Member Info for Santos1

P.s The further discoveries in the NFB since Sea Lion confirm that the reservoir characteristics in the NFB are well understood by comparison with 1998-2000.

35 years of production and further discoveries lie ahead. Exciting times indeed. RKH is a poor candidate for short selling and traders- it is the amateurs who do it. There is an obvious risk of gapping up in this stock that professional short-sellers would tend to avoid, imo.

Divi says oil companies left the F.I. in 1999-2000 due to the fall in the oil price. As I recall they left the F.I after 6 wells because they had only found traces of oil. They had confirmed the presence of extensive source rock but couldn't find where the oil had migrated to. Further research based on this data led to the eventual realisation that the reservoirs were deeper in stratigraphic fan-shaped reservoirs, not in higher structural traps mapped on 2D seismic surveys. That realisation led directly to the I bn bbl discovery by Rockhopper on the Sea Lion prospect.

As for the 1998-2000 oil price fall DIvi doesn't mention that it was caused by the Asian economic crisis and mistakes made by OPEC in not quickly enough reducing supply. Things recovered very quickly however, and the oil price went up 10x between 2000 and 2010 to $100, having trebled to $30 by about end 2000-2001.

I don't think this would be a safe scenario for Divi to rely on if he trying to cover his short positions, but good luck to you anyway.

Get on yer bike- yes, sorry, you are right. Olivier's most famous role and I got the film wrong. Even pedants have off days.

Glad you said that Leo IX ! I was just about to sound like a pedant, Heaven forbid.

Port Stanley - I cant resist saying that your question ' is it back on' reminds me to re- watch ' Boys from Brazil' over the Christmas break where in the dentist chair Laurence Olivier keeps asking Dustin Hoffman ' Is it safe?' . Not sure it would be the wife's choice however.

Big Red- As a long term holder do you really care what the share price does short term? Only the traders in this chat room are worried about that. Bear in mind that there is no theoretical reason for the share price to fall just because new shares are being issued. The funds from the placement will be funding RKH's very large growth potential, not bailing out a failing company !

EG777- obviously if the loan principal amount on the balance sheet reduces, then so would the loan interest expenses in the P&L account ! ( You said that whether RKH pays off loans at the rate of £1 a year or £1 billion a year it makes no difference to the P &L account) .

I

Nikb- thanks for drawing attention to the recent Josef Schacter interview on the outlook in 2nd half 2026 for the oil price. I have just watched it. He used to be chief market strategist at the leading Canadian firm of stockbrokers Richardson Greenshields before it was taken over by a Canadian bank about 20 years ago . He has a phenomenal forecasting record on the oil price. It's fascinating that he has turned very bullish, and is forecasting 2nd half 2026 prices well above current levels. As mentioned by others on this site, lower oil prices would benefit lower cost producers like RKH, as it would shut down higher cost producers, while higher oil prices are obviously also going to be very beneficial to RKH as well. RKH is a good place to be if you want oil price exposure.

EG777 says '.....Whether RKH pays off £100m off their loan , at £1 a year or £1 billion a year, it will make absolutely no difference to their profit. Loan repayments ( aside from interest ) don't affect profit and loss . That' s not how accounting works' .

Fact Check: RKH prepares its accounts under UK Generally Accepted Accounting Principles ( GAAP). Under GAAP it is mandatory to show interest expenses on loans in the profit and loss account, as they reduce profitability. If the outstanding principal amount of the loan (s) reduces due to repayments, then (surprise, surprise) interest expenses will also reduce. That reduction in interest expense will be evident in the P and L account, by comparison with previous years. Btw, both the outstanding amount of loans, and repayments of loans, are recorded on the balance sheet.

Mirasol- Tullow Oil between 2000 and 2010 comes to mind. And US shale producers . And small companies that bought into the North Sea.

And I have high hopes for RKH.

Mirasol- the stock market is forward looking - if pledged revenue is seen to be paying down debt then future dividend flow would be anticipated and valued accordingly.

P.s. Mirasol- and remember that large oil companies start as minnows- they both pay dividends AND fund development !

Mirasol- companies can be valued in different ways eg on future earnings/ asset value calculations- and/or on dividend potential, eg using dividend discount models. Total return valuations include both share price appreciation and dividend income. There is no theoretical reason why the company couldn't both pay dividends and fund future development phases.

It's worth keeping three things in mind at this time, imo:

1. Those who have posted here that the issue of new shares means that the share price must necessarily go down are mistaken. Companies with strong growth prospects like RKH frequently issue shares with no impact , or positive impact, on the share price because the market believes the new funds will add significant value. In RKH's case the new funds add massive value to RKH, because they unlock the door to a new oil province. The fact that the market doesn't understand that yet, or has temporarily overlooked it, simply provides buying opportunities.

2. Anyone wanting an expert view on the massive potential for RKH should read Nomlkanymore ( Marlon Monkey)'s posts since August this year. For example on 26 August in the 'Norway Yggdrasil v NFB' thread he compares the NFB with the North Sea. On 27 August in the same thread he describes how Navitas 'could work its way around the NFB picking off multiple phases of production, low risk exploration, appraisal, and spend 30-50 years generating a fantastic revenue for RKH and themselves' or

'they could go faster and develop multiple phases simultaneously'. He concludes that 'the more the scale of opportunity is understood the more likelihood of farm-ins and accelerated development'.

3. The above comments give a good idea of the difficulties faced by analysts in valuing RKH. Typically Net Present Value calculations look no more than 5 years out. But some analysts like to do NPV calculations looking much further out. What is very clear indeed is that recent NPV calculations for RKH based on Phase 1 only of the Sealion project ( eg I have seen £1.40-£ 1.70 ) don't include the next 4-5 phases of Sealion, let alone all the other NFB/SFB prospects. Nor do they include multiple revenue streams if multiple phases are to be developed simultaneously. I suggest that now we are safely post-FID a good strategy is to hold the shares and top up when good opportunities present themselves- as now. There will be even better opportunities if the share price continues to slide. Sooner or later the market will start to focus on the stock's growth potential. I anticipate that the re-rating process will gather pace the closer we get to first oil. .

Blackstuff asks about statements of intent from large shareholders in AIM stocks. Basically you have to make disclosure at 3% and thereafter for every additional percentage point increase or fall. You don't have to have to make any statement of intent regarding future accumulation. So a takeover bid could come out of the blue. If that were to happen, I'm sure that RKH would be strongly fighting its corner with figures showing why future cash flows justify initial investment costs many times over.

Rolf- the sole point I was making is that from now onwards (i.e. post FID) many investors of all kinds will be making their own discounted cash flow projections, whether based on free cash flow or after taking tax and interest into account. All kinds of different assumptions will be used by different investors eg which projected cash flows from which wells should be included, over how many years, the oil price, which possible delays ( if any) must be factored in, which average interest rate etc. My simple observation was that this process by itself provides a supportive environment for the share price as the discount rate used in all these calculations will be falling as we approach production, and the start date firms up.

By mentioning a specific figure you imply you have done a UFCF valuation yourself. Why don't you set out the detailed calculations and underlying assumptions you have factored in, just as others have done on this board? That way people can assess for themselves whether they agree with you or not. However as we know from past experience with you, any challenge is very likely going to met with a personal attack. So some people understandably may consider that they would prefer to take their information from other sources than yourself.

Silverfoil- It's common in the stock market for a stock to have a temporary sell off after a positive announcement. I saw it many times when I worked as a stockbroker. There are well known stock market adages eg ' it is better to travel than arrive' and 'buy the rumour , sell the news'. When the long anticipated event occurs there is a temporary period when there is no more news to push it higher. In that limited sense FID is 'priced in'. HOWEVER that has nothing to do with the intrinsic value of the company. The core principle to keep in mind is that FID means that the project is expected to generate future cash flows to justify the initial investment costs. There will be lots of institutional and other investors over the next two years discounting anticipated future cash flows from the project back to their present value , and comparing that per share figure with the actual share price. The closer we get to production the lower the discount rate that will be used. That process is going to inherently support the share price. Also the closer we get to production the more people will start to focus on the enormous potential of a highly productive new oil province. Personally I anticipate previous highs to be eventually exceeded. As for the near term 2 year outlook I expect to see a substantial re-rating during that period with ups and downs along the way, but with an upward momentum. RKH is in my portfolio at the riskier ' high return' end, but is a large component of my higher risk holdings. I won't be selling any of my RKH holding and will be topping up when good opportunities present themselves.

If the Sun covers it I suppose we will see 'Gotcha' again at some point......

Nellius- if we were to hit £1 before FID I hope yours truly might be awarded the milk top bottle badge for having predicted that a year ago !

p.s. Please forgive me for saying that- I couldn't resist.

To be fair, the £7 pint was in a ' gastro-pub' - but they seem to be the only category of pub doing reasonably well where we live in the SW.