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Absolutely Ovets and yes there is the entire document that fellow posters on the board can read if you like to take the time over the Christmas break. It’s well worth the investment of time.

As you rightly say, this has been posted before and discussed however over the next couple of months it’s going to get increasing focus and interest.

Personally I’m betting on £250m or a per share value of 55p on top of the current price on the back of this.It will also of course ensure our financial future which should provide additional upside.

My best guess is a minimum of £40m for the costs and £250m for loss of future profits less the legal fees (no win now fee) however there is a chance that this could be reduced by 50% if the Italians are able to prove that Rockhopper failed to undertake true diligence during the takeover as at this time the Italian Gov had already commenced legislative changes which sought to ban oil development within 12 miles of the coast.

Rockhopper vs Italy – How an oil company could make millions with wells it never built
Since May 2017 UK-based oil and gas company Rockhopper has been suing Italy over the state’s refusal to grant a concession for oil drilling in the Adriatic Ombrina Mare field. The refusal came after the Italian Parliament banned all new oil and gas operations near the country’s coast in 2016 amidst concerns over the environment, high earthquake risks, and strong opposition to the projects from residents. Rockhopper claims compensation for its sunk costs of about US$40 to $50 million – and for the US$200 to $300 million which it could have made with the oil field had it not been banned.

The case is intriguing because it shows how the ECT can be used to…

… circumvent public opposition to dirty energy projects: The Italian Parliament’s ban on new drilling projects near the Italian shore followed a decade of protests and campaigning by residents in many coastal regions of Italy. In April 2013 around 40,000 people – “from the Catholic church to rasta-haired youth groups, from the local tourist industry to coastal mayors, regardless of their political affiliation” as campaigners described it – took to the streets in Pescara to protest against the Ombrina Mare project. They could now pay a high price for having pushed the Italian Parliament to halt new climate-wrecking oil drilling.

… sue countries after they have left the agreement: After being hit by its first multi-million euro claim under the ECT, Italy announced it was leaving the treaty at the end of 2014. Rockhopper led its ECT claim against the country 27 months later. This is possible because of the deeply anti-democratic survival or ‘zombie’ clause, which allows the ECT investor rights to live on even after a country has pulled out of the treaty. For investments made before Italy’s withdrawal took effect (on 1 January 2016) the country can still be sued for two more decades under the ECT, ie until 1 January 2036. So while the country is already the second most sued state under the ECT, and despite having left, Italy could still be subject to many more claims.

… let deep-pocketed financiers put extra litigious heat on countries:
Rockhopper’s legal costs are funded by an unknown litigation financier who will cash in a share of the eventual award.29 This allows the company to draw out the proceedings, increasing Italy’s defence costs and making the country more likely to cave in to corporate demands. As such funding arrangements do not have to be disclosed in ECT- proceedings, potential conflicts of interest an arbitrator might have due to ties with the funder might never be un-earthed.

So with 2019 now just a few days away, we now get the opportunity to turn our attention to what could be an extremely renumerative piece of legal business which is likely to leave Rockhopper with a windfall running into hundreds of millions of pounds.

As such and for information, here’s a summary of some of some of the Energy Charter Treaty features before anyone comes up with the ‘Oh the Italians won’t pay line’ .....

Features of the ICSID Convention

The ICSID Convention provides the basic procedural framework for conciliation and arbitration of investment disputes arising between ICSID Member States and investors that qualify as nationals of other Member States. It is a treaty among Member States establishing an independent, impartial and self-contained system.

ICSID proceedings are delocalized from domestic procedures. This means that local courts do not intervene in the ICSID process. Some implications of the self-contained system and other main features include:
Awards in ICSID Convention arbitrations are final and binding, and may not be set aside by the courts of any Member State (Article 53 of the Convention).
The limited post-award remedies available are set out in the Convention itself (Articles 49 to 52 of the Convention).
All Members States, whether or not parties to the dispute, recognize and enforce ICSID Convention monetary awards as final judgments in any Member State (Article 54 of the Convention).
Once disputing parties consent to ICSID arbitration and unless they agree otherwise, they accept ICSID arbitration as the exclusive remedy (Article 26 of the Convention).
A Member State cannot give diplomatic protection to any of its nationals which have consented to arbitration under the Convention, except in limited circumstances (Article 27 of the Convention).
The place of proceedings, i.e., where hearings are held, has no legal significance in Member States (Articles 62 to 63 of the Convention).
Participants enjoy immunity from legal process in the conduct of the proceedings (Articles 21 to 22 of the Convention).
There are several essential jurisdictional conditions for access to arbitration or conciliation under the ICSID Convention (Article 25 of the ICSID Convention):

The dispute must be between an ICSID Member State and an individual or company that qualifies as a national of another ICSID Member State.
The dispute must be a legal dispute arising directly out of an investment

Interesting situation.....

If you chart RKH and PMO over the last 12 months they literally move as one.

For some time I have been unable to explain why with all the contracts and FID getting closer and closer we continue to fall however I just think I may have the answer to what will make them break their eternal embrace.

I get the feeling that the market fears sanction of Sealion and is therefore marking down Premier ahead of this. As the share price falls it takes Rockhopper with it.

Once we get the announcement I would anticipate a de coupling of the share prices with RKH taking off and Premier doing its own thing.

My betting is still that Premier intend to monetise Zama and in one move sort out their debt, the funding for Sealion as well as being able to re-start dividends.

It would all make perfect sense.

I remain extremely excited about 2019...

Oilfieldhand totally agree. I've had numerous run-ins with said individual (s) and am 99% sure they are 1 and the same deluded individual (s)

Like Nigoil I never normally filter as all opinions, ideas and info is useful and helps to increase our knowledge and understanding of our investment and the factors effecting it. However I think Ralph and Fawgawdsake probably do need their oxygen cutting off so will similarly be filtering so that focus can be on value adding rather than detrimental and derogatory posts.

Much

Hey Ralph,

Post Brexit Lloyds look like the bargain of the century and probably worth double what they are trading at now.

Core holding for me too with my position averaged at 52p.

Comertoes ... happy for you to put it on my tab! :)

Great post Ropug but a market cap of £250 - £300m on sanction?

I think you can comfortably double that looking at the value of others who are sanctioned with nothing like the potential 30k barrels per day we'll have once we start pumping.

My guess is £1 on FID, £1.50 on sanction, £2.00 on a successful Ombrina Mare and £5.00 on a successful Isobel re-drill as part of the development.

With production imminent and oil at say $75 I would expect this to be £8 plus. A £3.5 billion company making £300m a year is not a stretching valuation. Phase 2 and Isobel provide plenty of upside even from there.

Hargreaves Landsdown have a Market Cap of £9 billion on EPS of 50p odd and profits of £200m! Even if we trade t a 60% discount to them, we will still all be millionaires!

This will get FID and sanctioned. This is what gets me really excited on a 5 year view and its the kind of thing Premier will be considering, not just the price today. Could be the perfect storm. A supply shock is coming in the 2020's...

https://oilprice.com/Energy/Crude-Oil/Is-It-Too-Late-To-Avoid-An-Oil-Supply-Crisis.html

Premier will prove up Zama and then either farm down or realise the asset.

Once completer they can pay down their debts to below £2bn, resume dividends and focus on Sealion with our interference from any other party.

By next June we'll know. Regardless, Ombrina Mare is potentially worth 40p a share so this price is crazy but in this market anything goes currently.

Just wish I had held off from buying at 38p 6 weeks ago .... grrrhhhhhh

Hey Surfit

This isn't specific to RKH in my opinion. RBS down almost 10%, lloyds down 5% at 6 year lows, sterling in free fall and May's premiership close to collapse. Chart our shares against Premier and the two are entwined like eternal lovers.

We're in a market which is looking to sell off anything that isn't perceived as good news. Nothing changed so far as I am concerned except that I'm £7k worse off across my portfolio than when I awoke this morning!

That said I'm happy with the companies I hold and if I had spare cash I would be buying them all today at these prices. Market needed a reason to correct and it's doing just that and its pretty indiscriminate. Yes it hurts but as Warren Buffet said ...

“If you aren’t thinking about owning a stock for 10 years, don’t even think about owning it for 10 minutes.”

Investing is not trading and has a vastly different goal, as trading, when done well, is about taking measured risks for discrete periods of time at sufficient volume as to generate profits, and typically involves wild swings in profitability. Investing is about minimizing risk to generate wealth over the long term, not generating short-term profits. Another great Buffett quote in this vein: “The stock market is designed to transfer money from the active to the patient.”

Premier's debt reduction this year was broadly in line with its target of $300-400 million and Chief Executive Tony Durrant told Reuters he saw net debt reduction next year in that range as well.

When asked when Premier might reinstate dividends, Durrant said net debt below $2 billion would feel "comfortable" but that payouts would have to be weighed against investment in growth in Mexico, the Falkland Islands and Indonesia. The company has not paid dividends since 2014.

Premier is starting drilling later this month to appraise its resources in Mexico's huge Zama field and expects results on the extent and depth of the reservoir as well as flow test data in around a hundred days, Durrant said.

"Premier remains our preferred Brent oil price play providing leverage to strong oil prices through debt reduction and accelerated use of UK tax losses," RBC said in a note.

Premier has hedged around 30 percent of its output at a price of $69.1 per barrel for the first half of next year and $72 per barrel for the second half, it said.

Frankly I'm stunned at the fall today but there you go. Just wish i hadn't't filled my boots a few weeks ago at 38p. I could have bought a third more for the same money! It's simply patience here .. not if, but when.....

Agree Frank. Continues to be a question of 'when rather than if' with the language moving to signing contracts at sanction.

I'd rather wait another 3 months and ensure due diligence than rush it. Would have been nice to have received a more concrete timescale however clearly getting Tolmount pumping is their priority both logistically and financially.

Come the New Year I would imagine Sealion will then move to the top of the pile given Zama is going to take some time .

Someone came in after the market closed and said thank you very much for all your shares at circa 30p.

Did anyone else notice all the trades today for 29 shares, 46 shares, 18 shares etc? Very strange. What the hell is that about?

Tomorrow will be interesting, Thursday even more so. Here comes the sun! Lol

Some quotes from the great man himself Warren Buffet .......Make Long-Term Investments Over Short Term Ones

“If you aren’t thinking about owning a stock for 10 years, don’t even think about owning it for 10 minutes.”

Investing is not trading and has a vastly different goal, as trading, when done well, is about taking measured risks for discrete periods of time at sufficient volume as to generate profits, and typically involves wild swings in profitability. Investing is about minimizing risk to generate wealth over the long term, not generating short-term profits. Another great Buffett quote in this vein: “The stock market is designed to transfer money from the active to the patient.”

Hey Lost the plot. We're all in the same boat here. It really doesn't make sense however, what you are feeling is in itself why the shares are falling. This is driven by sentiment and nothing else.

Volume is incredibly low each day and the sales that are occurring are small and probably retail investors like us who have finally thrown in the towel. We're human beings and feel the same thing. With the falls occurring and almost 8 years having passed since the discovery they are cashing in their chips.

Remember the darkest hour is often just before dawn .......trading update from Premier on Thursday and we could be inhabiting a completely different universe.

Oh and thank you for what you did on behalf of our great nation all those years ago. Without you none of us would be here as the Falklands and the oil would no doubt be being developed by the Argentinians.

No links but anything north of $65 was considered a no brainer

It's an interesting one. 1 share trades often come the day before an RNS. I have often seen it confirmed but equally you often see these trades and no RNS occurs.

I like the fact that there is some BOT trading going on today and its on the buy side. You can identify these by the fact that a number of trades will go through at an identical time

You’re right Carrot. They aren’t the same but then every company is different. We’re further away from production but when we do it will be far more than Serica.

My point was that stocks are taking off with the right news.

It is exceptionally low volume though Comer. I just can’t help but think that on any news and some big buying, there just isn’t going to be any stock around and the price is going to rise inexorably.

Hopefully we’ll get to find out soon!