Member Info for pijoe1212

All positions and trades aside, I would like to look at facts - So far there has been 500 million spend on this venture and its only worth 186 million. That is a huge value destruction ! For 8 years we hear the same generic garbage "We are making progress to first Oil" As yet there is STILL NO REAL money on the table to get this Oil out of the ground! Noises seem to be positive, but still nothing concrete. Are we being scammed ?
I would address your question and comments as follows:
“£500M been spent on the (oil in fkl) venture?” Yep looks like more than that to me if you take pmo and rkh (and others) expenditure todate. Rkh has $432M of capitalised costs on the balance sheet at year end (lets call that $400M to FKL assets between mates).
“Its only worth 186M”. I assume you mean rkh is capitalised at £186M. lets call that $250M in round numbers. Looks like it is.
“Is that a huge value destruction”. In many (most) ways I would agree that is value destruction from a shareholders point of view who has invested over the full time of expenditure.
“We are making progress (type comments)”. Yep I would agree. I think the oil price got in the way, but that does not deflect from your comment being correct.
“No real money on the table”. The thing with all finance transactions (funding in this case), the money is never on the table until its on the table! In other words LOI / MOU’s are normal right until financial close (preceded by technical close on the tech details that underpin the finance close).
“nothing concrete”. Agreed and I would put to you that until financial close that will remain the case.
But hears a few views the other way:
Is the SL oil worth the $400M on the BS? Yes if it is produced. The write back policy of non-cash BS impairment to asset is not something we can know at this stage (i.e. all written off against phase 1 or over the full production profile). Either way the $/ bn is low. (one can work to a metric of say $2 to $5/ bl finding costs to majors to get a comparison). But that does not take account of the dev carry value. So in other words further capitalisations of expenditure (which are then expensed back through the p&l during production life) will be more limited by the carry.
Would you buy your share of an oily asset for $250M against an expenditure of $400M? um yep..sounds like a good discount to me! In other words buying now (or lower as I did) means other shareholders have funded the asset I am buying.
So “ are we being scammed”. Not in my view. The history is clear to see and the reasons why we are where we are.
Is rkh worth buying.? Yep in my view. We have a number of downside risks:
- oil price
- pmo funding ability (this is nothing to do with shareholders and all to do with pmo covenants on the debt and the extent and timing of the debt pmo need to sanction). I have posted before I think the drilling phase is the key one for pmo to put in cash.
- FIG doing all required (infra-structure / tax rates etc).

lb.. sorry but as someone who will question hur valuations.."£1bn of speculation" is, in my view, more than slightly over doing things...

(JK1...lol..um...to use a phrase not often found on this BB.."do i smell trousers cut above the knee burning?"..)

ADUK....that post made me laugh out loud good and proper..

funnily enough i know very well this (or any other) BB is not a support group to you! perhaps i should have mentioned you earlier, as at times and from some peeps you get a blasting for: overly long posts / responding to each post etc...

what did you expect to hear? i thought there was an outside chance of more..but not a high chance!

you sure it is pmo / rkh progress that is at fault or your expectations?

filter tab just below "share discussion for rockhopper"

response to your comment.

i agree re the support group!

i also agree re the sp action is more comparable to larger oil co's (as it is one for a start!). and that makes it easy to hold large positions (all are relative to total portfolio size). important to note that some (such as pmo / tlw / enq) are heavily geared to oil price so more volitile. hur is not geared in the same way, and neither are rds / bp etc.

i dont think it is languishing. i keep coming back to my question..what is the market pricing currently ? full EPS value (nailed on dead cert, and worth about £1bn on a comparator basis / NPV basis) and limited value for the 2C (about £300M)..or discounted EPS value and something more for the 2C...we will never know of course as fact..but it is the key question as foil approaches. if it is the former then uplift at foil will be moderate (perhaps?), if it is the latter then more marked..

of course all such thinking goes out the window if oil price takes off (which it may do given the us madman's involvement)

i would not call £1bn Mcap valuation (plus the conv bonds) "languishing" for an oiler with (at this point in time) no production....

thks...i would suggest you / me and wellwell come in for much stick on this BB simply due to confirmation bias - we express our opinions with honesty and when that is not 100% positive it is taken as a negative.

i have posted before that i have come to learn (sometimes the hard way) that listening to peeps not invested (or are outright negative) who explain their views with rational thinking can be one of the most important aspects to refining ones own thinking. to be clear i am not invested as i see better opportunity elsewhere (of course i could be wrong) but that does not make hur a bad investment. far from it. if all goes to plan (which it will not, but so long as the direction of travel is forwards overall) holding shares in hur looks like a very good long term investment to me as fuller value is realised. but between now and then it will not go up in a straight line and opportunities will arise to move in and out and of course other stocks are equally offering opportunity (which also will not go up in a straight line!)

O/ T: re the "worry the ef'in project into submission". i learnt this very early in my professional carer . 6 number 12MW V16 600rpm diesels 25M from a housing estate - needed concrete blockhouse / 10 ton exhaust silencers / monster inlet silencing (the turbo chargers needed a 2Mw electric motor to run them on works test!) etc etc. great it all worked first time. still failed the night time witnessed noise acceptance test when someone used the gents and the xplaire toilet extract came on....

AD.

there's a saying i use often in my day job - "worry the ef'in project into submission". is ricfle not doing just this? not that any of us can answer the question, but gathering opinion is perhaps the only thing one can do (short of a ultra high speed doctorate in all matters resi related and breaking and entry so get at the data room..). of course one has to review and balance the responses in the knowledge of ones own and the other parties confirmation bias!

it was me who raised the issue of confirmation bias. i 100% agree it cuts both ways. by default of course it applies both ways as it is fundamentally giving more weight to evidence that supports your current view than evidence that counters your view.

i am sure you accept i am not posting to "deramp" or the like - i remain very positive about hur and will i am sure be back invested at some point (unless it gets taken out first!), but as posted before i see better opportunities elsewhere at this point in time. meanwhile i watch and participate.

i agree the GOR would in the worst case only impact production rate, and ultimately unlikely to be an issue on valuation, but the market (as apposed to the large oil co's looking to buy in) is not always rational on such things in the interim. the wax issue has been discussed many times, but i agree there is the upside potential. i can not make much further comment about the depletion risk, other than to note it has to be there. in effect Doc T has acknowledged this is the key risk that has prevented a sale to date. i think the risk also needs to be considered against the value kero (for example) would likely be looking for. taking $5 /bl as a tempting number to kero (?) even a very small risk is material to a purchaser.

statements from RNS's is fact not nonsense.

coral-part

is this a clue? "This is high stakes Texas Holdem with the prize beyond the imagination of man."..

LOL

i have not posted false info.

we will see who is correct on a placing in the next 4 months - me or you. at the current time it is a matter of opinion, but it will become a matter of fact.

i see the early depletion risk as very low to not really being in my thinking. as wessexmario says the pi is very (!!) good. but i am not an expert is such matters. to me it would be a "black swan" outcome.

seadog5 . i have never questioned the auditing of the accounts. it is a statement of fact the year ends are audited and the interim's are not. that is normal and not something i have commented on. so what are you on about?

i have posted no false information. i am sure all can look at the published accounts and do the sums on cash available and cash burn.

i would suggest the issue is not rkh's commitment to SL or that the market did not believe the bank would be appointed (i.e. both are priced in), but with pmo's ability to proceed. as i have posted before i think pmo have put out mixed messages regarding farmout being required. so i would suggest until it is clear what pmo's real intentions are (and as a secondary the deal on the rkh carry) we will not get any big movement. but i would expect it to underpin the sp to some extent.. (we are now in the summer trading drift zone however)

far too low!? it depends how you measure it. i would take 17,000bopd stable production after say 6 months post foil as a good marker of success - gives doc T 6 months to gather his data (and we all know he loves his data!).

on that basis i would guess (gut feel!) more like 90:10. key risks to me are (other than all the normal capital project risks) GOR and wax, but esp the gor.