Member Info for lsetown

Interesting that Rockhopper and FOGL are merging. At the least it will make the North more consolidated for whoever gets to produce there. Noble?

I see one trade of £95.48 today. It is hard to believe that there could be value here. I guess the quiet on this board is a good indicator that now may be a time to buy? Who knows. Say they discover and develop 400 million barrels ( a big 'if' I know). Argos get 20 million barrels of that (1-0.3 tax) * $50 a barrel = $700 million over twenty years. The company could dividend $35 million a year for twenty years or about 10p a share each year. This could be an ideal pension fund but I wonder what will actually happen? Not that I want to get old, but it would be great to know now what holding will produce after 25 years ! At least January should be fun.

What about a similar deal that ARG recently made with NBL? A small percentage royalty free of all opex/capex costs. Like ARG it would mean that BOR wouldn't have to try and raise any extra funds for drilling etc. Noble are already a big player in this region after their deals with FOGL and ARG. I think they could eventually become the dominant player in both the North and South Falkland Island basins.

That's a real shame - what is their corporate and financial communications agency for then ?! Plenty of other companies are very communicative.

Yes, we can wait and I too hope it will give them impetus (but hopefully not impotence).

I agree Tuggy, they should spell out how the ORRI works and what the expected taxes will be. But how do we get a response from the company ?

I notice the wording of yesterday's RNS changes: The Company will retain an overriding royalty interest of 5 percent of gross production from all hydrocarbon discoveries developed within the Licence Area (the "ORRI"). This interest is retained free and clear of the need to contribute to any future capital or operating expenditures incurred over the life of the Licence; So 'Gross Revenues' in April becomes 'Gross Production' yesterday. Is it a realisation of FIG tax implications? I am hoping the deal is at least the revenue of 5% of production (to be sold in the market at WTI/Brent price) with the usual 9% FIG royalty and 26% CGT applied. I emailed Argos twice in recent weeks (as well as their Citigate promotions company) regarding this ORRI and tax but I haven't received a reply from either. Anyone managed to make any contact?

I also wondered. The original agreement RNS on 13 April 2015 said: Argos will retain an overriding royalty interest of 5% of gross revenues from all hydrocarbon discoveries developed within the Licence (the "ORRI"); · Argos will have no requirement to contribute to any future capital or operating expenditures incurred over the life of the Licence; Gross Revenues are before any operating costs. So can we assume that would be the price it is sold in the market for?

That's great that they have completed. A good amount of money in reserve now and the great promise of the Rhea drill.

I think I'll ask the company about the tax as I haven't read clarification in any of the reports. Apart from ARG, which of the other three FI explorers do you think is the next best bet? I like the BOR market cap. but the downside is that it needs the south licenses to be oily. It wouldn't surprise me if BOR, RKH and FOGL eventually agree similar ORRI deals with Noble and Edison.

Anyone know what (if any) tax ARG would have to pay the FIG on their 5% royalty? I seem to remember a 9% Oil and Gas Royalty and a 21% Capital Gains Tax applied to FI Oil and Gas. I could imagine that if this ORRI is worded correctly, Noble and Edison would have at least to pay the 9% Royalty tax?

Actually 4.31 is the one: 4.31 Honourable Members are therefore recommended to approve the recommendations of this paper, and advise the Governor to action the Director of Mineral Resources to grant consent to NEFL to locate the rig at the Rhea-1 prospect and spud the planned exploration well. Commencement is expected to be in September or October 2015, and the anticipated duration is approximately 38 days.

Someone on III posted this: read para 4. 31 of the well consent..... http://tinyurl.com/ptj2w8u I had to download manually but the text in there may confirm this: 4.3 Papers 216/14 and 51/15 sought approval of the terms on which NEFL, as operator of various licences in the South Falkland Basin, should be issued with consent to drill various exploration wells scheduled for the 2015 offshore oil exploration campaign. The paper set out eight critical approvals required by NEFL for the company to secure consent to drill. NEFL met these requirements, secured consent to drill for the Humpback-1 exploration well, and that well spudded in June 2015. 4.4 At the time of original consideration, the opportunity for NEFL and Edison to farm in to the Argos licence had not matured. NEFL’s original intent was to drill a second well in the South Falkland Basin. As a result of the completion of the commercial farm-out process, NEFL and Edison now wish to drill an exploration well on the Rhea-1 prospect, targeting what is regarded by the joint venture as the best prospect within this newly acquired licence area. Drilling the Rhea well replaces the second well that NEFL intended to drill in their southern licence interest, to fulfil the two firm drilling commitments that NEFL hold with the Eirik Raude drilling rig.

Tuggy. Yes this could be a good investment if several things align. Do you know when the Rhea drill is scheduled for? It is currently drilling for FOGL/NBL isn't it.

Thanks Tuggy. So we are pretty sure then that NBL/Edison can't pull-out without losing the drill money. If so that is good.

Anyone know if NBL are committed to drill on PL001 this time around? The ARG-NBL 5% deal hasn't been completed yet has it. Could the low oil price dissuade NBL and hence scupper the deal?