navitas meeting might just be a “OMG it’s full of Stars/blow your socks off” type moment. IMHO. I’ve probably jinxed it now saying that and they will produce a damp squib! LOL

However, they will have to announce something, for their reason for all heading down to the Falklands, it can’t be just to sample the Squid & Chips can it? (see what I did there, got the damp squid in just in case!)

Either way, we have news due on OM and the cash pile is still growing the longer they take, plus we are 3months closer to getting the award. So onwards and upwards IMHO. Good luck to us all.

LTT

HiramAbiff, I don't imagine an oil terminal being put on the islands; equipment storage, lodging for crew, etc, yes, but no oil or gas being piped to the mainland. It's all sorted by the FPSO and shuttle tankers coming and collecting the oil and then heading elsewhere to offload.

Of course FIG could have change their mind, but it was never on the cards.

Maddogpete I thing PJ said a lot of things way back when, probably talked the talk and said what possible investors wanted to hear, but the $1.8B was the final PMO plan. The downside plan is meant to be closer to $1B and hopefully targeting 55K to 65K per day. It's a balancing act between small enough to make money but not so large as to put off investors.

LTT

I was thinking the same Buzz, but the capacity is only about 30/40k per day, it would very limiting, check out an earlier post of mine musing other options.

Cheers LTT

This could be one of those times when we are expecting the same old, same old, blah blah blah, “We are making progress”, type statements and then Navitas blind side us with news about the MOU and a development plan. Last year Gideon said with SL they plan to do in again, so he will have to say more than, the doing it is in progress! Just a thought.

LTT

Thanks Jock for sharing, good to get some facts. It all sounds very positive and feels they are making strides forward. No mention for a timescale, but then we can expect that to come later, hopefully sooner rather than later. I love this bit,

“The enthusiasm and can-do approach of the Navitas Team is very evident, having face to face meetings has been invaluable. Their commitment to Sea Lion and to working closely with FIG has been very demonstrable and we look forward to developing this further, through joint workstreams over the coming months.”

Over the coming months, sounds like they are taking the bull by the horns. All we need now is Arbitration news saying that they have ruled in favour of RKH and lawyers with regards the stay.

LTT

Could also be locking in some gains for the end of the financial year. If they weighed in at 9p ish last year, a 15-20% gains is not to be sneezed at, plus as you say, they sold into a time of positivity as not to crash the share price, anyone would think it was an orchestrated plan!

Not me of course, although I would still like to know if MD was actually at the meeting, heard a recording of the meeting or just got a report of what was said, otherwise there are too many places were information could get embellished, not intentionally but it can easily happen. Human nature can put a spin on anything and make it into something we want to hear!

LTT

I have a few Borders also but not many now, holding out for a buyout but can’t see the amounts they are talking about on the Borders BB, 50p+, I think they are dreaming. Of course I hope I’m wrong, would quite happily accept 50p a share, but when you consider what happened to Argos and also us here at RKH can’t see how it would happen. We had to give away 65% of a 700m barrel oil field to get funded to FID which we will pay back at 8% (from memory) and then an interest free loan for 2/3rds up to first oil (again from memory). What I’m getting at is the days of the likes of PMO paying 240m for a share of an oil field are over. Borders may get an offer similar to RKH, funding the appraisal and development for a hefty share of Darwin, maybe keeping 25%, but cannot see anyone buying them out for more than 10p a share! IMHO

I could dream and hope for 50p a share but the realist part of me says 10p or a free carry to first oil will be all we will get. Good luck to us all though.

LTT

Whilst we are waiting for an update from Navitas, RKH or both, I thought I would mull over a couple of thing's that i have been thinking about.

If we take it that Gideon is aiming for 2026/27 for first oil, ( of course the jury is still out on that one!) then I would imagine that a rig and crew wouldn't be a big problem for Ian and his team to secure, what with budgets being cut, projects being postponed or canceled all together in the NS, same goes for sourcing for other equipment they would need, they would have a year + if they were planning to get boots on the ground in 2024.

To my mind, the biggest issue would be the FPSO (could be wrong, so stand to be corrected on this). A new build would be a nonstarter as Sam said, the major contractors have a backlog of years, so a refit or a repurposed one would work. I originally thought of the Aoka Mizu, working for Hurriance Energy off Shetland, it may become available in the next 2 years. I presume it would need some work to make it suitable for Falkands Waxy oil, but thought it was a good option, but have been having 2nd thoughts, partly because it's capacity is only 30k bpd which would suit a small development if they were planning to just start small, get the cash rolling in, but doesn't take into account further drilling and incremental increases in production. It works great for Hurricane, but I'd like the think Navitas are not going down to the Falklands to develop the basin, not just SL.

So I thought what about the BlueWater's FPSO Glas Dowr? It's double hulled suitable for NS, so that ticks the box on being suitable for the Falklands, and can do 60k bpd. It says on the fact sheet it's looking for redeployment, not sure how out of date that is, but it says the same on the website too. Does anyone know what it stakes to redeploy an FPSO, what work would have to be done to get it ready for the Falkands? Either way it would be a lot quicker than waiting 5 years for a new build. IMHO

Regards LTT