Member Info for theoryman

Pointing out a complete mismatch between info in the public domain is not IMO over analysing, it’s a result of basic level DD :)

I think you are probably correct but thinking how I do is the reason I have money to invest in TRP, it has served me well so far and I will keep delving but only when we move on to temporary greens.

The problem with that is the international nature of the IOCs, they could well have access to equivalent big hitters within their own countries.

However, taking your point further, IMO it would send one one of a message to the KRG if they did all line up behind one law firm. Something along the lines of, class action, fancy another DANA outcome? Well stop messing us about then, get your act together!

On a more flippant note, maybe HSF worked wonders, without their intervention there would have been no payment but after a quick phone call it became a late one?

The language re the 60 has hardened IMO. It has gone from an understanding to a provides/d - as in from the company understands to what is below.

“The Cameroon Petroleum Code provides that approval of a transaction of this type should be provided by the Minister of Mines, Industry and Technological Development ("MINMIDT") within 60 days of 21st September 2021, when it was formally requested, which means by Saturday 20th November 2021.”

The problem is that the latest Code in the public domain that I can find is from 2019 and the is no reference anywhere to 60 days anywhere in that. The only reference to a 60 is in contained in Section 60.

JA in his email to Pepsi3, did mention a recently updated version of the Code, so maybe that is where the issue arises, a change in the wording.

I know that there have been references to the speed at which things progress in Africa even under normal conditions but with the pandemic they will probably have got worse..

From Wikipedia, “ Herbert Smith Freehills is regarded as one of the world's most elite and selective law firms, with a particular recognition in dispute resolution.”

With the KRG being their sole customer, with a track record of reneging on every payment agreement, in addition to being their host; maybe they want a law firm with that speciality :)

Beluga Energy’s proposed share of the PSC is a non-operating working interest of 49%, with TRP keeping 51% as operator.

Deductions:-
1 This is not a change of control because that still rests with TRP, it is a transfer of some of the rights and obligations outlined in the original PSC.

2 This is dealt with by Clause 20 of the Code and not Clause 21 - evidenced by, “…so for example approval for a transfer like this is a relatively simple process under section 20 of the Code…” from the email.

The latest version of the Code I can find is from 2019, it is a scanned version of the original document and therefore some of the characters do not transfer under Copy & Paste, I have edited it back to what is hopefully the correct version.

“SECTION 20: (1 )A petroleum contract holder shall submit to the Minister in charge of hydrocarbons for prior approval, any deed or draft thereof, whereby the holder assigns or promises to assign, in whole or in part, the rights and obligations resulting from the petroleum contract.
(2) Contracts or agreements on the assignment of rights shall be entered into after the prior opinion of the Minister in charge of finance, subjcct to the suspensive condition of obtaining the approval of the Minister in charge of hydrocarbons. Any deed executed in breach of the provisions of this Section shall be null and void and lead to withdrawal of the authorization and/or forfeiture of the petroleum contract, in accordance with the provisions of Section 126 of this Law.”

Deductions:-

3 This is a two stage process, get the approval of one Minister (Hydrocarbons) AND also get that of another, the Minister (Finance) before you proceed.

4 There is no mention of any time limited cut-off, 60 days or otherwise.

5 These approvals therefore have to be active ones, as opposed to passive ones derived from a deadline having been reached without disapproval.

6 No news is neither positive nor negative, it merely reflects that the process is still on-going and gives no clues whatsoever to what the final outcome will be; either good or bad.

@Pepsi3, in my opinion it was neither negative or positive, it was neutral - very informative and reflected what the company understands to be the case rather than the certainty some posters seem to claim.

Since we haven’t been informed otherwise, seems reasonable to assume that the process is still ongoing. Again I see this as being neutral, the positive would be confirmation it is completed successfully and the negative being it’s all gone **** up.

@Moneymunch, I agree with that, they will not want to vote until they know what they’re voting for.

The company can’t move forward until both conditions precedent are known to have been met - one without the other has not triggered that outcome.

IMO there will be no RNS from the company until both conditions precedent are known to have been met - as in logical AND.

BB, the company could clarify so many points with very little effort.

1 Publish the Cost Recovery Pool, net to GKP, in at least the HYR and FYR results, preferably adding extra updates in every Presentation even if those are marked as “estimated”.

2 Ditto for the R-factor as used in the PSC.

3 A worked example of how for example the receipts for the August invoice were arrived at.

BB, you might well be correct but why hasn’t that effect shown up in previous months when there was volatility in the PoO?

Just when I thought I had nailed down a “known known”, I can’t even rely on that anymore :)

Wrt the RNS dated 21/09/21 and notifying the market.

A They could have written, “The Company will notify the market when each condition precedent has been met.”

B They could have written, “The Company will not notify the market until both conditions precedent have been met.”

Instead the company wrote, “The Company will notify the market when both conditions precedent have been met.”

Which one of A or B above applies?

On reflection IMO it really is quite important. If there is no RNS on Monday after the 60 days have expired, what conclusions, if any, can be drawn?

@PUTUP, so where am I going wrong? And if I’m not I have a suggestion at the end.

Gross arrears should be :-

20% of 31days @ 41.2kbopd @ (70.75-50) per barrel

Calculator gives $5,300,380 but since it is limited to 3 sig figs by the 41.2, that gives $5.30 million.

Payments are only given to 2 sig figs, that’s $5.3 million.

The 5.4 cannot be as a result of any rounding error from 5.300 so it must come from either the 41.2 being higher or the official figure of $70.75 average of the Daily Fix, available from two sources, wasn’t used like it usually is.

Now if it was really 42.1kbopd then everything fits nicely for the gross export sfter monthly fees and the arrears.

Surely the 1 and 2 haven’t been swapped by mistake? Well it did happen once before within the figure a key number of shares :)

@nufc9, hope you are wrong but looking increasingly likely that you aren’t.

There is hope, the previous broken agreements were specific, 10,15,30,60 days as opposed to 3 months which varies in length.

I thought they were having a dig that payment in early October included some oil lifted in early July I.e. 3 months before.

@PUTUP, both the export and arrears payments were slightly higher than I had calculated.

The arrears one has nothing to do with the internal PSC workings, so that is usually simple to calculate using the known figure. For August I get the GROSS payment to be 5.3 and not $ 5.4 million.

The only way I can nudge it up is to assume the Av bopd for August was actually above the 41.2k given in the HYR presentation on 2/9/21. One explanation could be that when the figure was calculated for that document and finally reconciled for the invoice, there was a difference.

Could you, or anyone else, have a look at your figures and see if you get the same issue?

The irony is that the “special cash flow” which the company is experiencing ,is money that should have gone to the pre Restructure Bond holders to repay the capital borrowed, assuming the company had survived without the DFE.

That money instead is being paid out to all shareholders as buybacks and dividends and some of those shareholders are the Bond holders.

On the lead up to the Restructuring, some of the debt was changing hands at 50c on the $ but when the DFE went through they were allocated shares on the original $.

So some of them bought the debt at half price, got allocated shares as if they had paid full price and are now getting their risked money back, whilst still owning a chunk of the company where the market values each share at £2.

There are allegedly some UHNWI involved and I think I can now see why they are not just HNWI :)

IMO there is too much uncertainty at present involving the relationship between the KRG and the CGI, for any IOC to take on the risk, unless it is at a knock down price.

There are three areas that need sorting IMO and if they are then the price needed to be paid would be much higher.

1 Any threat of the PSC becoming a TSC is completely removed.

2 The budget agreements between the two governments are applied and run smoothly creating an atmosphere of mutual trust and stability.

3 Shaikan oil goes through SOMO and payment is within 30 days of invoicing - an end to this 10, 15, 30 and 60 days broken agreements

Punishment non-payment or imminent mega bundle RNS , I’ll add KRG have possibly just run out of money again?

VS, good reason why taking any monthly figure and multiplying by 12 to project an annual figure is probably not a good idea.

I tend to use 11 and rum 12 and 10 as “boundaries”.

I think in recent times 10 is the lowest number of payments in recent calendar years but of course they did once miss 4 in a row in one running 12 month period.

LS, I’ve got low $27 million in total, 23 plus 4 and the bits.

Next month once the payment arrives, we can reverse calculate the production for Sept even if the Ops update comes a bit later on.

Just had another look at

https://www.towerresources.co.uk/wp-content/uploads/2020/03/Summary-Reserves-Resources-Valuation-Report-Tower-Resources-Cameroon-Assets-Effective-Date-10th-March-2020-Publication-date-12th-March-2020-Final.pdf

Seems I was completely wrong about the 80% figure.

The ones I found previously were as I described the commercial variety BUT there is one for Phase 1 on page 12 which is the probability of development, which unless I am going gaga is a before drill result value.

I have never seen it before as a single stand alone figure, it is normally calculated from the given GCoS * CCoS in a table.

So apologies if I have misled anyone.

On the one hand it makes me very happy to be wrong but on the other I don’t see how it fits in with the Key Risks on P27 - questions raised about the range and quality of data previously collected.

A simple explanation could be that where they are targeting with the first drill seems well understood, the questions lie elsewhere.

Hollybean, the 80% that keeps getting referred to is NOT the chance of finding commercial oil BEFORE they drill.

IF they find oil that flows, i.e. it’s a Geological Success THEN there is an 80% chance it can be developed commercially.

The GCoS here is much better than if it were a wildcat because of the data that already existed, it is much more like an appraisal well BUT these are by no means slam dunks.

As ever, DYOR.

Given the rise in PoO, that 80% is probably a bit higher, as explained in a post below.