Member Info for Stevo12

No they are not. If you click on “PMO short position” tab above you will see that shorts have continued to increase this week and have increased by over 50 million in last 2 months. While this has kept a lid on the share price, these shorts are effectively the debt holders pre-selling their creditor shares.

Today is the last day for the debt holders to pre-sell their creditor shares via shorts. From Wednesday the shorts will close very quickly as the new creditor shares are used to close the shorts. I predicted that all or almost all of the 170m shorts will have been closed by mid April (many will close by end of next week)

However I can see a rising share price today resulting in more pre-selling of creditor shares which might cap any gains today.

RIP PMO as we celebrate the birth of Harbour Energy. It is going to be a very different journey going forward - Well capitalised business with investment grade debt, significant cash flow to focus on profitable growth, a highly competent Board and most importantly alignment of interest. Harbour shareholders (who own 77% of group) and are locked in for between 6-12 months and want the same as us -a rising share price. No more creditors calling the shots.

A Mexican standoff or an Argentinian Tango? There is a reason that Premier could not attract any serious partners when they tried to Farm down some of their interest in 2019. We ended up giving away 30% for free to an Israeli bit player when Premier and RKH had spent $1b to discover and appraise. No one else was interested.

There are many reasons why there was no credible industry interest in Sealion in 2019. These include remoteness from markets, hostile neighbours claiming ownership and no infrastructure. In contrast, there is a lot of interest in Gulf of Mexico. Mexican presidents come and go but oil makes the world go around.

This is why the market sees Sealion being developed as a very long odds bet. As long as we all view RKH as a gamble rather than an investment, then all good.

Next year Rodney we’ll be millionaires- at least Sam might be with all his lovely options at 6p.

I do believe we will know by summer - Monaco or Blackpool for holidays.

Today is the final day for Permex to agree Zama unitisation with Talos consortium. If there is no agreement, it goes to Mexican oil ministry to decide. The Mexican authorities decision is not legally binding and, if still disputed, it goes to international arbitration.

This could take a couple of years if it goes to international arbitration.

I am hearing that parties are much closer but no agreement has been reached and both sides have applied to Mexico ministry for a small extension.

Also Mexico is unlikely to mess around with US interests. US does not stand for countries messing with its companies legally acquired interests. Mexico is massively dependent on US via NAFTA.

Wish we could have a US company involved in Falklands. Argentina would back down very quickly.

We will see how unitisation turns out (hopefully tomorrow). I have taken a look at the sismics and it looks like Permex will have approx 25% of an enlarged Zama field. Could be out by a few percent points either way.

If Mexico does not honour its awarded licences then Harbour can secure compensation via international arbitration in the same way as RKH is seeking damages from Italy.

I really hope they go for Sealion but I am trying to be impartial. Keeping fingers and everything else crossed but I will be leaning towards Mexico if there is a positive unitisation outcome tomorrow.

Apologies for poor typing and hope they have nice shirts!

Re Moreno’s question. There are no changes to your existing PMO shares as it is the same legal entity both pre and post merger. All that is happening is they are changing their name from Premier to Harbour, acquiring Chrysaloar’s assets and issuing a boat load of new shares.

The name change will be dealt with automatically via your trading platform or broker.

Kraken

Please reread my post. ARCM and others have borrowed stock and sold it as you state. However they are receiving 3 billion creditor shares. They will use some 170 million of these creditor shares to hand back to the original PMO holders they borrowed the shares from (to. Lose the short). They are not betting on the price going down - this is the last thing they want - as they will be holding billions of shares after closing their shirts.

All they are doing is pre selling some of their creditor shares.

Re other

Kraken

These are not normal shorts. The shorts relate to the debt holders firstly hedging the gain on the distressed bonds they bought and now selling their creditor shares ahead of receiving them on 1 April and locking in their proceeds.

As an example, ARCM held debt of $300m dollar and as part of the merger settlement will receive $180m in cash and just over 300m shares (1.5 shares for each £1 of debt). ARCM have shorts outstanding of just over 60 million and so will hand back 60m of their 300m shares in early April to close their short. Total shorts have increased from 120 million (12% of total shares) In January to 170m today as the other debt holders (principally Melquart, Whitebox and Mirabella) borrow more shares and sell them pre merger. Post merger they will the hand back some of the creditor shares they will receive to close their shorts. Accordingly they have guaranteed the price they will receive (approx 30p per shares as last short increase was on 22 March) for their creditor shares which have been sold ahead of a potentially very volatile April/ May as the 3 billion creditor shares look to find new homes.

Hope this explains and expect more shorts to be taken out tomorrow and Friday if share price holds up. This is placing a cap on share price at moment with as of today over 50 million shares shorted over last 8 weeks - amazed the share price has held up so well.

Kraken

Do you read this board? As many, many contributors have pointed out there will be no buying back of stock by the shorters. They are being given the shares through the debt restructuring.

I believe Shorts will continue to increase this week - already up 5 million this week. Shorts have risen by over 50 million over last couple of months and will close in early April.

NigelH

Apologies I have just read through previous posts and it was FI who was claiming Sealion represents 43% of combined group reserves.

NigelH

My point is that you were representing that Sealion accounts for 43% of Harbour reserves, which is both wrong and misleading. Sealion phase 1 & 2 represents 43% of 2C reserves. There are also 700m of producing (2P) reserves which you have oddly excluded.

I know exactly how 2C convert to 2P - I have been in the industry for many years. My point is that they have not converted to 2P as Sealion has not yet achieved FID (contrary to your statement) and there is $1.8b to spend for approximately 250m barrels to move from contingent to producing.

I am sure it is not intentional, but when statements are made that Sealion accounts for 43% of combined groups reserves, you are misleading this board. In value term’s Sealion represents around 3% of the value of Harbour’s 1.6b barrels of reserves.

LTH, Ovets

We are all trying to put together the pieces of an incomplete jigsaw puzzle. I think we were all surprised by Richard Rose’s statement and I still don’t believe Harbour would proceed with Zama unless they are operator. Accordingly it may be that Harbour will be taking an increased interest from other partners and taking over operator-ship. The timing of the Permex statement is also interesting. The deadline for completion of the unitisation agreement is tomorrow, so we might be getting an RNS very shortly..

While us RKH long term holders have a natural preference for Sealion, the only indisputable fact is that the share price is telling us that the collective view of the investment community is that Sealion has at best a 20% chance of being developed. I have taken that bet as I believe the upside opportunity outweighs the downside risk.

However we are all just guessing while we wait for news.

Much

Big difference between continuing to issue exploration licenses for North Sea and providing funding guarantees to facilitate overseas projects. UKEF have been very clear that they will stop supporting fossil fuel projects in June 21.

There may be other ways of providing gov support for FI project which would benefit U.K. politically and economically. FI have committed to paying for military presence from oil revenues.

NigelH

Unfortunately Sealion FID was not signed several years ago ...... which it had been.

Sealion is still a contingent reserve not a 2P reserve - please do try and keep up.

I don’t believe any of the creditor shares are subject to lock in restrictions. 2.7% of share capital would be 500 million shares which would require an individual debtor to have held approximately $500m of debt.

I believe ARCM arethe largest individual debt holder with balance of a little over $300m.

Accordingly we can expect the 3billion+ of creditor shares to be sold before the other shareholder lock ins expire. Hopefully most will be sold of market.

No it is not true. FI represents 43% of 2C undeveloped reserves. There are also over 700m barrels of developed and producing reserves. 2P reserves are worth approximately 10 times more than 2C reserves.

Accordingly from a value perspective FI accounts for approx 3% of reserves.

Ovets could be correct that this might be a high stakes poker game by Harbour to drive up interest in Zama. However getting the exiting CFO to put out false public statements to try and drive up purchase price is pretty Machiavellian. It could easily back fire and potentially interested parties walk away.

I am sure they will be negotiating hard with FI government re tax and royalty rates. A first good step would be for FIG to forgive the £60m tax on the $700m development carry RKH will no longer receive. Unfortunately RKH are not really involved in discussions with FIG so why would Premier/Harbour try and help RKH.

Thanks SK. I’ll try harder in the future.

FI

I have done the same with ig index. I have placed a buy order at 22p with an automatic close at 30p. I expect this trade to pay out at least 5 or 6 times over next 3 months.