Imaginary RBL Discussion6 Oct 2020 20:54
Rahul - We have conducted quite a detailed review of the Kenya asset, and have shared every aspect of our consultants findings with the Kenya Government. We have looked at pipelines, local refinery and returning to trucking, we discussed linking up with the Uganda pipeline, operating the asset at low levels and in the end arrived at the need of a major oil company taking our place on the project and delivering a scale of operation that is on par with the plans now on-going in Kenya. One major oil company X gave us an offer less than what we valued and if we took that offer it would be necessary to proceed with a different proposition which we can put to the CMD in December.
In essence we can pay back the $575M from the Uganda sale in two instalments as previously agreed. However, we need to finance 4 in-fill wells in the Jubilee field to secure 75,000 annual production for a number of consecutive years. In addition we want to drill the Suriname wildcat along with another well in Guyana. Additionally we wish to proceed with exploring the South East Jubilee field. It is our belief that the Ghana Jubilee and TEN field can produce an additional 90M of 2P barrels of oil and this resource can be proven over two years. We propose to the RBL that what we receive from the Kenya sale be spent on developing these assets and that with additional investment that we resource the Kenya replacement from whatever we find off South America and the expansion of the Jubilee field. We therefore ask the RBL to consider a revaluation of the timing of debt payments, a revaluation of the company as new reserves are classified and that our productivity, sustainability and profitability is fairly evaluated against the interest that we can pay, the margins we can generate and the debt principle that the company can repay under a new time course with our new strategic development plan.
Of course it may be something very different, but a little imagination is sometimes fun.