Fernan, Very good point and i already thought of this a while ago. I don't think going without UKEF is not possible. But I think pmo does not want to go. Not because they can't afford. But because they don't want to pay for RKH carry. If you see the current plan, they are not paying for full carry of first phase i.e. $337million.
Also other point PMO will not use all the free cash-flow for sealion. They are very scared since they lost the shirt on Solan. Although both are completely different projects but PMO management now is very careful and very risk assertive. Even after getting UKEF approval they will still bring partner, because don't want to have 60% of a project. They want to reduce their exposure to one big project and have small exposure to multiple projects just in case.
4.3. In 2015 tax legislation was introduced that prevented any tax relief for intercompany leasing costs. The introduction of this legislation was not consulted upon and came as surprise to the companies that were undertaking exploration activity in the Sea Lion basin. It was therefore an unanticipated additional cost of undertaking the activity within the Falkland Islands. Following representations from the oil industry and the responses from the consultation exercise the 2015 legislation is to be repealed and replaced by the hire cap legislation that will apply retrospectively from 1st October 2015.
Can anyone explain what does above mean? Does it mean that the capital gains tax they applied will/have change
BBN, thanks for valuable input, what kind of Farm-out you would expect.
1) Do you expect only appraisal farm-out, e.g. fully carried for 1 appraisal well. 2) Do you expect one appraisal and one exploration well, fully carried. 3). Do you expect one appraisal well plus some carry for development e.g. $50million for development.
the big difference between 2011-2014 and Now is the market cap of AIM companies is so low that companies can not fund any exploration/appraisals from Right Issue / Open Offer. If market cap of Char was $150million then they can issue 20% shares and drill an appraisal well without any partner. But in current situation the only option is partner. This is a big Negative point, as partnering company knows this.
On positive side the market cap is very low means there is good upside left from these levels.
NigelHaemoglobin, thanks for reply, this is more worrying that Sealion is straight forward, typical project with FPSO, not much technical challenges, low tax and low royalties, still we are not able to develop in 10 years,
the point i was trying to say is HUR managed to do first oil without too much wait and without giving away 60%. Where as we gave away 60% and we are still waiting for FID let alone first oil.
I understand we are not comparing apples with apples but sharing frustration of extremely slow progress.