Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
3 Types of MFDevCo projects....
1) larger scale and undervalued opportunities
Significant project finance will be required to unlock these opportunities but there are innovative means, analagous to shipping finance, in which this can be done.
Brazil
Aker
Aibel
Royal Eagle Capital
2) Smaller projects which can be acquired and developed more quickly to deliver significant growth.
H&D plan submiotted to partners
create 'standard, repeatable' projects
3) continual innovation
more innovative approaches to project delivery
GTW initiative
progress has been made to create a larger population of viable targets which will have a strong impact upon potential growth
Siemens
Agree Ben.... Many multiples available here
I am interrested in a portfolio not just one or two spikes....
They are focused on project delivery stage..... 2 big value adding projects within touching distance.... there is no funding coming they have told us so in an RNS.
Really marbur.... was Siemens, Ivo, the Ex Rolls Royce PM, new corporate structure, and Graham Scotton all there in 2016???? No I don't think so.... It's all current demonstrable progress....
I think Ivo's appointment has been massively under appreciated in terms of it's relevance to Brazil....
A bit of history....
Eike Batista once one of Brazil's wealthiest individuals, building his empire through his EBX group... the X on the end of his companies was to signal the multiple returns expected...
Companies within that EBX Group include OGX (Now Dommo Energia) and OSX. This was quite a big deal in Brazilian Natural Resources with $15bn invested and 20,000 jobs created from the group. OSX was to target building up to 11 FPSO for use in offshore exploration and production. OGX launched one of the largest private exploration campaigns in Brazil with a portfolio across the Campos and Santos basins amongst others.
The built a group where iron ore produced from their mining company MMX would be used to produce steel to use in OSX, and the ships built by OSX would be chartered to OGX. Gas produced by OGX would supply MPX which would supply power back to MMX, and throw a coal production through CCX and infrastructure vis LLX.
EBX collapsed with a domino effect started by OGX (now Dommo) miserably failing on production targets for Tubarao Azul and later Martelo. The investment was heavily built on mounting debt, with the promise of becoming a major oil producer with ambitions of producing 1.4m barrels of oil per day, and the failure to meet production targets eventually led to default on the debt and eventually to the Judicial recovery order. OSX was reliant on the chartering fees from OGX, and the knock on effect was OSX suffer the same fate.
A company built on great ambition, with heavy investment, trying to grow too quickly on borrowed money without securing near term income.
The judicial recovery virtually wiped out shareholders equity with the aim of recovery as much of creditors cash as possible. Out of that, we saw the charter of OSX 3 on less than commercial terms, with the option to acquire TM as security, whilst OSX also received 35% equity in OGX. So the bondholders of $500m in OSX now control the FPSO and 35% of Dommo.
Eike Batista was sent down for corruption and bribery, and Ivo was on record of whistleblowing and going against what he saw as unethical or unlawful practices.
So Ivo's involvement in the history of TM and OSX is much bigger than many are giving credit for, and the fact we have secured his services in Brazil is a very clear indication of where this is heading. The ambition of the EBX group which he was a part of fares well because it shows how much opportunity to be unlocked in Brazil there is.
The bondholders have just received a $50m distribution from the new charter, which was always part of the judicial recovery process to return to commercial terms. I think Ivo will be managing our entry into TM with OSX and Dommo.
There are very good signs that Brazil is on the cusp for us.
GTW and Brazil both could be days away IMO
Graham has clearly come in with motivation to help the team get things over the line....
We have seen a fantastic new Chairman, we have seen a GTW initiative announce with a world class engineering partner in Siemens. It looks like one more partner to manage the field, and a project to come. Perhaps the partner is announced with the field. The number of potential opportunities is huge, but for the first project, no confirmation of the target, but the one rumour that really seem to fit, is under new ownership where they have real concerns about funding decommissioning, so that is a really positive sign if it is that project.
Brazil - We have Ivo over there now, we have a South American Partner in Royal Eagle, although Brazil wasn't part of the announcement I'll be surprised if it doesn't have some connection.
There's a lot going on with the rumoured target fields owner, which many have taken as a sign that this is not happening. However, I think it's just a lack of transparency on how this is structures, and the signs people as reading as the deal is off are actually milestones in terms of moving the deal forward. It's a real shame they can't announce progress as it happens, assuming because of NDAs and protecting the deal, but it creates opportunity for a swift re-rate.
The OSX 3 Bondholders get their $50m interest distribution today.... Dommo's development plan is assuming work will commence in Q1 2019. I can't see this taking much longer to complete.
GHs obviously not much to be excited about.... but perhaps they feel if they can get the above over the line, maybe they can fund drilling of the new well themselves. They clearly believe in it, it might make sense to retain more control and equity.
Clearly what is holding us back is money... with the GTW and Brazil projects on the cusp... why would you entertain raising money before that? I think in the past things have been a bit more desperate and uncertain with timing, and they have raised money the easy way and done what they needed to do to put money in the bank... they haven't taken this route this time as a placing would have been done and dusted, so there must be great confidence in delivery. Whether they intend to palce higher or if they can manage working capital from financing of a project or perhaps the decommissioning route, I don't know, but I am certain they are not concerned about funding.
It's been painful with so much expectation for progress much quicker than we have had, with the overhang of a less than attractive history. But right now, NUOG is a great investment opportunity, just a case of when the big news drops IMO
gggg i have no idea but I am pretty sure there is a lot of manipulation going on with the large sells and the small round trades....
What i am certain of is this company is moving forward, and there is a lot of value to be unlocked here.
I've been wondering about those too gggg... been going on for a few weeks now.
We have opened up a new market.... onshore and offshore...
The variety of solutions and global reach has been greatly enhanced by the news over the last few weeks. That can only be positive for the long term future by increasing the potential opportunities that we could get involved with.
MFDevCo are clearly earning a lot of respect for the solutions they are offering.
Anyone fancy a nice big company being built here with a portfolio of global projects with world class partners, unique funding and ability to replicate models over and over....
Well I do..! This is another excellent step forward
*suit my position... not shit...
Royscot the idea of these boards is to share ideas and research it’s not just here for a moan or to abuse each other..... I couldn’t care less if anyone agrees or disagrees with my thoughts that are based on hours of reading analysis and interpretation..... not just saying the first thing that comes to mind to shit my position...... otherwise we’re left reading I’ll informed posts from the usual subjects saying Brazil is off bla bla bla....
Unfortunately part of investing is interpreting what little information you have and trying to work out what will happen.... otherwise if you wait for it to happen you are too late.
At least some of us give our reasons and point to publicly available information to support our thoughts.
If we’re left waiting for an RNS may as well not be a bb.
Just a thought..... there are two parties to the new charter agreement... we are focusing on Dommo with a view to us acquiring an interest in TM.... what if we are going after our interest in the field through OSX rather than Dommo....
we take on the charter, retain the bonholders on a new bond term... we progress the development... revenue share is agreed in the charter... dommo might just get out of trouble...
Everyones a winner....
Where did Ivo Dworschak work as CEO........ OSX.
This makes a lot more sense to me than focusing on Dommo. And this would be huge if correct... perhaps the $50m distribution to bondholders is the pre-requisite...?
It’s impossible to value having no idea of the terms..... but I refer to comments made about “material returns to shareholders”.... etc
So GTW we are pretty confident is very close to a ground breaking new announcement with a very profitable deal....
If Brazil comes through in the next few weeks too we will be laughing all the way to the bank by end of March...... through all the waiting.... it appears crunch time is growing ever closer.....
It’s anyone’s guess how much these two will add to the share price.... but I would Sam 100m mcap will be easily achievable...
I’ve beeen thinking this through overnight and I think it’s much more likely a good sign that our deal is very close........
They are looking at fuel efficiency on the FPSO through diesel generators and have been working with a consultancy.... Aibel could be the one for this....
They are looking at completion of the final well and tie back to FPSO and workover of existing wells and changing of centrifugal pumps.... Aker with an increasing presence in Brazil...
The thing that stands out is the comment about funding it from future production..... how are our agreements structured.... well they are on delayed payment terms and they will be paid out from future production so is this what they mean by funding from future production.... I’ve done some quick calls and with $30m in the bank at end of Sep and I’d say max $25m free cash flow before corp expenses generated from production since.... so if they paid $50m they have about $5m left before corp expenses etc... so I can’t see how they can fund from cash.... could the break down of the audit committee be related to unrest around management of cash???
We have our man on the ground....
The new charter appears to be structured for a get out clause more favoured for 2-3 years in where a new facility could take over
I struggle to see them not needing a partner and I think the urgency is only increasing....so I am starting to think this could be a very good sign indeed....
New facility would likely take 1-2 years to complete and relocate.... break clause agreements are in the charter to return the vessel after these periods once the new facility is in place.... it looks rather like to me the new charter is staged in such a way to allow compensated the bondholders for a change in facility...
Well only a 20% discount now to the AGM price..... you know before the news about the billion dollar partner joining us to go complete on a ground breaking GTW project..... !!!!
Agree Alert things appear to have stepped up in pace and urgency and the next few RNS should be big...
Refer to the chairman’s statement June last year.... there is a facility lined up in China for Brazil....