noeasy17 Aug 2018 22:28
now back to your post - which i post below and have added responses:
Pijoe you asked four questions and it seems no one has answered them. I was going to politely ask you to answer them yourself but I'm not sure that would be wholly constructive.
Q1. Basically you asked what service provider would drill with Shorecan when they do not have the right to drill?
You:
Difference here between not having a right and not having a right, we await a signposted sign-off with DPR consent already in the bag and NNPC asking us to expand our plans. However I suspect what you are really saying here is that Arthur Millholland was in fact misleading investors when he stated the company are in such advanced talks with a service provider that an agreement could happen within four weeks. The only other cogent explanation, If that is not the case and Arthur has provided a truthful account , is that the Service Provider in getting to late stage is not aware of the position regarding permission to drill from its own due diligence. Nor for that matter is the Bank of Mauritius or Trafigura aware of the situation in agreeing a $30m-$50m facility two weeks ago.
Me:
I think the prospectus statement about having to sell the essar Nigeria shareholding make it clear the risk to the service provider to enter such a contract will simply not happen until the change of control is sorted. I have not said AH is misleading investors – however investors may have missled themselves. “could” happen ..”should happen” are different to “will happen”. Now I have not listened to his interviews (and what weight should any investor give to non-RNS’ed info?)..what did he say (as fact?). the post first oil funding is easy..afterall it is an off take agreement – the funder has the oil at the time of funds being advanced..it is nothing more or less than invoice factoring!
Q2. a) What slice of the project return would the service provider require and what's left for COPL?
You:
I am sure that you have looked at previous examples of service provision, have listened to what the CEO had to say in terms of deferred debt and the size of the stake to be taken by the service provider.
ME:
Well one could look at OPHR with fortuna..gave 66% to schum and golar (in effect a similar “services” contract deal)..and it still fell out of bed and would now appear to be dead in the water..given copl only have 80% to play with, then what is left for copl? not a fat lot left I would suggest for copl ..if 66% did not work what will?
b) Why even deal with Copl/Shorecan?
You:
Probably the same reason the Bak of Mauritius and Trafigura are doing so.
Me:
As stated above the post first oil funding is nothing more than “instant funding” for oil shipped and ownership transferred. What risk do the counter parties have? (none I would suggest). Now given the SPA would appear to be in default…why would a “service” contract not be with essar Nigeria with essar oil having taken back the 80%?
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