Member Info for Muchaboutmoney

Hey Ollie,

Clarity around:
1. Formal request for the loan ...... confirms PMO are going for it
2. Zama appraisal and what premier plan to do (sell or develop) - we want them to sell
3. Ombrina Mare - will we be receiving a windfall and how much?
4. Possible FID (depending on how 1,2 and 3 play out)

Much

Hey Carrot and I can’t disagree.

So much potential here but so far unfulfilled and I have called this far too early on more than one occasion.

That said even a broken clock is right twice a day and the next 6 months do suggest we’ll get some clarity at last.

Hey Ovets. Fingers crossed.

One point I would like to make from a Banker’s perspective is that from my experience government and government backed schemes are set up to lend and support wherever possible.

They are free from political interference and the criteria set has to apply to all applicants so if you pass them, you get the money.

The idea that a group of politicians will be somehow influencing the decision is pretty laughable as it only needs one person to squeak and you would have the mother of all scandals.

The application will need to tick all the boxes to meet the requirements. If the application hasn’t gone in yet then you can assume they aren’t there yet and that something that has been asked of them that they can’t yet deliver.

I see news of the application being submitted as being tantamount to the agreement of the loan.

The change in trading patterns on Friday suggested to me we have hit the bottom and may stat to climb over the coming weeks, fuelled by a raft of potential news.

First up is likely to be confirmation that the Export Finance application has gone in. Make no mistake, this won’t be a hit and hope application. The guys and girls putting together the application from Standard Chartered will have been working with the EGF team to confirm the requirements so by the time it goes in it will be a rubber stamping exercise based on whether the proposal stacks up and ticks the required boxes.

Second we have further Zama appraisals which I personally believe will lead to a sale of the asset by Premier once it is fully appraised. Once their lending is below £2bn, Premier can start to pay a dividend. Given the value of Zama it has the potential to bring borrowing down to sustainable levels and fund the likes of Sealion which at phase 2 stage will provide more barrels to Premier than Zama in a lower tax environment.

Thirdly there is Ombrina Mare coming down the track and by the end of year, a likely hood of FID which could be triggered by a sale of Zama or confirmation of EGF.

Expect a few buyers to emerge over the next few weeks ahead of things really kicking off in the second half of the year as we head into the home straight!

Peel Hunt re-iteration of Buy recommendation. Price target 60p

I wonder if Grey was referring to Ombrina Mare?

Does anyone know the offshore oil and gas tax rates levied by the Mexican government. My understanding is that its is pretty high and makes Sealion a more attractive proposition given Sealion produces 130k barrels at phase 2 stage ie similar production

Sabyam....... monetising Zama sorts out all their problems in one go quickly and easily. Of course they would love to develop it but they are already stretched and can’t afford to. Plus they won’t have the control they have the Sealion as they will be dependent on the other parents and a highly volatile and tax grabbing Mexican government.

The price they get may be higher or lower. Either way it sorts them out and enables them to control their destiny. They have other blocks there so may be able to develop those.

Bloobird. Some debt and gearing is positive. If the money borrowed delivers a rate of return over and above the cost of borrowing and repayment of the debt it’s a positive. It’s why companies borrow.

Regarding dividends, the whole point of buying shares is to get a share of the profits via capital growth and through an annual return in the form of dividends. If PMO start paying a dividend of say 10p a year based on distributed profits of £100m which they could do quite easily, then the yield at 70p would be a return or yield of 14%!

So you would see income funds coming into but the shares would also see a re-rating to circa 200p to bring the yield down to a more reasonable 5%. Still an extremely high rate of return with interest rates at 0.5%

Hey Ralph .. just putting my Tony Durrant hat on with a few years until retirement and thinking 'what would I do' .....

Agree Major albeit they may not need to farm out Sealion. If they go it alone total production will be 200k per day for Premier across their portfolio of producing assets.

At$60 that's annual income of $4.4bn

With Zama sold ands debt below £2bn they can also start to pay some pretty juicy dividends and we should see a re-rating on the back of becoming a lower risk and less indebted company

Pretty obvious to me what is going down here whilst you all deliberate the price of eggs.

PMO need to get debt below £2bn to enable them to proceed and also start to pay a dividend which they would much rather do than keep paying down debt.

So the way this will play out is as follows:

1. Once Zama is proved (next couple of weeks) up it will be sold raising £500 - £700m plus and reducing debt to circa £1.5bn
2. PMO will see a re-rating on the back of re-commencing a pretty healthy looking dividend once complete
3. Reduction in debt enables them to push the button on Sealion which they will have complete control of in a politically stable part of the world. PMO total production will be around 200k barrels a day by 2025 making them big league producers with income per day of £12m per day or £4.4bn per annum at $60pb enabling them to develop the Falklands to its full potential
5. PMO will take over / merge with RKH

Not long now until the paint we have been sitting and watching intensely is finally dry

Just hang on in there ......

Going to stick my neck out here and forecast what is going to happen.

Premier need debt down below $2bn to allow them to start dividends and also money to fund Sealion.

For me the monetising of Zama once it is fully proven up is a no brainer and gets them over the line in both respects.

If and when UKIF agree to fund the partner is already lined up in the form of Apollo.

Thanks to all the who were able to attend and relay their thoughts back to he rest of us.

It's clear as we have known all along that we are little more than passengers on the PMO train. It would be interesting to hear and understand the level of day to day engagement that takes place. I get the feeling that we may just get a monthly catch up if that!

With my banker hat on and having dealt with Gov lending schemes before, UKEF will support this if they can and if the signs weren't good they wouldn't have invited the formal full application.

The work we know is going on re Sealion (supply chain conference etc) all point towards this going ahead.

Sometimes it's sensible to under promise and over deliver. Remember the board want to get rich as much as the rest of us so are probably more frustrated than we are.

We'll know when something is afoot......

NigelHaemoglobin.. The World Bank gives them I think 30 or 60 days to pay otherwise assets are seized.

The Energy charter wasn't some half baked up idea that allowed debtors to walk away. Failure to pay would be registered as a state default so would have an impact on a nations credit rating.

The Italians know that so will pay.

If the payout was to be the equivalent of £225m and received within the 60 days then with 450m shares in issue it would be worth an additional 50p per share .

I’d expect us to be trading north of 80p on a successful OM outcome as it also sorts out a plethora of other questions and puts to bed the need to raise any additional cash which is a real risk in some peoples’s minds.

That could lead to a re-ratio my.

Throw in FID and then you have to be looking at north of £1.50 a share giving a market cap of £900m of which £225m is cash.

The bonus is paid to the employee, tax and NI deducted and the shares are bought on the market immediately.
They then have the choice to sell them or keep them.

They are not new shares but bought on the market from the post tax bonus.

How do I know? Because I receive them each year and have the contract nots and tax forms to prove it.

https://oilprice.com/Latest-Energy-News/World-News/Shell-Sells-Billion-Dollar-Gulf-Of-Mexico-Asset.html

Many on here have laughed at suggestions that RKH could be worth north of £5 a share or £2bn.

And yet Shell have just cashed out of 78m barrels in Mexico for $965m.

Makes you think doesn’t it........