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LIQUIDITY, COUNTERPARTY RISK AND GOING CONCERN - https://otp.tools.investis.com/clients/uk/rockhopperexploration2/rns/regulatory-story.aspx?cid=441&newsid=1512949
The Group monitors its cash position, cash forecasts and liquidity on a regular basis and takes a conservative approach to cash management, with surplus cash held on term deposits with a number of major financial institutions.
At 30 June 2021, the Group had cash resources of US$7.1 million (unaudited). Following the sale of Rockhopper Egypt Pty Limited in 2020, the Group generates limited revenue and cash flow from the sale of oil or gas.
Historically, the Group's largest annual expenditure has related to pre-sanction costs associated with the Sea Lion development. However, following the announcement by Harbour of its intention to exit the Falklands, the Company will have greater control on the level and timing of future expenditure on the Sea Lion project.
Management has also considered a number of downside scenarios, the most significant being one where decommissioning of certain physical assets (principally the Temporary Dock Facility) in the Falklands is required. The Group would be liable for its 40% share of these costs with no funding support from Harbour and/or Navitas.
Under the base case forecast, the Group will have sufficient financial headroom to meet forecast cash requirements for the 12 months from the date of approval of these consolidated financial statements. However, in the downside scenarios, in the absence of any mitigating actions, the Group may have insufficient funds to meet its forecast cash requirements. Potential mitigating actions, some of which are outside the Group's control, could include collection of arbitration award proceeds, deferral of expenditure or raising additional equity.
Accordingly, after making enquiries and considering the risks described above, the Directors have assessed that the cash balance held provides the Group with adequate headroom over forecasted expenditure for the following 12 months - as a result, the Directors have adopted the going concern basis of accounting in preparing these consolidated financial statements.
Nonetheless, these conditions indicate the existence of a material uncertainty which may cast significant doubt on the Group's and Company's ability to continue as a going concern. The financial statements do not include the adjustments that would be required if the Group and Company were unable to continue as a going concern.
looking at the Annual report 2020 looks to have cost them 1.225mn every quarter given there is pre 2020 costs in there(350k per quarter) and admin of 400k a quarter and 600k of cost of sales - the run rate going forward could be less and they could last the whole year without any one off items... who knows
The company had retained cash of 7.1mn USD in June last year looking like 5.2mn end of december and taking that run rate looks like will be at 1.4mn in June at a point where they could fund raise? you would wonder would navitas take a stake in this or what would happen ???...again complete speculation
I have gone through 12 previous cases at the ICSID that got to the stage of submitting costs and linked the cases below. The average time for submission of costs to award is 5.5 months - given that the costs were initially submitted last march and re submitted for updated costs post italys request to have the case thrown out in january, Taking the median of these dates and running the 5.5 month average gives you next week as award date. Again a fairly ungrounded excersize but would suggest that the award is due soon and not another 10 months away albeit anything is possible with this company.
Rockhopper case
https://icsid.worldbank.org/cases/case-database/case-detail?CaseNo=ARB/17/14
Previous cases
https://icsid.worldbank.org/cases/case-database/case-detail?CaseNo=ARB/18/48
https://icsid.worldbank.org/cases/case-database/case-detail?CaseNo=ARB/18/15
https://icsid.worldbank.org/cases/case-database/case-detail?CaseNo=UNCT/18/5
1 https://icsid.worldbank.org/cases/case-database/case-detail?CaseNo=ARB(AF)/18/3
3 https://icsid.worldbank.org/cases/case-database/case-detail?CaseNo=ARB(AF)/18/2
4 https://icsid.worldbank.org/cases/case-database/case-detail?CaseNo=ARB(AF)/18/2
5 https://icsid.worldbank.org/cases/case-database/case-detail?CaseNo=ARB/18/4
6 https://icsid.worldbank.org/cases/case-database/case-detail?CaseNo=ARB/17/45
7 https://icsid.worldbank.org/cases/case-database/case-detail?CaseNo=ARB/17/43
8 https://icsid.worldbank.org/cases/case-database/case-detail?CaseNo=ARB/17/38
9 https://icsid.worldbank.org/cases/case-database/case-detail?CaseNo=ARB/17/36