Member Info for pauldrayton

What do we think then? Ex environment secretary but also used to work for Shell! Will she back Sea Lion? Or has the decision been made already anyway? I think so personally.

Thanks Auson

So following the reshuffle which minister deals with UKEF? Or is it separate from ministerial control?

Any reason for the subsequent drop?! And PMO's drop this morning?

More coronavirus?

You can see Diamond Offshore's rig fleet status here (updated yesterday):

http://www.diamondoffshore.com/Documents/Rig%20Report/DOFleetStatus.pdf

I simply say things as I see them Nigoil. I'm hopeful at the moment that you're right about Sea Lion FID & sanction this year. My recent discussions with both RKH & PMO investor relations suggest that both are confident about funding although I have no inside info other than what they're prepared to say to a private investor. I think UKEF would have said by now if they weren't prepared to back the project and as you say Navitas have friends in the right places. The Zama unitisation issue and current oil price slump are the flies in the ointment at the moment but with a bit of luck they're not going to stop a project that has been worked on for years now and that won't produce oil for a few years either.

If 2020 is going to be transformational for the company it would be nice if the bickering and pointless posts on this board stopped and everyone put forward sensible ideas and thoughts (be they negative or positive). It's been a total shambles for a long time now.

Haha, fair enough! Ocean Valiant maybe. Although I remember somebody else a long time ago saying it would be Ocean GreatWhite.

Nigoil if I remember correctly you suggested it might be Ocean Endeavour. However Diamond Offshore list that rig as under contract with Shell until Q4 2021 - making Rhea being drilled by May 2021 impossible.

Have I missed something?

Thanks for the thoughts guys. It’s also in the back of my mind that PMO wouldn’t have been messing around with UKEF for 2.5 years now if they hadn’t been given very strong indications that it would be approved.

Anyway we should find out soon enough.

Nigoil, you mentioned several times (seemingly correctly) that FID was delayed for two reasons, one of which was PMO's sale of Zama. Whilst the bids are in and negotiations are ongoing, it does appear that the final sale will be delayed until there is an agreement with Pemex regarding unitisation. Do you believe this will have a knock-on delay for Sea Lion FID or are the two not intrinsically linked anymore in your opinion?

Thanks cyan, in a funny kind of way the oil price blip now makes it more likely that we will see higher prices in a few years. And I don't think either PMO or UKEF will be putting the coronavirus into their medium term pricing analysis anyway.

Whilst it makes investors nervous and hits the share price, it doesn't sound like it's affecting the funding process.

I don’t have any inside info but I did have some interaction with PMO’s investor relations today who informed me that they are not seeing any impact from the current Coronavirus-led oil price drop on either their Zama sales process or on Sea Lion senior debt funding. They pointed out that Sea Lion has a breakeven of $40/bbl anyway so the project economics are strong even at these prices.

Regardless of today’s price, I’m guessing they see this as a short term blip & oil companies make decisions on a wider macro level and a much longer timeframe anyway.

Ok thanks, it’s just when I asked PMO about it they said there was no legal link between unitisation and their sales process but I suppose that may have changed. Is anybody able to copy and paste the full article? Can’t be bothered to subscribe!

Have PMO confirmed this or are you speculating Bladesman?

Yes marlon was a huge asset to the bulletin boards - a lot of good characters have disappeared unsurprisingly during a period of inactivity but I reckon marlon will be back once there is a rig back in the Falklands. Shame that the interactive investor board got ruined.

I have no idea if Nigoil is correct or not about Arg, but if they are planning to drill Rhea within the next 18 months then that suggests the other phases of Sea Lion are likely to be accelerated. Why drill an exploration prospect when there are two more phases of Sea Lion to drill first? Plus Isobel is likely to be just as big as Sea Lion. They have plenty to be getting on with without Rhea so if that’s being considered then perhaps the other phases will be brought forwards too.

Be interesting to see if and when we get further information.

Nigoil,

Does the BoD have an indication of the number of swallows migrating from Africa? Have they been told by the bird watchers how many are on the way? Or are they still guessing at this stage whilst the bird watchers count?

Thanks.

Of course the BoD have to take some responsibility for the share price decline. At the end of the day the share price now is a third of what it was when the Ocean Guardian set off for the Falklands! Unbelievable really. The choice of PMO as a partner was a mistake, and their investments (particularly MOG) during the downturn turned out to be pretty awful when there were many better opportunities out there.

However they have kept the ship afloat during a tumultuous time for the oil industry whilst many other companies haven’t survived. If they manage to get something significant from the Ombrina Mare case then that will make the MOG acquisition look less bad, and if they get to first oil with 35% of some pretty large licenses which contain a lot more oil than just Sea Lion then that will have been a good result for shareholders, particularly those getting in at this stage.

Plenty to do & the next few months are key now. Let’s hope the Navitas deal happens & funding is sorted to get to FID. Until it’s all signed off the doubts will remain.

Mogger is the person to ask but I think the court has 120 days from the court hearing, which was on 30th October. Which means by end of Feb, although it could come sooner. I think they also have the ability to delay it by 60 days in certain circumstances which would mean end of April at the absolute latest.

Cont:
•Finally, and importantly, bringing in a new paying partner should materially increase the likelihood of finally securing the project financing an unlocking the value in the asset.

The risk of premier being simply unable to deliver the project absent a farm down and a re-work of the commercial arrangements was high, which in Rockhopper’s view explains in large part the share price of the company.

The company firmly believes this transaction strikes the right balance between maintaining a very material stake in the asset, reducing the financial risk to Rockhopper and facilitating the entry of a new paying partner thereby significantly increasing the likelihood of the project being sanctioned.