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Thank you DEM, it is always good to hear other confirmation. I am surprised that this understanding has, as far as I know, not been discussed and definitively put to bed already, as both myself and LTT did not read it that way.
Finding circa $35m would be relatively easy for Rockhopper post FID and hopefully more than covered by an OM award, should there be one.
CitizenTS, thank you for your reply. This question, and the answer is incredibly important when we consider whether or not Rock would need to find/fund $150m, or $35m on a hypothetical post FID Capex of $1,300m. Whilst I appreciate what you say, and hope you are correct. I feel it is an answer that needs to come from Rockhopper themselves to be 100% certain. To that end I have written to them and will post their reply should I get one.
Dear Rockhopper,
a quick question if I may. WRT the statement in your latest presentation that Navitas will post FID, fund 66.7% of all project costs NOT met by third party debt funding.
Hypothetically, if Capex was $1.3Billion, and Navitas managed to get $1Billion of debt funding,
would Rockhopper only need to find $35m, this being 1/3rd of their 35% interest in the remaining $300m required?
Many thanks
''Rkh have to find their likely 33%ish of 35% or whatever ONLY of development costs AFTER all debt raised. ''
CitizenTS, this would be a most welcome situation if it is right. My understanding, and that of LTT,
is that Navitas would sort out their 65% funding, and also fund 2/3rds of our 35%,
leaving Rock to find 1/3 of our 35% interest, which our estimate is approx. $150m ish.
If your interpretation is right. EG, say hypothetically capex is $1.3B, and Navitas secure debt funding for $1B.
Your scenario means $300m more needs to be found. Rocks 35% of $300m is $105m, and Navitas 65% is $195m
Navitas will also fund 2/3rds of Rock $105m, being £70m. Leaving Rock needing to find just $35m.
Summery, Navitas would need to find a total of $1,265m
$1B debt funding + $195m + $70m ($265m) and Rock just $35m, being 1/3rds of 35% of $300m.
I prefer Rock finding $35m instead of $150m, so it would be good to know whose understanding is correct.
If anyone has good contact with management perhaps they could clarify.
''we would have to find $155m approx to fund our 1/3rd.''
Hopefully an OM pay out will cover some of that even if just $20m
After than, if phase 1 production is scaled down to 45,000b/d and costs go up to $50/b, perhaps with POO at $90/b
45,000 x 40 = $1.8m revenue per day, $657m a year
royalty 9%, Corp Tax 26% = $427m profit
Rock 35% = $150m profit net to Rock per year.
I'm hopeful Rock would find some funding with those figurers.
''What about the spread ? At the moment it's 0.9p (about 13%)''
Bloobird, the spread is not important.
EG If I have 100,000shares, I could sell 1/8 at 7p to fund buying back at 7p in the OO
I still have 100k shares plus get 9p warrants attached with 1/16th of them as per the RNS.
At the moment people are able to sell at 7p
seems bad news from the mediocre management at Pure.
Whilst nothing new is known, the SP action would suggest the shower in charge
might still not have gotten a grip on the mining ops !
Don't know for sure as I have never had them, but I suspect it will be just as easy as subscribing for you OO shares. They expire end of 2023 so plenty of time to see what the SP does and to exercise them 'when' Rock SP is in the 20 to 50pence range :)
Antc1, if you do nothing your shares remain exactly as they are today.
A better plan if you have a decent number of shares to mitigate the approx £10-12 dealing cost, and if you can sell at near 7p, is to sell 1/8th of your shares and then subscribe for all of them in the OO. This way you end up with the same number of shares, it has cost you only the dealing fee but you gain the ability to buy warrant shares at 9p if the SP rises.
I think this is a pretty strong indication ''RKH is a good investment''
19 April 2022
* Rockhopper, Harbour Energy plc ("Harbour") and Navitas Petroleum LP ("Navitas") have signed legally binding definitive documentation in relation to Harbour exiting and Navitas entering the North Falkland Basin
*Rockhopper 35% / Navitas 65%
*technical and financing plan to enable the development of the Sea Lion project to achieve first oil on a lower cost and expedited basis
*Navitas to provide loan funding to Rockhopper
* majority of Rockhopper's share of Sea Lion phase one related costs from Transaction completion up to FID will be funded through a loan from Navitas with interest charged at 8%
*Navitas will provide an interest free loan to Rockhopper to fund two-thirds of Rockhopper's share of Sea Lion phase one development costs
and possibly a big win from OM
*Rockhopper continues to believe it has strong prospects of recovering very significant monetary damages - on the basis of lost profits - as a result of the Republic of Italy's breaches of the Energy Charter Treaty
Possibly you have to have held the shares by record date and also have held them until the ex date,
after which you can sell them and still participate??
Open Offer Record Date.. 6.00 p.m. on 15 June 2022
Same day as placing announcement.
It would be a mistake to assume all who are/were in the suspected anti-company/SL email group, will do as urged. I had an email suggesting to vote against Res 7 and 8, but voted for them, and said as much a week ago.
Looking at last year's AGM numbers, it's highly unlikely Res 7 and 8 will get voted down by the required 25%+
Lets say you have 64,000 shares and sell 8,000 now ... when the Open Offer occurs, you'll then only be able to buy back 7,000 (1/8th of 56,000).
BlooBird, that depends on what day they say is the 'Open Offer Record Date'.
I don't know, however suspect the record day will be the day of the placing RNS or earlier. Less convinced it will be afterwards. I agree with the sentiment best to wait to see what day they use though as there seems no downsides to waiting, unless the SP was to drop below 7pence.
EG77, yes, once you elect to take up your allocation you will get them once the offer completes. But you need to ensure you have funds available to buy them . HL pick up the phone pretty quickly so just check with them for timings. I've already sold 62,500 in my isa so I have funds ready to buy them all back.
Astin, true the odd couple of million ATM doesn't make too much difference. Getting £15m plus from OM would obv be significant tho.
EG77, I am with HL, but if fully subscribed you can't add more funds so would have to sell another holding. Best one to sell is Rock, sell 1/8th at just over 7p atm, and you will be able to buy them all back in the open offer at 7p.
This way you might make a slight profit on the trade, more more importantly aquire the 9p warrants.
HL will tell you you have a msg when the offer becomes available.
Oh FFS
£12.48m million or $ 15.23m
.......... I'm off to wobble my head
~ It should be noted that this would have brought in £5.75m, plus £4.1m option shares, and an additional £2.05m in warrant shares as well. Total £11.9m / $14.5m
Just an observation for those who correctly point out that if you add the current placing shares, with the shares if ever option share was taken, plus if all the warrant shares were also bought at 9pence, then yes we would have been diluted by about 45% .
It should be noted that this would have brought in £5.75m, plus £4.1m option shares, and an additional £6.3m in warrant shares as well. Total £16.1m / $19.7m
Yes agree with all that LTT. Nobody likes dilution although it is the first one since 2011.
I would have preferred Rock waited for OM to be announced however hypothetically it could be FIG want to sign off, but wouldn't unless Rock had more financial muscle, hence the fund raise. I also feel it is a painful but precautionary move.
I expect a minimum $15m award net to Rock from OM, add that to the approx. $10m fund raise and Rock are on again financially sound. If OM pays out $50m plus net to Rock, which is a reasonable possibility, then 7p will be a distant memory.
All things are starting to line up nicely.
Navitas keen and on board
Immediate funding sorted
POG stubbornly over $100/bbl
OM award importance negated, and coming to a conclusion.
Need FIG to sign off and then Navitas to get moving but things are looking substantially better than from just 12 month ago.
''Are you eligible for it If you buy today?''
Answer is we don't know yet as per below. I would be mildly surprised if you could buy today, and still get the warrants, however I am not sure.
"Open Offer Entitlement"
the basic entitlement of a Qualifying Shareholder, pursuant to the Open Offer, to apply to subscribe for 1 Open Offer Unit for every 8 Existing Ordinary Shares registered in his, her or its name as at the Open Offer Record Date
"Open Offer Record Date"
the record date in relation to the Open Offer, to be set out in the Circular