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Hi Daikihaku and LTT,
there is no doubt this is a good deal.
Worse case is approximately EUR 15m and all legal fees etc paid off.
Best case is legal fees all paid + EUR 102million or more (15m + 65m + 22m+ )
It may fall somewhere between the two and the 3rd tranche is dependant of final recoveries which may take some years. However this provides lots of cash and certainty, and removes the small risk of having nothing but legal bills.
All eyes now on Navitas's next moves.
I just came of the phone to Canaccord Genuity Limited regarding a couple of questions I had.
Regarding the second tranche Eur 65million. As I thought, should the ROI appeal be rejected, as it is likely to be, then this 65million is quote 'crystallised' and payment comes form the legal team, not dependant on payment from ROI.
Regarding Tranche 3, this is a bit more complicated but it hypothetically goes like this.
If appeal is rejected and Italy still owe EUR 250m
Legal team will pay Rock 45 + 65 =110m upfront, PLUS this 20% bit
Specialist Fund legal costs of perhaps 15m, x 2 = 30m
Specialist Fund's total investment including costs.110 + 30 = 140
Award of 250 minus 140 = 110
Rock get 20% of that = Eur 22m
So if the award is thrown out, Rock will recover 45 = 65 + 22 = Eur132m
This IS a good deal for Rock !
Note The Specialist Fund will cover all costs related to the Arbitration from the ''date of this announcement.''
Rock have
1. Paid for all legal costs incurred plus winning fee
2. Have a free carry on future arbitration legal costs
3. Removed the, admittedly very small risk, of losing the appeal and getting nothing.
4. Received Eur 15million upfront to strengthen the books
5. Agreed a Eur 65million payment if Italy lose their appeal
6. Exposes Rock to more Euro millions payment in tranche 3 once the legal team tear ROI a new hole
7. Diminishes needs for a cash call for the foreseeable, when the Eur15m is added to the warrants cash
8. Made our house trolls look stupid
What's not to like ! ;-)
This may have been mentioned by the many posters I have blocked, but this deal seems again sensible given that
'The annulment hearing is currently scheduled to commence in April 2024.'
Which is a slight slippage from Q1 2024.
Disappointing SP reaction on what is essentially a really good deal !!
Before the award outcome most would have jumped at this deal. It may take a while for investors to appreciate it though, plus the warrant situation is perhaps, clouding the share price action.
Of interest,
''Tranche 2 - Additional contingent payment of €65 million upon a successful annulment outcome.''
Says 'outcome', not monetary recoveries. I take that as meaning if ROI appeal is refused, Rock get Eur65m immediately.
It also talks about a hypothetical 20% reduction upon, if we take that as a possible outcome, Rock still get Eur 52m in the 2nd tranche.
Eur45m is secured whatever happens
Eur 52m to 65m is highly likely in tranche 2, and monetised when Italy lose their appeal I feel
Eur 15m+ in tranche 3
To keep this in perspective, Rocks previous open offer, if all warrants are take, would raise $17m, for about 33% dilution.
Good Morning XKR,
yes that is more or less as I read it except Tranche 1 is Euro 45millions but we discharge all our legal costs via this trance.
It is a sensible pragmatic move and I welcome it's certainty of getting at the very minimum of E15m in the short term. Longer term assuming the legal team know their onions, and the reason they've entered this deal with Rock, is we get approximately EUR100 to 115m, but this may be, like it is now, in a year or two.
Main take I feel, is Rock removes all legal liabilities from it's books, and gets a minimum Eur 15m cash injection. This is good news!
Total Receipt by Rockhopper:
From Tranche 1: €15 million - after paying legal fees
From Tranche 2: €65 million (assuming no reduction due to annulment).
From Tranche 3: €26 million.
Hi LTT, it certainly looks like Navitas have so far spent $50m on Sea Lion, Quite a commitment and their London team have done a great job getting costs down to sub $38/bbl. Getting debt finance is a hurdle to surmount, but the numbers stack up very favourably.
News can drop any time, or not for a few months, but it is more likely than not, I feel, that we will see a big RNS coming out detailing real progress towards FID in Q1.
Indeed true Bloobird, however my comment was a generalisation of attitude, rather than Sea Lion specific.
A classic example is the coking coal we can use from Cumbria, but objectors wanted the steel plant to use to use foreign coal shipped in.
Fracking is another example, however we import LNG from USA and Quatar instead of producing it in the UK, bringing jobs, taxes and yes, energy security SmoggyPete.
Nobody in Russia, USA or Norway are worried about running out of gas and oil, for obvious reasons.
My view is we should decarbonise sensibly, and along the way use our own oil and gas in the on land and off shore, Falklands etc, and especially frack, and if someones wedding photo falls of the wall in a miniscule earth tremor, then there can be reduced gas prices for all affected area's. Governments should take difficult decisions for the many, not Russian financed pressure groups or fuknicks like JSO.
Incompetent out of touch, virtue signalling politicians are the principle part of the problem Citizen.
Morning Citizen, there is good support in the Conservative ranks for the Falklands, and for a sensible attitude towards oil and gas, however the Whitehall civil service 'Green Blob', and green zealots MP's of all parties would rather we imported energy security from half way around the world, increasing the carbon foot print, bought from dubious unreliable regimes and losing jobs and taxes as well.
The utter stupidly of this is beyond comprehension, but sums up exactly what is wrong with this country and the dire quality of our law makers !
Also Q3 interims are now in English.
https://navitaspet.com/wp-content/uploads/2023/11/%E2%80%8F%E2%80%8FNavits-FS-Q3-2023_26112023_eng_HM.pdf
On page 15 , I read it as 2023 Sea Lion spend as
$23,544,000
2022 $11.1m
2021 $14m
It has been suggested this is an accumulated total, however that doesn't look right.
$23m is an excellent indicator of commitment !
Reiterates FID next year
Sea Lion is a significant oil discovery located 220km north of the Falkland Islands. Navitas Petroleum is promoting a development plan for the project and a financing package.
Previous owners in the Sea Lion field drilled 20 exploration and appraisal penetrations. Past investments amount to approximately USD 1.3 billion. Navitas Petroleum anticipates that a final investment decision (FID) will occur in 2024.
https://navitaspet.com/project/the-sea-lion-field/
For what it was worth, Charles Moore was on GBNews this evening discussing with JR Mogg about UK Gov's braindead attitude towards UK energy security.
Any press highlighting moronic policy is useful, although I doubt the Red Tories or even worse Opposition will accept how short sighted and stupid they all are.
Regrettably, I think Rock and Navitas already know they can not rely on this p1zzpo0r excuse of a liberal-socialist so called Conservative government. Good coverage though!
I keep seeing people post 30% + dilution. IT ISN'T !!
There may be 30% more share in issue, but existing shareholders have NOT been diluted 30%
With the help now of a calculator.
Company X has 100 shares, you own 50 shares, or 50%
Company X issues 50% more shares, ie 50 shares
You have NOT been diluted by 50% !!
You now own 50 shares out of a total of 150 shares, or 33.3%
You have been diluted by 16.7% (50 - 33.3)
Doing the maths assuming nobody buys into the offer, shares will increase by 30% to 782m
Existing HUM shareholders will have been diluted by just under 24%, NOT 30%.
ThePublican777, if we assume nobody is foolish to buy 11.2p shares in the Offer, and dilute themselves even more, when they can buy cheaper in the market, then although 30% more shares have will have been issued to CIG, taking issued shares to 777millions, the effective dilution to existing pi's, is circa 22.5%.
Bad, but not as bad as some believe.
It's nothing to stress about I feel, just part of the process as below
December 8, 2017 The Tribunal issues Procedural Order No. 1 concerning procedural matters.
July 2, 2018 The Tribunal issues Procedural Order No. 2 concerning procedural matters.
August 6, 2018 The Tribunal issues Procedural Order No. 3 concerning production of documents.
December 7, 2018 The Tribunal issues Procedural Order No. 4 concerning the non-disputing party’s application pursuant to ICSID Arbitration Rule 37(2).
December 18, 2018 The Tribunal issues Procedural Order No. 5 concerning the non-disputing party’s request of December 14, 2018.
(b) Annulment Proceeding
January 31, 2023 The ad hoc Committee issues Procedural Order No. 1 concerning procedural matters.
July 10, 2023 The ad hoc Committee issues Procedural Order No. 2 concerning the termination of the stay of enforcement of the award.
December 8, 2023 The ad hoc Committee issues Procedural Order No. 3 concerning procedural matters.
https://icsid.worldbank.org/cases/case-database/case-detail?CaseNo=ARB/17/14
Simplyme,
there is often a country mile of difference between what gold oz's Betts says Hum will produce,
and what Hum actually produce!!
He can find and build gold mines, two so far, which is no mean feat, but he often comes up a bit short in running mines effectively.
Least we forget, the ICSID ruling said,
''To sum up the conclusion reached by the Tribunal in this case, there can be absolutely no
doubt about the power of the host State to amend its legislation, as it did in the present case
with the adoption of the 2016 Law, nor can there be any doubt as to the public interest nature
of the reasons that led Italy to adopt this new legislation.
5. Even beyond the finding that the operating licence granted to Rockhopper due to the legal
consequences of the administration’s silence, it could of course have been admitted that Italy
proceeded to expropriate this investment as a consequence of the adoption of the 2016 law.
However, this decision would have had to be accompanied, in accordance with the terms of
Article 13 of the ECT, by the "payment of prompt, adequate and effective compensation". As
a matter of fact, this has not been the case. No compensation was ever paid to the Claimant
even though it was in legal possession of a title to exploit the Ombrina Mare oilfield.''
Academic I feel.
Rockhopper had met all the conditions set by Italian law to be granted the licence, so the denial amounted to an unlawful expropriation.
Italy were and are bang to rights, and despite the pressure from Italy and the undemocratic EU and it's political judges, ICSID weren't afraid to come to the only conclusion it could do, from the evidence before it.