Member Info for rpoodle

I’m assuming that “lower cost” is simply a pseudonym for “smaller”. Premier’s plan had entailed 23 wells (of which 16 were oil producers). Navitas may want to go with a much smaller number of wells to get to first production.

I must confess to being absolutely gabberflasted at this news. Prior to today, I was holding RKH for one reason alone: Ombrina Mare. In my view, there was zero chance of Sea Lion ever happening, the company's cash position was disastrous, and it was locked in a race against time with the Tribunal overseeing the OM case--RKH may have a strong chance of success, but if the Tribunal dallied for another six months or so, RKH would probably run out of money and cease to exist. It was a very high risk bet of mine....
After today, the situation is transformed. First, Rockhopper's survival is guaranteed for some time yet--yes, admittedly, at a highly punitive 8% interest rate, but it beats bankruptcy. Equally, keep in mind that, if Navitas ever wants its money back (both for the pre-FID and post-FID costs), it will need Sea Lion to come on stream. So it will be even more in Navitas's interest to get this over the line. And there's even a sunset clause (5 years, and Rockhopper can kick Navitas out). I've been massively critical of Sam and the team over the years (and I stand by all of it), but it's also important to acknowledge successes too, and, in this instance, the RKH leadership has managed to pull a Flemish Giant Rabbit out of a kippah.
For the sake of balance, there's one or two areas of caution to note in this announcement: although the RNS is vague on the topic, it appears that the Temporary Dock Facility will be a liability for RKH and Navitas. (A decision on the dock's fate largely remains in the hands of FIG, not the oil companies.) The mention of a possible additional partner is also a concern: those who have been around here long enough will remember how Premier's decision to seek another partner for the project essentially booted Sea Lion into the long grass. Finally, the announcement is clear that Navitas will only cover two-thirds of Rockhopper's post-FID development costs, so RKH will have to find the rest (it might just, just, just be plausible though that the OM monies could cover that amount, if the payout is sufficient, the pre-development costs are lowered significantly, Italy pays etc).
All in all, though, discussion of the downsides can probably wait another day. Whisper it cautiously, but Rockhopper might actually have a future....

The Navitas farm-on was also hilariously inept. I recall at the time saying it was a total capitulation. Rockhopper gave up a development carry of $674m in return for a few weeks of carry and some promises for loans. Of course, the loans never happened and Rockhopper are now left with nothing—if they hadn’t surrendered their development carries, though, they would have Harbour over a barrel right now.
Rarely has anyone played a winning hand so badly….

On a related aside, if anyone ever does a post-mortem about the demise of Rockhopper, this was arguably the critical moment (in November 2014):
https://otp.tools.investis.com/clients/uk/rockhopperexploration2/rns/regulatory-story.aspx?cid=441&newsid=456504
Until that point, all pre-sanction costs were being funded by Premier from Rockhopper’s development carry ($707m). However, Rockhopper, getting pretty much nothing in return, agreed to “ contribute 40% of pre sanction costs, currently estimated at $100 million gross”. Premier took that agreement, and proceeded to bleed Rockhopper dry….

One final thought from me on this. I’m assuming that Rockhopper have paid tax on the cash element, but not on the development carry. If that is correct, it is worth remembering that Rockhopper did actually use a small amount of the development carry. Originally the development carry was $707m, but some of it was run down during Premier’s TLP FEED debacle. As a result, when in around 2015 Rockhopper rolled over and had its tummy tickled (by agreeing to break the dev carry into two and, disastrously, agreeing to pay all their share of the pre-FID costs), the dev carry was down to $674m. So rockhopper may be liable for taxation on that $33m. Possibly…..

Hi bloobird. I believe they already paid the tax on the cash amount (see this very old announcement):
https://www.falklands.gov.fk/falkland-islands-government-welcomes-rockhopper-explorations-announcement-on-tax/

On the due diligence point, I wrote on this topic a few months ago (see below—before I bought back in):
“As you know, I’m no longer in here, but I think Rockhopper have a strong case. The due diligence argument is, in my view, seriously weakened by the fact that Rockhopper actually made progress with Ombrina Mare’s permitting AFTER it bought MOG. In particular, and crucially, the field’s development plan was approved by the Italian ministry of environment (see below). At the time, approval by the environment ministry was viewed as the final major stumbling block to getting the field developed, as the subsequent ministry of heritage and development approvals were supposed to just be rubber stamps (informed by the environment ministry’s decision). However, the law was changed (again), and Ombrina mare became history.
Because of all of that, Rockhopper can argue that there was no environmental reason for stopping the development, and as such the decision to block it was 100% arbitrary/political. For me, it feels like a strong argument, with significant merit. How much money they can win is an open question, but I fancy their chances….
https://www.offshore-energy.biz/rockhopper-gets-approval-for-ombrina-mare-eia/ “

Let’s see what Rockhopper say today. It’s very hard to assess the consequences of the court’s decision here. The European court’s judgement will have to be retroactive for it to be worth anything—essentially, the ICSID would have to rule that the European court’s decision applies retroactively to 2017, when the case began, for it to make any difference. Clearly it’s irrelevant now as the UK is no longer in the EU. If they do decide it retroactively applies, that would be an exceptionally dangerous decision, as in effect potentially all historical judgements involving intra-EU disputes through the ECT going back to the inauguration of the ECT could be invalidated. That sounds like a recipe for chaos, to me. But I’m no lawyer. Like I said: I ld like to see what Rockhopper say on this matter.
And congrats to Glen!! Today’s announcement regarding executive salaries would never have happened without his campaign. I salute you, sir.

I’m back in for a few shares (price of 5.6p). I personally think sea Lion will never happen: that’s my view, take it or leave it, and I had that view before yesterday’s announcement from Harbour. I may well be 100% wrong, but I just want to be clear that I’m not hear for Sea Lion.
For me, the only value here is the upcoming court case. We know that Rockhopper are claiming hundreds of millions of euros in damages, and they have a decent shot at winning (otherwise they would not have been able to get a no win:no fee legal team). Of course, there’s lots of risks surrounding the case—Italy probably won’t pay, the award could be very small, or Rockhopper might lose the case.
But the reason I’m back in is because the risk:reward calculation has now shifted. At a market cap now of £25m, and with a pending court case worth up to around €300m (or possibly more), Rockhopper has a binary chance of doubling, tripling, quadrupling or more literally any day. This is a proper roll of the dice, but I couldn’t resist….

As you know, I’m no longer in here, but I think Rockhopper have a strong case. The due diligence argument is, in my view, seriously weakened by the fact that Rockhopper actually made progress with Ombrina Mare’s permitting AFTER it bought MOG. In particular, and crucially, the field’s development plan was approved by the Italian ministry of environment (see below). At the time, approval by the environment ministry was viewed as the final major stumbling block to getting the field developed, as the subsequent ministry of heritage and development approvals were supposed to just be rubber stamps (informed by the environment ministry’s decision). However, the law was changed (again), and Ombrina mare became history.
Because of all of that, Rockhopper can argue that there was no environmental reason for stopping the development, and as such the decision to block it was 100% arbitrary/political. For me, it feels like a strong argument, with significant merit. How much money they can win is an open question, but I fancy their chances….
https://www.offshore-energy.biz/rockhopper-gets-approval-for-ombrina-mare-eia/

I hate to add to the negativity, but even if Harbour do decide to proceed with Sea Lion, there’s a fairly big potential downside there too. Why? Because Harbour will no doubt want to review the (many) prior FEEDs, and likely embark on a new one (indeed, Rockhopper has mentioned that Harbour are contemplating a revised production strategy). Given that a FEED can cost tens of millions of dollars, I’d be surprised if Harbour would be very forgiving about covering the entire cost (even if that included lending Rockhopper the money to cover its share).
It all only reinforces the existential importance of the Ombrina Mare court decision….

This is all too damned intense. I decided to derisk by selling a third of my holding prior to close. However, it didn’t go through. So I’m still all in, for better or for worse. My wife is going to kill me if this goes wrong…..

This adds a whole new meaning to squeaky bum time…..

Thanks. I checked their recent presentation, and see that HE1 mention their helium being 99.999%. Something does not add up here. The prices they are quoting are for crude helium, but they say they are producing the high-end stuff. Perhaps initially they will produce only the crude gas, and as their customers increase and cash inflows grow, they will invest extra amounts in the equipment needed to get up to 99.999%. Pure speculation on my part though...

Hi Noob. Happy to chime in (I hold both DME and HE1). HE1 are planning to offer crude helium, valued at perhaps $300 per m cu ft. It will be refined up to around 80-90% helium purity.
DME are planning to go one step beyond that, by planning to “polish” the helium up to a level of 99.9% and beyond, as that price can range from $1,200 per mcf to $3,000 per mcf (or at least that is their claim). It requires extra investment to have that additional capability, however (though they claim only an extra $12m).
So, in short, they are both refining, just not up to the same levels of helium purity. One interesting question is whether HE1 would ever want to do this as well—namely, “polish” the helium to above 99.9%—assuming exploration is a success.

I believe BW Offshore had an FPSO or two that were offline and could be used second hand. Check out Umuroa.

Hi Daikihaku. Very generous words; thank you.
If Rockhopper win the OM case, and replace the leadership, I think they’ll be fine. With money in the bank, and an active and capable management, anything is possible. If the current management remain in place, however, the only conclusion is that, without OM they will go bankrupt relatively soon, and winning OM would only delay that date somewhat.
Anyhow, I’m done here. I sold up again a little while ago and have had far more luck over the past year and a bit on other investments (I discovered DME in the helium space in early 2020, happily).

Buzz. God knows how you can defend that pack of useless a$$holes. I’ve neither the time nor inclination to go back through all my old, old posts. If I recall, though, I was a lot happier when the Egypt purchase went through after the initial delay, as the cost went down and there was no need for dilution. Devon Energy did Rockhopper a big favour...
Anyhow, the point is that Rockhopper were forced to sell because they had crapped the money down the toilet. Some items to ponder:
- they spent £29m on the Italy assets. Couldn’t develop the main prospects (monte grosso and OM) and eventually tried to “sell” one of the remaining assets (Civita, basically) to Cabot. Except they were actually going to pay Cabot $1.6m to take Civita and some useless junk off their hands, because Rockhopper had taken on $9.5m of decommissioning and abandonment costs with that unwanted acreage as a result of the Italian purchase. And of course the deal fell through. So, in case you weren’t aware, Rockhopper have $9.5m of abandonment costs at some stage to take care of. And how long will Guendelina be producing for? And Civita? And how much are they producing? No, me neither, as Rockhopper are not telling anyone. And the decommissioning costs (especially on Guendalina) will run to plenty.
Put simply, that one Italian purchase has a high chance of bankrupting Rockhopper. And they’re not being even slightly open or transparent about it.
I could go on and on—anyone remember the huge 3D survey on licenses 23 and 24? I’d guess it cost upwards of $10m. Did we ever hear anything about results? Nope; nothing. They just walked away.
And how many contingent liabilities did they take on when they bought FOGL (who had net cash of minus $8m, but also had not finalized the enormous cost of the disastrous Humpback well)? Who knows? They never told us.
Like I said, I could go on and on. Rockhopper’s management are utterly incompetent and completely disinterested in their shareholders. Five ‘em hell boys....

More evidence of the Board’s idiocy
https://www.lse.co.uk/rns/UOG/asd-1x-test-and-notice-of-commercial-discovery-p4zxzggvjxgw6h0.html

It’s worth noting, however, that DME did not provide any info on helium content of that gas for a few months later (as they waited for the cement to dry, brought in a completion rig, took samples, and had them tested) . But Helium One may well be able to release news regarding gas shows during drilling (and pay zones after TD), as well as resistivity (ohms), and, maybe, if there’s helium in the mud, they might share that too (which I imagine would send the share price sharply north). Given that this is 100% Helium one’s well, I’d expect them to definitely release more news than less, so it’s gonna be quite the ride....