The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Good Morning Mr Moody,
Please can you advise if FIG has approved the deal for the Ombrina Mare deal ?
If not, what is the hold up, is it the tax position ?
Reply ( within an hour ) :
Thank you for your e mail
As and when we receive consent for the transaction we will make an RNS in the normal way
We require the consent by end June or the deal will fall away, unless both parties agree to extend
Hope that all makes sense
FIG is very slow at giving consent for various things in my experience
Sam
Pauldrayton, I am of the same opinion re finance.
I've posted before that the CFO of this project was in Europe for Sealion Finance , around 12-16 months ago.
Remember, Navitas came back twice for Sealion , PMO days and when Harbour released it . They will have done DD from the PMO days.
They must have been very confident of securing finance the 1st time they entered when their share would have been lower.
Having come back the 2nd time a operator , knowing full well , the whole burden of finance was on them along with the associated costs to set it up, they have invested significant time and money to move this along.
The utter madness of the windfall tax continuing will enhance the appeal of Sealion even more for companies in Europe.
The Navitas update on Sealion was the best yet for shareholders here to digest what it takes to get to FID.
There is likely a interest rate cut in the US coming in a few months, that will send positive signal to markets worldwide.
I will be surprised if EU money comes to finance this, my money has always been on Dalek ( also as a farm in partner) .
Oil trader's could play a significant part in the financing, the vendors could also be on board with financing the project knowing it is a long term deal.
Re OM- if it get's to court and Italy lose , very likely, then I expect a good settlement to come.
Lots happening , just some time for it to come together.
GLA.
Beat me to it Mogger,
2. Navitas workplans have evolved and been delayed from initial timeline. FIG oil readiness continuing regardless of Navitas delays. Key priorities for FDP, EIS, FID are expected to be met. 3. Sea Lion Project Director working with FIG departments for oil readiness for existing programme. Ongoing.
At a Guess: I suppose that the FEED has to be adjusted to account for the identified FPSO, the specifications can be more accurate if the vessel is identified and would need to be able to translate to all the work streams involving the FPSO.
We know its a monster project that will I daresay require tweaking till 1st oil as like any project .
GLA,
P.S, price shifting up from now on , material news coming in the following months and investor interest will start. .
For me ,15p on OM FIG approval ( means the new boys can start looking at assets to grab off Italy, massive pressure politically and sovereign credit rating wise ) , if not will buy all the way to 15p.
Do Italy really want to go through to ICSID and as they say "find out " , maybe , but big boys will be in touch sharpish with Italy after deal is approved by FIG, hence the fig approval being important .
Any Sealion news re financing , H.O.T or any MOU, we will be at 20p in a flash, if not before OM.
buy under 12p and near 25% return at 15p.
Remember the adage : sell on news , currently there is too much news that can come out one after the other and will you be nimble enough to play with the II's and MM's and the traders?
Should everything come into place FID, OM, then stick my neck out and say 50p-70p,dont underestimate the herd mentality could be a lot more when word gets around .
GLA
60m shares can be traded out in the course of significant news, personally don't think the II's would do it that way., they like us have held on for a long time , they want £ per share , they can happily wait 4-5 years.
I asked Sam about the II holders and he said that they were dependent on filings from the II regards holdings, It is down to II to notify the market and there fore the company.
As of 8th Jan : Aeados hold 51,638,961 or 8.06% and RAB Capital/William Philip Seymour Richards 29,000,220 or 4.53%.
Sam Moody and Alison Baker hold around 5m shares (just under 1% ).
RAB capitol will churn the 0.5% of the 4.53% holding, that's nearly 2.5m shares.
That leaves around 555.5m shares in PI's hands , that is a significant amount in private hands , I find that in a lot of aim companies with little to no valuable assets , just blarney , see UOG . RKH is approaching a FID !!
As an aside , I was holding premier oil shares when they were around 2p and sold them at 6p , that was a significant profit, lack of foresight and experience mainly, cost me a retirement at 45. They peaked at £1.40
Roll forward to RKH / DES , bought from 10p, to 40p then sealion was discovered , within the next 2 weeks after discovery, the price doubled ? tripled , this was when oil and Gas was going on a bull run .
The second tough lesson learnt was when I holding 60k RKH shares and even buying more at £5 quid thinking here comes £8 , had I sold at £5 would have made 320k. Life changing for sure over a decade ago.
When news hits , hopefully as we all want, the 550m shares in PI hands are going to come loose and II's (the 2 we know off ) are going to churn their holdings and they will win big, accept it .
What seems a good SP today to sell at, as per the list of sp predictions , may be a good place to take SOME profit., then you wont have regrets. Taking some profit at whatever level would de stress your holding and leave you mentally better off for letting events play out , some cash in the account is essential to trade . Remember how many on here held on too long on the way down( me included, sold at £2.20 ) when there wasn't even a FEED in play. let alone a FID.
For me serious money won't come till 2025, when things have a firm footing re the company and Sealion.
Before then traders will trade the sp swings and that's good, they bring liquidity, this will be good for LTH as II's will use that to off load their overhanging stock (warrants shares) . They may also sell these to other II@s at a premium when positive events start to happen(2025).
As a great crypto trader told me, HAVE : NO regrets and NO emotions when trading.
60m can be traded out in the course of significant news, personally don't think the II's would do it that way., they like us have held on for a long time , they want £ per share , they can happily wait.
GLA
" The darkest hours are just before dawn "
As Monty Don would say , Here are some jobs to be doing as we approach our spring... so to speak .
Through hard learnt and costly lessons , learn not to fall in love with the stock, treat it as a means to gain wealth rather then "supporting " a company. The company owes you nothing and you owe it nothing.
Learn some Technical Analysis (TA), even if it is basic.
Read the weekly articles on oil and gas macro trends. Know what and why you are investing , at least have some average knowledge of the Sealion field and the economics that goes with reaching FID, all in the rns 's through the lest few years.
Keep your strategy fluid, the younger you are the better to consider waiting for 1st oil ? dividends .. should FID go ahead, older(me ) people may want to cash in once they reach a target in mind as 3 to 5 years may be too long a wait.
I plan to trade the shares once I reach a level where even if they drop I would still be way ahead, don't want to be making gains and not have the time or health to spend it on my family,aging does that to you.
I'm keeping busy trading Crypto and what an eye opener that is , I remember the same buzz in Oil and Gas stocks when Sealion was discovered. As Chessmaster pointed out , the sentiment has come full circle on O&G. Never the less people still invest in fossil fuels because there is money to be made, and FID would change the sentiment for RKH overnight.
IF you FID it they will come ...in droves.
Long post I know, but instead of getting nervous, get excited and enjoy it, closest in a decade to make great returns.
GLA and have a good weekend .
Courtesy of Icsid.
chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://icsid.worldbank.org/sites/default/files/publications/ENG_The_ICSID_Caseload_Statistics_Issue%202024.pdf
Page 19 - Annulment decisions.
Low % chance of success for Italy.
Thanks Mogger,
Fig oil readiness meeting was on on 4th December: "Matters will become clearer and crystallise once a project plan is produced."
Recent RKH RNS :An updated FDP has been submitted to the Falkland Islands Government and it is anticipated that an updated Environmental Impact Assessment ("EIA") will be submitted during Q1 2024.
So updated FDP is with FIG and EIS to be submitted this Q.
If memory serves me right , FIG outsource the EIS submission for compliance to GB .
That leaves the FDP, wonder if they will do the same for this .
Also the FIG approval for the OM deal will be coming soon, don't foresee any objection , as was the case with the Abu Sennon deal.
Things are coming together, Q2 will be very interesting .
R,Radar,
Worth noting that Shenandoah alone ,excluding all the other Navitas production assets , is expected to generate $1.1B before Ebitda by end of 2025, the 1st year of production of which they own 50%.
Wood Mackenzie estimates a rate of return for Shenandoah at 37%, this was 3 years ago.
The project was drilling prospects where 20,000 PSI wells are involved, no where near Sealion PSI levels so arguably more risky, but infrastructure nearby eases that risk .
Bearing in mind the situation currently in Israel, financing and farm in partners could come from anywhere.
If Om is sorted by H1, then RKH being able to finance a majority of their share of funding would ease pressure and make a TO more difficult to get on the cheap and more lucrative for shareholders as it would be still virtually debt free.
Navitas is going to be huge when Shenandoah comes on board.
GLA
Baldmark,
As it stands the OM deal is in place with the new funder, the wait is for FIG to approve it so it can go ahead. Once approved by FIG, the deal is confirmed with will parties to the deal.
The deal has been approved by the pervious funder taking a cut of the $45m as their payment, the lawyers will also have their cut from this 1st tranch.
"Also the Falklands, being in the Atlantic, are in the US sphere of influence. The Americans don't generally like competition to their own oil and gas companies."
So are you saying Sealion is a threat US oil and gas companies ? ???, really hope you don't believe that .
FI has a unique place in British history , blood was spilled by an invader and war was declared, matters not who the GB government is , they would be slaughtered in the press and parliament every day if they harm the FI.
For me , the new NSAI report is interesting , apart from increasing the 2c it bought down the Capex by $2boe , may not sound a lot , but they commissioned it for more then an upgrade in resources. It would suggest to me that funding partners and a farm in partner were the target audience. further de risking the project , indeed making it more attractive.
I have believed that an fpso had been sourced some time ago , it's not at all wise to signal to the market and oil market suppliers that we want long lead items but don't have specs' on the fpso we may get , a project feed of this size requires some high level of certainty as to the economics and capex to hang your hat on . The feed team didn't / couldn't revise the number of wells , production and capex without a firm base as to the capabilities and capacity of the fpso.
Long lead items or fpso first ??? , I liken it to a laying a foundation on a house (fpso), and then the other things to build on comes after - walls, windows, roof etc. ( long lead items )
The Navitas finance director for Sealion has been on this for nearly 15-18 months from what I gather, FPSO , long lead items, funding FIG recruitment for Sealion etc, the project has been obviously ramping up for some time. A separate team for the Sealion project has been in place for a long time .
Also, bear in mind that OM news could drop anytime from now till June, the unknown company taking it on would have seen all the legal arguments before offering a deal to RKH, they must be very confident to so.
A very, very positive base formed , as retail investors it offers a chance to get ahead of II's if you believe a material change has occurred or is going to occur as we go forward.
This is the aim market, so eyes open trading ,so you don't spend all day on here wasting your time.
GLA,
Stay Prepared for Q1.
There will certainly be volatility after this Q ....IMO , I expect the mm and insti's to drag this down to 9p, possible it goes under that, whilst they are off loading warrants to a degree and shake of shares from loose hands. Keeping powder dry for the dip. News will likely to start dropping in Q1 as well.
Keep em' peeled and happy holidays to all.
GL.
Latics,
Not sure what you're saying re the rns today ? , Legal deals are complex and take a long time , See OM.
When the deal was finally concluded , RKH has then no choice but to let the market know. Which they have done.
Sam would have contravened the aim rules had he exercised just before impending material news
Given that the deal is done and the new deal allows for funds to the company upfront , it has safeguarded rkh for a further 2 years at least , by which time Sealion fid or not will have been decided.
The Large institution will be much more aggressive and Italy will no longer be able to lean on RKH with regards legal cost draining the company. There is never a certainty regarding legal matters, therefore to clear any costs for this action to rkh against Italy , leaves RKH in a better place for me.
I expect the Institution to be very aggressive in its action to recover the awards should it stand, they may / will negotiate with Italy before the hearing, 4 months is long enough put significant pressure on.
The ball is in Italy's court and their previous tactics wont work , the stay of the award had been lifted and so all is in play re seizing Italian assets.
Why would a large Insti' come on board, pay $45m upfront and further payments thereafter ?
RKH comes out clean from this re costs , with $15m in the accounts and hopefully a lot more to come and maybe enough to pay their share of Sealion.
Keep some powder dry for January and onwards , shakeouts coming.
Latics / DecidedL' ,
This is MATERIAL news for the company , directors and Shareholders - the directors are forbidden to trade before material news is reported. Had they taken up the warrants before this then you would have screamed insider knowledge, as it is Latics your earlier post re Sam not taking the warrants says it all.
Seems pretty shameless to say otherwise.
Would you trust a politition .... from any country , they say anything to get elected.
Consider the 2 lines quoted here ;'
Falkland Islanders' rights 'will be respected if Javier Milei wins Argentina elections'
Top adviser to the presidential candidate tells The Telegraph that the Islanders should have a say in their own destiny''
The Islanders either have "rights " or a "say".
So they have a "say" in their independence or have "rights " to their independence .
Till the issue crops up he will say nowt, but when it dies then the real political truth will emerge.