Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
We have got some really good people in this business now..... plus world class partners.
One other point to add on Newfoundland, it appears G2 Energy wanted to extend their option, but we chose to allow it to expire to retain our interest. So they must have an alternate plan for it. Plus they talked about wider infrastructure and development with the last GHs update. They also talked about a consortium approach.
I still think Newfoundland could present a profitable opportunity for us, and that will complement assets in the North Sea, Celtic Sea and Brazil very well. I think this company have achieved far more than they have currently led on, and are really at the forefront of delivering a variety of projects. I can see maybe 3-5 projects closing this year, and even as much as 5-10 by end of 2020. It sounds crazy I know by the fact we are pushing everyone's patience far beyond limitations for the first one.
Brazil... could happen any day.... there is a link to the Polvo filed too for further development, there might be something we can do with Azul too.
We are told about other inquiries for opportunities in Brazil and with Royal Eagle other Latam
North sea... there must be at least one GTW project... deliver the first and i reckon 1-2 more could soon follow.
H&D - This could progress out of the blue... and the chairmans statement talks about it leading to further easily repeated small projects.
There is talk in the chairmans statement of "small pools", and a slide in the AGM presentation on hubs.
There are opportunities that Aker brought to the table which are so far unknown
Does Graham have opportunities through previous work that he might have brought to the table?
The chairmans statement talks about a number of proposals submitted.
Because of our unique strategy with the use of our consortium partners, out ability to handle multiple projects will far outway companies of similar size. I am pretty sure our partners are not in this for just one project each.......
This is just waiting for one event to spring into life IMO.... and when it does, over the next few years, we can really see a very lucrative and diverse portfolio being built.
Read the OGA report and do some wider research.....
The point with GTW and marginality, is the use of existing subsea and other infrastructure changes the marginality conditions because it reduces upfront capex and provides a direct route to an existing market. Weigh up the cost of transporting gas to shore and to market vs conversion of gas to power at source and direct into a nearby grid.
A growing offshore wind infrastructure, provides a wider network of a route to market. More wind infrastruture means more stranded gas assets available for GTW. Stranded assets may only need an additional 15km or so of sub sea to connect to an existing wind grid, rather than 100,200 + km. Big cost saving, upfront and decommissioning. There can be 60% spare capacity in the grid.
https://www.ogauthority.co.uk/news-publications/news/2018/offshore-gas-and-renewables-could-partner-in-power-generation/
Not really speculation..... It's just not happening as quickly as PIs, including myself, would like, or the company would like for that matter.
There is a clear progression of communications indicating advancement of projects.. Here's a sample of recent comms. Sounds to me like a company with a awful lot going for it.
21 Feb 19 - Agreement with Royal Eagle opening up wider Americas market. "great opportunities that, working together, we will be able to bring to fruition"
12 Feb 19 - Siemens, one of the largest engineering companies from Siemens Head - "we believe that the untapped potential of these assets will be realised"
8 Feb 19 - Excellent interview with Chairman
30 Jan19 - Former CEO is "pleased to increase his shareholding"
25 Jan 19 - AGM well represented by the company. Talking about delivery as a priority. Explaining the commercial benefits and significance of GTW. Confirmed Brazil still very much in play with an attractive proposition for shareholders.
25 Jan 19 - Marnavi - GTW initiative announced "There are compelling reasons to adopt this approach on the projects we are currently pursuing and we are working hard to conclude the final elements that will allow us to move forward to delivery"
24 Jan 19 - New Chairman with impressive record of delivery "These companies and their management have worked creatively and hard for a number of years to position themselves at the forefront of marginal developments "
28th Dec - Results.
build a portfolio of low risk, highly appraised marginal assets
Recent enquiries provide directors and management with confidence regarding the viability of the business model and provide confidence that the Company can add further projects to its portfolio
The Company has made progress on several projects this year and we are excited about the opportunities that lie ahead. Activity has increased in MFDevCo and we look forward to updating the market as it acquires projects and concludes investigations into alternative marginal field commercialisation methods
We continue to negotiate a number of specific opportunities at different stages of the 'commercialisation cycle'
have submitted proposals which are being considered
Our marginal field proposals span a range from larger scale opportunities to more standard repeatable and smaller projects
Nu-Oil will also seek suitable onshore projects
MFDevCo has made tangible progress in a number of ways this year. Firstly, negotiations have continued on a number of larger scale and undervalued opportunities with effort directed to complete the key tasks required to meet MFDevCo's objectives and those of the counterparty
The technical evaluation including operating plans has been satisfactorily concluded, with the assistance of consortium members, and are being integrated with financing requirements
Significant project finance will be required
We have identified an alternative way to commercialise a subset of late-l
Not really a long way off.... its one RNS away from big returns.... and there could be any number of these RNS for projects lines up... there are at least 2 we know about....
That’s the challenge with investing..... wait for it in RNS it either multibags on opening or suspends and then multibags on opening.... I believe there is great potential for a really lucrative deal for us here, because it aligns interests of Dommo, Bondholders and us.
Pretty low risk at this level because GTW also appears close.... despite concerns of funds.... the continued lack of a placing coming for me confirms confidence, otherwise be done and dusted by now.
Yes it could all come together very quickly now, taking into account Dommo have promised the first phase of the development starts March 19.
Ex OSX MD working with MFDevCo Brazil
$50m charter payment paid and distribution to bondholders
Bonds transferring to English Law with UK based Security holder
OSX3 Equity position to be reviewed
Revitalisation due to start in March 19...
Some real big clues here as to Brazil deal progressing and timelines being very close IMO....
The other significant part for me....
"OSX3 has, in consultation with the Ad-hoc Group and the Bond Trustee and its advisers, also been assessing its long-term equity ownership and the structure of the debt that it owes to the Bondholders, in order to ensure that the on-going management and control of OSX3's business is efficiently managed and is aligned with the interests of the Bondholders."
Perhaps equity in OSX3 is up for grabs. Bondholders invest in bonds for a reason rather than equity. It's a different risk profile, so this could be what they mean about aligning with interests of bondholders. If OSX3 for whatever reason fails, for example if revitalisation does not go ahead and TM is decommissioned, its the bondholders own ownership of OSX3 that would be defaulting on their own debt... so where's the recovery or security? Transfer the equity to someone that can ensure the success of the revitalisation program, and hence guarantee the repayment of the bond and interest.
Anyone know a UK based company that have apparently been linked with TM for the last 4 years, with consortium partners capable of carrying out and part funding the development?
Been looking at it Kightrider.....
The most significant point to me is that the New Loan notes will be held under English law with Madison Pacific based in London, previosuly having Norweigian and Dutch links. There is no other connection to OSX in London as far as I am aware? Could this be an indication of an upcoming link to a UK based company?
Yes as noted one has a TR1 still, the other is more likely to have more shares rather than less since having his trading restriction lifted. Very much still in.
More pathetic attempts to dig to find anything to cause doubt.... you think if they announce a project tomorrow anyone will care about who is named as a director of which companies on companies house....?
Was clear from the AGM Graham is in charge...
AP likely removed from RMRI as conflict of interest and probably because now full time NUOG. Clear from the new structure where this is heading in terms of ownership and structure.
I think it's the market makers trying to decide how much to gap it up on news.... 11,000 shares means 11p on open!!!!.
Or it could be racey buying and selling again... used to do it with millions but after timing trades wrong here, dealing fees, and losing on Digibyte, probably only dealing in 11,000 shares now. He'll go up to 50,000 on giro day.
Commenting on what's happened is not a difficult feat... its understanding what's happening and what will happen that will make people money. Does the fact the market has controlled this over the last few weeks make any difference to whether a bumper RNS comes any day..... no.
Page 10 of attached......All of the Electrical Submersible pump (ESPs) are now beyond the 4 year expected run life.....
The first rig campaign is scheduled from March to May 19
March is getting pretty close now.... further evidence that this could close very soon...
http://dommoenergia.com.br/wp-content/uploads/sites/9/2018/11/2018.11.26-New-Charter-OSX3_Eng.pdf
TBH at the time i thought they may have been refering to Bentley, as a lot of us were researching that at the time, which by the way has still yet to deliver a solution which was expected to be announced in Q3 last year.
KR.... no i have never had information shared with me not in the public domain..... this was a long time ago, before we even had TM on the radar and before it was evern even mentioned on a BB.... so this was said in general in relation to me questioning why they have failed to deliver on a deal so far..... It was mentioned in regards to an unknown deal without any public comment on what the field was, where the project is etc etc... Although they have never officially confirmed TM, they appear to now accept that its in the public domain now, so I am guessing they wouldnt make any such comments.
A little bit more digging.... just taking OSX a step further.....
Focusing on the current ownership of OSX Leasing B.V., who the charter agreement is with and the bondholders control and hold their bond with....
The below link is relevant here... under the judicial recovery, the shares in OSX 3 were transferred out of the OSX group to a new company OSX 3 Cayman Limited, which Nordic Trustee are the Trustee in favour of the bondholders. So the bondholders no longer have security over the FPSO or the charter, they have ownership via shareholding in the Cayman company. Also ownership of 35% of Dommo, 10% direct and the rest via settlement shareco.
So Nordic Trustee act on behalf of the bondholders as custodian of OSX 3 Cayman Ltd which is the parent of OSX Leasing B.V. which owns the vessel and holds the charter.....
All very complicated.... but shows the direct ownership of the Bondholders and removal of OSX 3 from the OSX group.. which makes things more clear and for me makes entry into TM much easier.
When i first invested and contacted the company, I was told things were becoming easier as we were negotiating with the bondholders, not the company. It may have taken a long time since then, but seems to me the steps are falling into place.
http://stamdata.se/documents/NO0010640824_SB_20161006.PDF
I think there are alternate real possibilities where we could look to fund working capital that do not require a placing:
1) Lets say for arguments sake we need to fund $100m for the project... which will be secured against the asset, income from the asset... perhaps we borrow $102m.. maybe the $2m is contingency and it can get us through to cash generation.... it is in the lenders interest they will want to see that they are lending to a going concern, so we could wrap some working capital up into the finance. It could just be possible to manage timing of cash flows.
2) Other debt finance..... the way the Brazil deal is looking like shaping up.... I am almost anticipating us taking over OSX side of the charter agreement, with us settling up with the bondholder (perhaps a new bond or by borrowing enough to pay them off)... Dommo are due to pay an additional $15m in the terms of the charter agreement. Perhaps that will end up our way if we have settled with the bondholders to take over the charter. This $15m contractual payment could be used to secure forward borrowing in some way.
3) GTW - The fields we are targeting in the North Sea will have very large decommissioning bills... it could be possible to defer or transfer decommissioning liabilities from existing owners saving them considerable money, this could provide cash flow by way of negative sale price or loans.
4) Strategic investor.... we clearly have a lot of things going on that would be price sensitive not currently in the public domain.... rather than raise at a discount on face value, let's take this info to a strategic investor, prove up the value and get them investing at fair value, perhaps after one or two projects delivered. Graham has worked with Private equity, we have a number of partners already on the inside. We also have 2 consortium partners that could potentially help with private funding.
All above is highly speculative, but the point that I am trying to make, is if you are building something of high value, there are alternatives to giving a big chunk of it away dirt cheap, and the fact they haven't placed already, gives me confidence that that will not happen. To simply say money is running low there must be a placing at a discount to today's price makes no commercial sense, unless you believe they are not as close as we think they are, but it's different this time, there is too much evidence pointing to imminent success..
The alternative is that we deliver on news and raise from the market at a premium....
As much as we have hard earned money invested, they have put years of work into this, do you think they want to dilute any more than they have to?
Very much so Seadog....
The point people are missing.... significant finance will not be possible if significant returns are not expected..... if it's us raising the significant finance, it's us that will get significant returns...
Definition of Shipping Finance from Mizuho bank:
Ship financing is an arrangement that uses vessel charter fees as the principal source of repayment, while various forms of collateral structured around shipbuilding and charter agreements are assigned to mitigate credit risk.
Now where do we know there is a charter agreement already in place, and an FPSO that might be for sale, and bondholders that might want to recover some money that they could have lost, and could still lose if the only asset that can recover it doesn't get developed....?
Have we not also recently heard about SPCs?
Let's not also forget we have a plethora of partners of industry experts that we have convinced to invest their own money in to help us complete projects for them to provide services on on delayed payment terms out of production...
I mean what do people need to hear to see what's happening here and the size of the returns on offer...?? If you are waiting for the RNS to confirm it, please mind the gap up.... I don't think it will be 100% gap, maybe not even 200% or 300%... This could suspend any day, and come out in 2/3 months with Brazil and GTW projects delivered and you shouldnt see less than 100m mcap. And do you think that with all this that might let greedy city brokers work a placing at a discount to todays price?? I don't think so. Our burn rate maybe controlled at £100k or less per month, reckon if they are raising significant finance they might be able to manage what ios a quite modest burn rate some other way than raising money sub 1p...???!!
https://www.mizuhobank.com/solutions/structured_finance/ship_financing.html
Regarding finance for Brazil..... the MFDevCo agreement with Braemar shipping is likely to be very relevant to the deal.
Braemar ACM
Braemar ACM has considerable expertise in a number of areas in the oil and gas industry. Specifically
Braemar ACM’s role will include:
shipyards negotiations (worldwide)
being exclusive brokers for all marine equipment required for field development and chartering offtake tankers
sourcing financing opportunities and introducing investors
sourcing projects for the Marginal Field Initiative through its global network
assisting with the sale of future Field production
Braemar ACM is one of the largest chartering and S&P shipbroking companies in the world. Braemar
ACM was formed under its most recent name via the 2014 merger of Braemar Seascope and ACM
Shipping. With offices in 16 key shipping geographies worldwide, covering chartering, S&P,
operations and market research across all the major commercial shipping sectors, Braemar ACM can
deliver a comprehensive shipbroking service in any location and at any time.