Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
It’s hard to imagine that Navitas have gone to this all this detail, trouble and expense to not want proceed with FID. Also, this far advanced they will have a good idea where finance is coming from, who, if anyone will partner, and realistic timeframes. It is encouraging they still repeat FID 2024/1st oil late 26. I expect both will slip, perhaps by 6months.
Some talk recently about what share price Rock might achieve in the coming years. If we assume FID happens and plans are similar to the latest update, capex $1.2b circa 50k bbls/day, costs $25/bbl, POO $75/bbl, taxes and royalty remain same, Rock maintain 35% as restated, then doing some maths.
Costs net to Rock are $420m. 50k bbls/day suggests Rock net profits per year $207m. So Rock could be debt free by late 2029, with yearly profit of $200m, and another 15 years life of field on just Sea Lion alone.
Question. If the above came true, and I feel it is reasonably realistic, by comparing with peers, what would be the expected dividends per year, and how much would such a company worth?
Don't believe all you see on Remainer TV Anon. Just yesterday
Representative to UK sees Brexit as beneficial for Taiwan. New envoy hopes UK will become Taiwan's largest European trading partner.
Certainly reducing royalty will make SL even more attractive, however with current plans of
50,000bbls/day,
break evens at sub $25
oil $75/bbl
50,000 x 50 x 365 = $912m gross
9% royalty 26% corporate tax
912 - above = $593m net profit a year
Throw in 2C resources of 312 MMbbls so life of field 17 years,
17 x $593m = $ TEN Billion profit NET
There should be more than enough incentive to develop SL at current royalty %
35% to Rock is obviously $3.5billion. And there is an additional 'Development Unclarified' C2 479m bbls waiting.
Rock market cap ------ $90m !
Although on paper, Rock is a sitting duck for a TO, Im not convinced it would be that easy, as I feel FIG want a British company involved, and Rock have a unique position with regards over a decade building a constructive relationship.
WRT the SP, it is definitely frustrating given the very high probability of FID, and in 4 years we could be getting dividends higher than the current SP !
However it is what it is, and we are nothing if not a patience bunch.
Thanks Citizen and yes, should have written ‘’Per barrel cost - life of field’’
Brent knocking on $80per barrel, per barrel cost $25, 50,000+ bbls per day
(80-25) x 55,000 x 365 = $1Billion gross profit per year.
FID is sooo going to happen !
Gross capex required to first oil has been reduced from US$1.3 billion to US$1.2 billion
Capex of approximately US$8 per barrel
Opex across life of field has been materially reduced to under US$17 per barrel
Lower risk project with a break even under US$25 per barrel (Per barrel cost - life of field)
List was until the end of January or up to first major news release. I would say
the reduction of Opex to $25/bbl
2C resources in the overall NFB have increased from 712 MMbbls to 791 MMbbls
with a 16% increase in gross 2C resources from 269 MMbbls to 312 MMbbls
Navitas having identified suitable and available existing FSPO's
gross capex required to first oil has been reduced from US$1.3 billion to US$1.2 billion
counts as significant news, even if the SP hasn't yet reflected this.
Sadly but the guesses are fixed now.
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I feel the Tories and Sunak are absolutely shiiite !
Problem we have is Stammer and Liebour are even shiiiter !!
It even says so in the RNS,
"Derisks the arbitration process"
Others may disagree but I feel it seems unlikely either side can back out just on what ICSID may or may not announce. There is a clause to back out but its a date deadline.
It is also unlikely FIG will give a fig about this deal as it does not affect them, and they want Rock financially healthy to progress SL. Logically thinking they'll 99% sign it off within the timeline.
Tony, the bit you are missing is that the JV would require 300m, Rock need to fund 35% of that, and Navitas are loaning 2/3rds of our 35% contribution.
Art123
Basically this is the terms agreed
Navitas to provide loan funding to Rockhopper:
The majority of Rockhopper's share of Sea Lion phase one related costs from Transaction completion up to Final Investment Decision ("FID") will be funded through a loan from Navitas with interest charged at 8% per annum (the "Pre-FID Loan"). Certain costs, such as licence costs, are excluded.
Subject to a positive FID, Navitas will provide an interest free loan to Rockhopper to fund two-thirds of Rockhopper's share of Sea Lion phase one development costs (for any costs not met by third party debt financing). Certain costs, such as licence costs, are excluded.
So for example if $1.3bn (capex) and $1.0bn (finance) we would need a gross JV equity contribution of $300m. We are on the hook for 35% of that which is $105m but we get 2/3 of that in the Navitas loan leaving us with $35m.
Throw in a ''16% increase in gross 2C resources from 269 MMbbls to 312 MMbbls out of overall 791 MMbbls''
& $10million in cash as of 31 December , excluding the OM award,
and Rock hasn't looked this good an investment for a decade.
'Against a background of continued industry cost inflation, gross capex required to first oil has been reduced from US$1.3 billion to US$1.2 billion with a capex of approximately US$8 per barrel and opex across life of field has been materially reduced to under US$17 per barrel, providing very robust economics and a lower risk project with a lower attractive break even under US$25 per barrel (compared to the US$27 previously reported).'
''Navitas has identified suitable and available existing floating production storage and offloading ("FPSO") vessels and is actively working with leading industry vendors to secure all long lead equipment, continuing to target Sea Lion phase 1 Final Investment Decision ("FID") in 2024 and first oil at the end of 2026.''
Sea Lion is soooo going to happen ! :-)
Thanks for posting Pre2rcd, and the translation Mogger.
Did anyone notice that Navitas have released the NASI estimates of the unrisked contingent resources and cash flow, as of December 31, 2023? About half way down is in English. One for the techies I feel !
https://mayafiles.tase.co.il/rpdf/1570001-1571000/P1570891-00.pdf
Beverly 1
Beverly 2
Casper South 2
Hector 1
Hector 2
Hector 3 East
Hector 3 West
Ninky 1
Ninky 3
Pre-Zebedee East
Pre-Zebedee West
Zebedee East
As always from Mogger, a v.useful find !
Just more weight in my mind at least, to the view FID is unofficially a done deal in Navitas's mind, except for the the big nitty-gritty of finance and possibly an additional JV partner.
BlooBird, the previous poster may have answered you already, but I have then filter. If they didn't then as a HL account holder, I can say I never have to input a 5 digit voice call number. It must be a new thing, or the way you have your security set up??
Promoting
1. support or actively encourage (a cause, venture, etc.); further the progress of.
Certainly TheChessMaster, FID is not officially done, however I'm just musing that together with Navitas's actions and financial commitment, one could rose tintedly read the word 'promoting' as them indicating its going to happen once the ducks are lined up.
Ducks could indeed mean another partner or two, as well as the finance package.
From Navitas website,
https://navitaspet.com/project/the-sea-lion-field/
'Navitas Petroleum is promoting a development plan for the project and a financing package.'
''promoting'' sounds like FID is a done deal. so as long as financing is obtained.
However it is all too easy to read too much into things.
Blooming heck, not a ''bad'' price for HUM that .........
Anon, I should have worded that better, it was not a price for HUM that CIG paid 11.2pence, and now in hindsight it was a great price. HUM needed the money, and I guess CIG wanted a bigger slice of the 100,000 oz per year from Kouroussa.
Both got what they wanted.