Member Info for longtermthinker

But that’s just it Page, when Harbour walked away, all the benefit disappeared with them. RKH paid tax on the 240m they received and the carry is going to be irrecoverable as how can you pay tax on something you never received?

So RKH got the Navitas farm-in giving all the worked up development plan and the money RKH spent out of that 240m on appraisal and exploration drilling for nothing! Navitas have not paid RKH a penny for their 65% of the acreage.

Anyway I do hope you guys are right and Borders get a farm-in partner who will give them a couple of 100m’s or someone buys them out lock stock.

Thanks again for your thoughts, plenty to think about.

Regards LTT

Thanks for your thoughts, I understand Borders has a great discovery, but with RKH getting nothing in return for funding development that they have to pay back, so basically all the money spent on drilling and appraisal, seismic, 3D interpretation was valued at 0, Navitas came along and got it for nothing. How are Borders going to broker a better deal with time running out?
If they want to extend the licenses will they had to raise funds again?

Just trying to get my head around the recent rise in the share price. Something does seem to be afoot, but cannot think what at the minute.

A puzzled

LTT

how Borders can be valued/bought out for 25p to 50p never mind £1?

RKH had 100% of their 400m barrel plus appraise oil find and yet they could only get Navitas who in return for 65% offer to fund them through FID and most of the costs to first oil which they will have to pay back. They are currently at 14p per share will £150m plus due from Italy. Of course that is not a certainty hence the discount, but even with that cash banked they will only be valued at 25p.

So how can Borders get to the dizzy heights mentioned here with no partner, very limited cash and a licence due to run out at the end of December this year?

Don’t get me wrong, I would be over the moon if this got taken out for 25p as I am a shareholders but cannot see where said partner would come from offering a better deal than RKH got from Navitas, and not just a slightly better deal but a deal of many magnitudes bigger.

Many thanks

LTT

Hi Port,
I can’t see why they would need the new port up and running to support SL, they ran and exploration campaign and then an appraisal campaign without it so can’t see that being an issue. If anything it should incentives FIG to support RKH and Navitas to get a move on and get SL up and running, thus bringing in a revenue stream to pay for it.

LTT

Hi Bloo, it means that RKH can’t give say half the cash to investors as a special dividend, it also might be a poison pill for anyone wanting to take over RKH if they are still undervalued after they receive the cash, thus stopping them from snapping up the company and stripping out the cash. Think someone tried the tactic a few years ago when PMO Farmin in and we were awash with cash!

LTT

Morning, well we didn’t expect them to take the full 120 days to decide so as we sit here on the deadline day, it’s pretty much a cert that should they extended with the extra 60days taking us into October, then they will take it to the wire then also!

So be honest I can’t understand why they would not want this out of the way now, let the news drop as the old government is on its way out. Why wait and have the new government paying the bill!

LTT

“ Santos Energy has announced the final investment decision on the Pikka oil project in Alaska, which the Australian company expects to produce 80,000 bpd beginning in 2026.

The first phase of the development at the North Slope deposit will cost $2.6 billion, of which Santos’ share would be $1.3 billion, the company also said. The Australian energy major is partnering with Spain’s Repsol on the project.”

So large projects are getting signed off, however $2.6B for 80k per day seems a lot of money especially as for $1.3B they could have paid for the whole of SL revised Phase 1! Suppose it’s a chicken and egg scenario, but once SL gets FID the province is opened. We might even get some interest in our Southern acreage once SL development drilling starts!

Well I’m travelling back to the UK tomorrow 19th (no really!) so you can guarantee we get the OM news on the 19th, share price rallies to 35p per share on a £150m win, they drops back to 11p by the time I’m off the plane Friday evening! No figure eh! Oh well such is life! ;-)

LTT

Hi Much, I was thinking something similar, 7 or 8 percent but wanted to air on the conservative side. But 7% would be nearer £2m for a 2 month extension on a payout of £150m. Just out of interest how do they work out the interest? Obviously they can’t work it back to when the case started as £150m @ 7% per year would be £10.5m!

LTT

Good point Ocean, if we have won £150m @ 4% per year, then the 2month extension will cost the £1m in interest.

Of course it’s just a ballpark, not sure what the interest rate would be, but either way if they have lost and we are getting a decent payout, stringing it out further will cost them that’s for sure.

LTT

I was thinking the same LaticsRule, but why would RKH have to give share options to a Navitas hire, maybe we will hire someone at RKH to work alongside him, hence the need for options. Watch this space!

LTT

Last SL update;

"Rockhopper Exploration plc (AIM: RKH), the oil and gas exploration and production company with key interests in the North Falkland Basin, is pleased to announce that all regulatory consents required for the transaction between the Company, Harbour Energy plc ("Harbour") and Navitas Petroleum LP ("Navitas") as announced on 19 April 2022 (the "Transaction") have been received from both the Falkland Islands Government ("FIG") and the UK Secretary of State. As part of the Transaction, FIG has agreed to grant a two-year licence extension to all the licences held by Rockhopper in the North Falkland Basin. Accordingly, the licences will now run until 1 November 2024.

The Transaction remains subject to certain other conditions but is expected to formally complete during Q3 2022."

So why shouldn't Navitas hire a new COO to lead the Falklands charge? FIG and UK Gov have given regulatory consents, what would they back track on "Certain conditions" which must be a shuffling paper exercise more than anything, they wouldn't have agreed to consents if there was any concerns about the finer points!

Anyway, If they go back on their word to allow Navitas and RKH to steam ahead with development, Sam knows some lawyers who might take on the case!!!!! (god forbid!)

LTT

I think “Great News” is an understatement this is FABULOUS news! Navitas are not officially signed up and they have appointed a new COO, but not for the company, specifically for the Falklands. Anyone who thinks Navitas are going to sit on their hands once FIG signs off is living in cloud cuckoo land.

All we need is the FIG to give some tax break/incentives and this is game on. I wonder how long it will take for the penny to drop with the bigger players, to take on board that Navitas means business!

LTT

Have to agree pauldrayton, an outcome where we get nothing is as much on the cards as a £200m award. Hence why Sam did the fund raise to keep us in the game, now with a much better player than PMO. Sure there will be a blip down in the share price with no award, but it should be relatively short lived with any news from Navitas.

To be honest even £30m would be a win in my book, anything more will be the icing on the cake.

LTT

Bloo ideally yes they could get it from OM but if they don’t, it won’t be the end of the world. Let’s face it once this has gone to FID and then project sanction, even with no OM award, the share price would be much higher than today if they were sending a rig down for development drilling. Any fund raise would cause minimal dilution. With a share price of say 50p at project sanction you’d be looking at 70/80m shares to pay our 1/3rd share. But let’s not worry about that now, until we know what the OM result is, it’s all speculation and it’s a couple of years away before we’d have to put our hand in out pocket. Plus we could possibly get a loan for our share of costs with the project going ahead. Interesting times are ahead.

LTT

Market Dealer, what makes you think that Navitas would do a deal with Argos before sorting FID on SL? I could see them offering up the use of a rig in down time on development drilling, but at what cost to Argos, massive dilution to fund a couple of drills? Giving away a hefty percentage to Navitas/RKH for a couple of drills? Who is going to pay anything to farm into and then drill some wild cats? RKH had to give away 65% of EVERYTHING to get the deal they did which is pretty much funded to first oil, but money they will have to pay back, nothing like the deal they got from PMO!

By the way, I’m not having a go at you, I’d just be interested in you adding some meat to the bones of why you feel Navitas or others will drill Argos acreage.

Regards LTT

Sorry a typo I meant “it wouldn’t be the end”

Although I suppose he has covered the risks, he raised funds to see us through the next couple of years and the OM is on a no win no fee, so even if we did lose, it has cost us nothing. Of course it would effect the share price negatively, everything does, sometimes even positive news, but it would be the end, it would just be a nice Brucie Bonus if OM came good.

LTT

LacticRule, I can understand you frustration but I cannot see what Sam & Co. can do at the minute. The ball is out of their hands, we are waiting for FIG and UKGov to sign off, we are waiting for OM, at least on reduced salaries and having put some skin in the game they are (slightly) more aligned with shareholders.

As for the market of course there is nothing to see here as usual, nobody is buying and nobody is selling, so those who are in have tied their flag to the mast and either will sail into the sunset or go down with the ship, it’s a binary deal. Those who are out are trading other shares, a good example being Harbour, hit hard by the tax situation but back on a role, oh to have at bought at the recent lows of £3.00!

Once the news is out, they will come into RKH or get out. Simple as that. I may be one of them selling a good part of my holding as after OM and FIG/UK sign off there possibly will no be much happening for a couple of years. Yes there will be the signing of letters of intent, there may be some funds raised but until FID and project sanction there again will be nothing to see here. The question we need to ask ourselves is do we want to take the risk of losing everything or hold onto shared purchases at 7p for 3/5 years and have them worth £1/£2 + on first oil?

That is the advantage the small investor has, he/she can get in at the lows and sit tight, sometimes it can pay off as it did with RKH upon discovery, but can lightening strike twice?

Regards LTT

LOL yes patience it wearing thin indeed.

Am afraid I see this going to the wire and then them going for the extension. Why you may ask, well they were supposed to be in a position to render the award in July/August last year, then Italy had a stay of execution into October with a 5 page submission. Then we got the news more recently that the case was closed and a 120 day countdown had been set in motion (although extendable be 60 days if necessary ). So with that in mind and the fact we are heading into Summer season, I think the Italian selected judge is doing everything he/she can to delay the inevitable IMHO.

I cannot see any other reason this is going to the wire. Regards
LTT

I hope not, it might seem great for oil producers getting over $100 per barrel with predictions of $200+ but that would just hasten the crash as a DEEP recession hits not to mention the civil unrest around the world.

We are pretty lucky at the moment that if costs get too high we can work from home and not commute, not buy that coffee on the way, not eat out for lunch and forgo the Friday pub! But what about all the workers those jobs support? It would be worst that Covid lockdowns.

So no, I won’t be rejoicing if oil hits $150 it would be a detriment to RKH and to everyone in general.

LTT