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The point I crossed the ‘no hope’ Rubicon, Austin, was actually directly to do with PMO. Malcy was interviewing TD, and he asked about Sealion. Until that point, TD had been all genuine enthusiasm and positivity about other prospects. At the reference to Sealion, his entire demeanour changed to unenthusiastic, closed, even shifty. It was very telling.
I’m sure you’re right. Our great deal-maker managed to strike a deal which saw him put us on the hook for 40% of any costs deemed ‘necessary’ by PMO, without establishing any responsibility on PMO to stick to a timetable. A blank cheque PMO can cash over and over again. Handing the means to bankrupt us to a company which has every incentive to bankrupt us. Worth every penny of his millions, is our Sam. What a titan of the oil business.
FFS.
The question I'm happy to be entirely boring about is this: what are they spending our money on? The lawyers are doing the OM case on a no-win-no-fee basis. Absolutely sod-all is happening in the Falklands. It doesn't cost much to sit and wait for UKEF to reject the loan application. Where's the cash going?
It seems to me, digging through the annual reports, that a ridiculous proportion of the cash burn is money going straight into Directors' pockets in the form of salaries, pensions and bonuses. Throw in their expenses to travel to meetings in and about places we should never have been around the Med, and the sums are eye-watering.
We aren't being driven towards bankruptcy so much by our operations as by our own directors who are simply transferring a large amount of the company's cash to themselves.
It's not just that though, is it Rob? The judgement of Moody is on how he responded to those external challenges. Or how he prepared for them.
So PMO's troubles affect us because, incredibly, Moody didn't ensure there was a clause in the farm-out agreement involving either a time limit for action, or compensation for delays. Which meant Solan's troubles became entirely our troubles just as much as PMO's.
And the oil price crash was external. But we know that even the biggest oil companies responded to that by cutting every cost they could, so as to ride out the storm until the price rose again. Moody managed to spend at an accelerated rate during the low period, and only cut back when suddenly the buffers appeared at the end of the track, as oil rose.
Ultimately, though, it was his job. We've all had jobs where external winds blow us off course. It doesn't stop us being held responsible. Countless excellent execs have found themselves looking for a new post after an external factor screwed them over, even when they'd done everything possible to predict and mitigate for that. That's just how responsibility works.
Except for Moody, it seems. He's taken the decisions which have diminished a cash pile which could have seen us through the lean times. He took the decisions which gave our future entirely to a heavily indebted PMO, with no incentive to develop the field. He has failed to find a way of moving this any further on than it was in 2013. And throughout it all, he's continued to pay himself handsomely.
The 2018 annual report records him as paying himself a basic salary of £373k. But he also awarded himself a bonus of £93k, and a grant of 2m free shares, which is no small amount even at these shocking levels. And just to add some icing on this particular cake, I reckon a fair few investors probably haven't clocked this gem from the same report:
"The Committee previously agreed to remove progress towards the Final Investment Decision on the Sea Lion Development from the Executive Directors’ bonus targets."
So Sam and his chums can still have their bonuses even when FID doesn't materialise. Again.
This company has been a cash cow, and Moody has milked it dry through incompetence and greed.
Wasn't aimed at other LTHs. More at any poor new saps who might be inclined to believe some of the mad ramping of certain posters.
However, mostly just venting, which I feel fairly entitled to do after watching it hit an all-time post-discovery low. I don't say much here, considering how long I've been in, and I'll be getting back in my box soon. But I'm done believing in fairies, or that Sam Moody has any plans for this other than ensuring that he can pay himself a few more millions before the lights get switched off.
If we can get him out, and try for an actual competent CEO who might even get us a fire-sale price of 30p in a takeover, then it's now worth doing, because Moody will take this to zero and walk away whistling.
Or the following Monday. Or the Monday after that. Years now of no news, falling share price, and a company so unwilling to communicate with investors that they could be mistaken for Trappist monks.
Those who still believe there'll be some sort of big announcement next week which explains the crashing share price, all I can offer is this:
Annual Report 2013: $298m cash, $722m net development carry. "FID expected to be around the end of 2014."
Annual Report 2014: $247m cash. "Final project sanction during mid-2015"
Annual Report 2015: $110m cash. "Revised terms" see $337m of the development carry "deferred". "Project sanction decision in mid-2017"
Annual Report 2016: $81m cash. "Targeting FID in mid-2018"
Annual Report 2017: $51m cash. "Final Investment Decision by year end 2018"
Annual report 2018: $40.4m cash. "Securing funding is the last major milestone before Sealion can reach FID". No date given for FOD. First signs of distress appear: "However, beyond the 12 month going concern assessment depending on the timing of sanction for the Sea Lion development, in the absence of any mitigating actions, the Group may have insuf?cient funds to meet its forecast cash requirements. Potential mitigating actions could include non-core asset disposals, collection of arbitration award proceeds, deferral of expenditure or raising additional equity."
For anyone wanting to see this for themselves, go read the annual reports. They're all there online. They've been cutting and pasting the same panglossian nonsense since 2013. The FEED work is always progressing, or nearing completion. The confidence is always confident. The field is always world class. The future is always rosy.
Yet they've blown $250m+ in cash in 5 years. And all we have to show for it is the vain hope that we'll get a compensation payday of some sort from a legal case, and the UK government - currently in chaos, by the way - will somehow ride to the rescue and unlock the funding we've been so utterly incapable of raising for our "world-class" asset.
$250m spent. On what?
Sam won't mind. He's paid himself his millions.
Of course we're all greedy - that's why we're here. But none of that takes away one simple, central fact, which is that it has been Sam Moody's job to return value to shareholders. Yet he has destroyed value in a way which will make historians of the stock market gasp at the sheer scale of the destruction, and the apparent immunity of its architect.
We need to ask him - where's the money gone, Sam?
A billion dollars of real and theoretical cash in 2013, just 6 years ago. Now we're at $40m and falling fast. Where's the money gone, Sam? What have you spent it on, apart from yourself?
For those who are still defending Moody's absolutely criminally bad performance as CEO, consider this.
In the 2013 Annual Report, RKH declared a balance sheet of $231m. Plus $722m worth of development carry. Plus $48m exploration carry. They came under a lot of pressure from some institutional investors to distribute some of that cash to shareholders. They refused. Here's the link for those who want to read it and weep.
https://rockhopperexploration.co.uk/wp-content/uploads/2016/05/RKH-Annual-Report-2013.pdf
Here we are in 2019. We've just had a fire-sale of an unwanted and unsuccessful Egyptian venture. We're relying on a court settlement to recompense some losses on the Italian disaster. At the end of 2018, RKH declared a cash balance of $40.4m. Few know exactly how much of the "carry" Moody has since given back to PMO, because it's been deliberately obscured. But we certainly don't have that much value any more. We are praying for a helping hand from UKEF to enable FID to happen, and that is our last throw of the dice.
In 6 years, Moody has overseen a destruction of value and cash which must be close to unprecedented even on the notoriously crooked AIM market. More than $200m blown on what? Further hundreds of millions worth of carry, given away for what purpose? More millions blown buying FOGL, which has no value to the company unless Sealion is developed first. Millions more blown on the Med, which was a region nobody bought into RKH for.
In the meantime, Moody has pocketed multiple millions for himself in salary, bonuses and free shares.
If he had an ounce of integrity, he'd have resigned years ago. But his nose remains firmly in the trough.
I don't have to justify myself to you, Nigoil. Or to anyone. And I certainly don't have to prove anything to anyone. After 8 years there are enough people who've seen me post to know I'm genuine.
I'm just a PI. I bought my first bunch of RKH shares when they were at £3.20. I bought my last - I think - just before the abortive Erik Raude drilling disaster, probably around 60p. In between I bought a bunch more to "average down", or because I believed Moody when he said FID was just around the corner, or some other "catalyst" for a return to the glory days.
I don't post much because after 8 years there's nothing much left to say. I'm at a six figure loss on paper, which has caused me some quite serious issues both financially, and also in terms of mental health - feeling such a damn fool for risking family money on something this unsafe. I've seen plenty like you before - I used to be one myself, posting lists of all the positives and certainties which would see the SP rocket, dividends get paid and us all become millionaires next year, Rodney.
The fact is that every investor in RKH in the last decade who didn't get out at the top of the last spike at the beginning of 2012 has lost money. I'm sure traders who short have made plenty. But every investor, who puts money into a share hoping for value growth, has lost money. For 8 years. And over that 8 year period, the only constant winner has been Sam Moody, who has paid himself FTSE salaries and bonuses in order to deliver 8 years of failure and value-destruction.
Those are the facts. What you post is wishful thinking. Maybe it'll come to pass. But based on the last 8 years, it is a far, far more likely outcome that deadlines will continue to be extended into infinity, Sealion will remain undeveloped, PMO will continue to squeeze their helpless junior "partner", and Sam Moody will not care at all, because he's made his millions from his failure.
It's certainly seeming like a new all-time low for the quality of this board.
But, to be fair, the quality of this board increasingly seems to reflect the quality of RKH's board. I bought in here nearly 8 years ago. In that time, we've dropped from £4 to less than 20p. A 95% value-destruction. We've also seen every single commitment made by the Board in that time be broken:
1. They said they'd join the main markets at least twice. We're still on AIM.
2. When I bought in first oil was confidently stated as 2017. Well....
3. Remember the Erik Raude drilling catastrophe?
4. They diluted us to hell to buy FOGL when it had no value even in the longest of long-terms, without the prospect of any development of Sealion
5. I've lost count of how many times we've been promised FID. It's always just over the horizon in the next 6 months. Or the next.
6. We bought Med assets which nobody bought into RKH for. The Italian one turned out to be a dead dog, landing us in the international courts. The Egyptian one we bought, struggled to get paid for, and are now selling.
7. We blew off Anadarko, who would have made this happen, and accepted a deal from PMO, who couldn't make this happen.
8. We gave away huge portions of the farm-in deal, back to PMO, in a desperate attempt to get them to move. They took the money and laughed in our faces.
Throughout this time - an eight year downward trend, which must be heading for some sort of record, surely - not only have Moody and his fellow directors paid themselves very handsomely, as if they're running a major oil company and delivering profits for shareholders, but they've resolutely refused to put their hands in their own pockets to buy the company's shares. Every time it's raised, they plead some sort of commercial activity which prevents them. Which is ironic, given the relative absence of commercial activity in the last 8 years.
Like most PIs here, I'm guessing, I'm now in a position of hoping for a Hail Mary, where somehow, something will happen to create a big enough spike to get out without catastrophic losses. But every day I have less hope of that. Sam Moody and his mates have fleeced us like a boiler-room taking the savings off pensioners. He's made himself a millionaire many times over, in what effectively amounts to a direct transfer from mugs like me, who thought they were buying into a company which was going somewhere. Turns out the only place it was going was into Moody's pocket.
I only have some 180k shares, which were worth a sod of a lot more when I bought them. But if there's any movement to get Moody and his mates out, and replace them with people of integrity who at least have a remote chance of saving some of our cash before Moody spends it all on himself, then count me in.
I think the issue is that Moody is safe because there are few powerful institutional investors left. There used to be a high proportion of this share held by IIs, some with significant holdings. They've mostly offloaded either completely, or gone under the threshold. So I think the great majority of shares are now held by PIs. PIs are good at moaning on internet sites, but understandably terrible at organising any kind of actual opposition to boards. It's just too hard to get enough people interested and active. Which is why Moody is able to treat this as a personal cash cow which he's milked for many millions of pounds for himself.
Simple issue for me is that it's all very well saying "but oil price" and "but legal delays". There's always a "but", and I'm sure individually they're all reasonable. Yet the job of the board is to return shareholder value. This board have done the exact opposite. They have overseen a catastrophic destruction of shareholder value. And throughout that time, they have personally enriched themselves from a company with shrinking cash balances, and made deals which only seem to have accelerated, rather than slowed, that shrinkage. If they'd said, at any point "Look, we know you're suffering, and we're not delivering. To show our commitment we'll reduce our pay to just four or five times the national average, rather than twenty times. And we'll stop awarding ourselves free shares but instead use some of the money we extracted from this company over the last decade to buy shares." Then I'd have more sympathy. But instead they keep taking big salaries and awarding themselves free shares while returning nothing but losses to the shareholders they purport to serve.
I see no sign that Moody sees RKH as anything but his own personal magic money tree, and the shareholders as mugs.
No, wasn’t possible unfortunately. Each year I swear to myself I’ll arrange to go to the next, and then it rolls around and I never have made the arrangements in time!
Cheers comertoes Having been on the other side of the fence as a civil servant assessing the bids and handing out the grants, I’ve seen organisations say what Moody said today plenty of times, often in the same words. I’ve still ended up turning them down though, depending on the size of the pot and the priorities of the Minister. I wouldn’t read anything in to those words. I’m more appalled at the fact they still haven’t submitted the bid. As others have said : what do they do all day? Or, perhaps, what do they do all day which justifies the enormous FTSE-sized salaries they pay themselves?
Thing is, ‘everything is in place’ for me to have a Ferrari except the funding. Nothing matters except the funding, because nothing happens without the funding. At the risk of attracting the ire of the eternally positive, there’s no escaping the fact that Sam and his chums are the ONLY people to have benefitted from Sealion. They’ve pocketed millions, while most shareholders have lost their shirt. And they’ll continue to pocket millions right up until the day they shrug and walk away, leaving us with nothing.
No. Even if he wanted to - don’t believe everything you read in a hostile press - the PM just doesn’t have the power to hand bits of land around like it’s the 18th Century. Parliament would be involved, and there’d be no majority in the Labour Party for unilateral action, let alone across Parliament. The biggest political threat is the growing move away from carbon towards renewables. That’s why PMO/RKH need to take the decision now, or they’ll miss the boat.
Question 1: What proportion of total outgoings over each of the last five years has been Board members' remuneration packages?
Question 2: Why have so few Board members made any significant share purchases during the last five years?
Question 3: What financial penalties have Board members accepted as a result of the failure of the last drilling campaign, the failure to develop the MOG "assets", the failure to obtain a farm-in partner with the ability and inclination to develop Sealion, and the failure to meet *any* indicative timescales for the development of Sealion?
Question 4: Given a catalogue of failure to deliver any returns for shareholders for the last five years, and the ongoing lack of any deadlines for the development of Sealion, will Board members consider a reduction in their remuneration packages until such time as they deliver any returns to their shareholders?
Ah, matey, there's patience, and there's being preserved in formaldehyde. Seven years since I first bought here, when first oil was going to be flowing in 2017, and share price predictions of £10 were making my eyes ching like cash registers.
In the long run, maybe it'll make it. In the not too long run, however, I'll be dead. So I hope not much more patience will be required.
rpoodle, what makes the sting even more painful is that a very large proportion of that cash burn isn't activity designed to make us all richer, but simple salaries and bonuses paid to the directors who have managed to do really very little to enrich anyone but themselves since the farm-in.
If there is dilution, it is hard to see it as anything other than a direct transfer from our pockets to the already-bulging pockets of Sam & Co.
Thought I'd make my initial post today.
One of the side-effects of the ii makeover disaster is that after literally years of checking the RKH bulletinboard every day, like a dog returning to his own vomit, I've given up since the change, because I find the format so awful (and because it doesn't show even the sp anymore!).
So when I glanced in here and saw RKH was up 20%, it was an actual surprise. Quite possibly the first pleasant surprise in the 5 years or so I've been invested in here. Huzzah.
Only another 400% to go from here, and I'll be in profit!