Member Info for SpaceHoppa

Mirasol, that is a very reasonable take on the situation and it is a long wait.
No Rock do not have any income, but also only moderate outgoings. As LTT says we are looking at hypothetically $15m from OM, maybe $18m after inflation calculations, which I think is the minimum. So total $30m with current cash in hand.

Taking the positive, but most likely future events as a given, FIG/UK sign off and Navitas starting to progress towards FID, plus award from OM, then we could see the SP in the teens after profit taking form the 7p shares which will be a drag for now.

There are 61m warrants, most will get exercised if we get into the teens so say 55m x 0.9p, that's another $5m.

So Rock may be looking at having $35m available and possibly much more IF, OM is a win with lost profits.

That’s what we all hope. Have been in Rock over a decade myself. After the latest round of equity printing there are I think 580m shares plus 61m warrants, valuing Rock at about $49m, $12m of which is in cash.

Having a 40pence average might look fantastic in a few years assuming Sea Lion goes ahead.
Equally having a 0.4p average might look rubbish if Sea Lion doesn’t get developed.

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.

Compare that yearly figure to our current $49m market cap and it shows that anyone who can on to their shares for hopefully the production years, should be well rewarded.

CitizenTS, I don't disagree that Rock should win more than their initial investment,
my point was that I feel the initial investment, $30million I think, is the bare minimum Rock should win.
I like many others, feel there could be a substantial 'lost profits' element,
which will be fabulous if it happens, but we can't bank on it until it happens.
Also eagerly awaiting FIG/UK Gov approval like yourself.

Yeah, 42 (or 43) days, like I said :-)

25th April.....the Tribunal has 120 days after closing to issue its Award, extendable by 60 days.'

I personally do not see any reason why it will be extended, and I doubt it will go to exactly 120 days, so a positive OM award is getting very close.

On paper Rock have a Rock solid case to get back their investment and some, however looking at how Starmer can get away with having a curry beergate party with 20 people caught on camera, nothing can be taken for granted.

Hargreaves showing I have the whole 109,000 that I applied for, including the extra's.
Can not trade them yet as per the timeline.
Roll on FIG approval and a $250m OM/Italy settlement now :)

They've only taken 2million from placing shares which popped them over the 7% threshold.
Once the OO shares are admitted, unless they buy into that as well they will pop under 7% again.

It will be interesting to know where the other 80million shares went, although we are let to believe management took 3m+ of them. Anyways, directors finally buying, committed and capable JV partner found, finances bolstered and OM about to be decided one way or the other-very likely a decent win for Rock.

Still looking a great turnaround risk reward play!

6.63pence with no warrant or 7p with a half warrant at 9p?
What is better depends on your investment position and risk appetite

If an investor believes that both prices are cheap and Rock will eventually Rocket,
then 6.63p is the better way to play it and buy all at the lower price.

However if like me one is fully loaded already, then selling 1/8th to gain my 1/16th warrants was the best way to go.
All academic now of course as the OO has closed.

''should we expect the share price to creep up?''

Probably not. Just my opinion but I think the SP will be range bound and lucky to creep much over 7p as the overhang of some of the newly issued shares gets transferred from ii's to pi's. I don't believe there will be a large overhang as I think new shares will be in stickier hands given the likelihood SL will one day be developed by Navitas.

If there is a very good award from OM then all bets are off.
Getting FIG/UK approval and the JV deal completed will boost the SP and help clear any overhang.

I expect the OO to be quite well supported, I at any rate have asked for more, and this will leave Rock with perhaps $11m + existing funds maybe $13m. G and A is about $3m/year.

Navitas signing binding JV terms was majorly huge for Rock, however approvals need to be approved before the hard graft to FID commences. I don't feel Navitas are the type to F uckabout so drip 'feed' news will ensue once JV is approved, supporting the SP back to double digits imo.

2026, 2028, 2027, I too am not overly concerned which year,
just so long as FIG/UK Gov sign off,
Navitas secure a huge wedge of debt funding,
Navitas demonstrate commitment towards FID, and
Navitas cover most of Rocks costs until first oil.

I can wait 5 years, just so long as I know Sea Lion will happen, and I won't be diluted to death.

''talking about FID in 2024 and from FID to first oil was 2 and a half years''

2.5 years is a long time from FID to first oil Nastynick
however it is actually a year shorter than PMO's estimate which said 3.5 years !

For the sake of £30 it will bring your average down to £2.07, and give you a few warrants at 9p.

If you think Rock will win either or both the OM case, and that Navitas will take Sea Lion to production then apply for the shares and perhaps ask for a 10,000 more?

If you think neither will happen then leave it.

DEX. This is a good example of what the collective minds of a forum can add for the benefit of all shareholders.
Since last week I now know even with full take up of the OO, my dilution is only 23.5% not 31%
and more significantly thanks to yours and CitizensTS's counter posts,
that Rock don't have to find 1/3rd of 35% of whatever the total Capex will be.

After understanding the above I earlier decided to buy back the 1/8th I sold, and also apply for another 46k.

Hi DEX, yes I saw that post and ticked it us as a lot of work went into those details.
I differed from your calculations as I look at it differently. Figurers rounded.

Previous situation was 458m shares,
if all OO taken up then 599m, so an increase of 141m.
458 + 31% = 599
Hence why I say 31% dilution, or 31% more shares issued.

I understand your calculation being 141m of 599m is 23.5%

Simplified:
My method 100 shares + 31% = 131 shares
Your method 31 represents 23.5% of 131 shares

I agree with your method in saying that although an extra 31% of shares have been issued,
this has only effectively resulted in shareholders being diluted by 23.5%.
Thanks for pointing that out as I didn’t clock it correctly the first time.

LTT, I was sceptical at first, no disrespect to forum contributors, as it is such a significant financial move in Rocks favour from what I thought was the situation. The financial side of the deal struck with Navitas shows SM at his best, and also just how keen and confident of Navitas to take 65% and pretty much find funding for 97% of Capex !

On a separate subject, Equity raise/dilution.
458m shares were in issue prior to raise.
If EVERY OO shares is taken up we will have 599m, being a maximum 31% dilution.
Also 70m warrants at 9p.

For that dilution Rock will have an extra £9.85m/$11.8m cash.

We know Rock are not significantly over burdened for funding commitments either prior to, or after FID.

The few remaining ducks to be lined up.
1. FIG sign off
2. FID sign off
3. Secure Sea Lion/Navitas debt funding
4. Rock securing approx. $35m more which may come through an OM award

With POO still stubbornly over $100bbl and energy security including fossils back in vogue, surely this time SL will get over the last hurdle, and with perhaps under 600m shares in issue this has got to be a great risk reward share.

Well I'll give Rockhopper/ Sam Moody some credit, he came back quickly to my enquiry regarding how much Rock will have to find post FID. CitizenTS and DEM you are correct according to SM. On a hypothetical Capex of $1.3B, and Navitas get $1B in debt funding, then Rock need to just find $35m to first oil !!

If OM comes in with with just a $50m award then Rock would be substantially covered financially and this current fund raising might be the last required. Here is his reply which I'm sure he has no problem sharing.

Thank you for your e mail

In short the answer is yes. So in your example of $1.3bn - $1.0bn we would need a gross JV equity contribution of $300mm. We are on the hook for 35% of that which is $105mm but we get 2/3 of that in the Navitas loan leaving us with $35mm.

Hope that makes sense.

Please do feel free to mail me directly if you have any more questions

Sam

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.