Member Info for YingTong

Hello Ken, I hope things are not fraught in Hellmand. My overall perspective at the moment:- 1. NF. Still in a holding pattern. I think the money ran out from the last attempys. But it was worth a shot. No cost to Nuog. 1070 cannot be progressed in any way and BSE mentioning minerals makes me think they have changed tack. 2. Marginal seems to be bobbling along, hawking the concept. Brazil (TM) no longer looks positive. So little has been said about it. But IVO is on the ground (pn a commision basis I believe). He might come up with something, but it is back to early stage. 3. GTW I had high hopes of something with Schooner/Ketch. But the decomm report filed at OGA suggests otherwise. It is not impossible of course. Any transferrence of a field does nothing to reduce Faroes decomm liability since it is joint and several. But it may defer it. It starts to feel a bit like "the next big thing" from them. I have no doubt there is activity trying to further it, but I suspect prospects are at an early stage. GTW will be big in general. But it is early yet. Could be one of those overnight successea that is some years in the making 4. The limited raise does give me cause for optimism. But the structure of nuog/mfdevco is such that Nuog cost going forwards now should be pretty low. I think progress if/when it occurs will be sudden and unexpected. But ultimately revenue looks most probable to still be some way off and that gives a funding problem. Lack of delivery gives a credibility gap with forward projects, that does imy whatever solutions they offer are going to be innovative which is a challenge in itself.

It seems doubtful that Novum has indicated they will take anything (and they are only entitled to participate if they hold any shares which is unknown). The normal case is that a broker would underwrite a rights issue but it is uncommon for them to underwrite an open offer. In this case it is definitely not underwritten (see page 14 of the circular). "If applications are made for less than all of the Open Offer Shares available, then the lower number of Open Offer Shares will be issued." (N.b. I assume this 'trumps' the contradiction on page 23-4 which does talk about any unallocated entitlement being placed. Just a poorly put together document from proforma paragraphs).

Regarding the open offer. It hasn't been announced, merely that it will be announced in due course. There is therefore no record date as yet. It is rhe holders as at the record date which participate. Record dates cannot be prior to the announcement, otherwise people who have sold could particupate and some current ones couldn't. For size it will be for 83m new shares. (Actually it could be more and still remain compliant) There are two likely ways that it will be structured - both of which are compliant with the BoD undertaking. 1) Pro rata to the shares in issue. This will be approx 6% 2) Apply for what ever you want. In which case they will firstly allocate for that amount. Excess applications will be pro rated across the unallocated shares. Any excess cash being returned. My only minor issue is whether or not they can circumvent the listing rules requiring a full prospectus. This is an expensive business since it requires an upto date CPR. Hopefully they can since it is not going to be a "full" open offer in that it should only be for existing shareholders (investment trusts do this through their savings schemes so there should be a fairly simple way).

Wookie, if the BoD stick to their undertaking given at the agm and minuted and documented (which I would expect) then the answer is quite clearly Yes. They were offering participation on the same terms. The intent is crystal. However if BoD renege then I am unsure what avenues would allow legal recourse. It would not specifically be a breach of company law, but would arguably be a breach of the directors fiduciary duty. The fca might be vaguely interested (though frankly I doubt it). Ultimately the directors would be personally liable for individuals losses. But enforcing that would be via counry court I feel. With no costs.

KR1, Hopefully it will become clearer exactly what they are proposing in the fullness of time. But at the moment OSX (as distinct from the OSX bondholders) hold 35 (I think) percent of Dommo. So they have that equity interest. Plus they have the income from the charter. This is heavily exposed to upside of additional production after redevelopment costs of TM are paid. This doesn't sit too well for the bondholders. They are looking forctheir coupon and repayment of the capital at the agreed daye (whenever that is). Given the words in the missive it seems reasonably likely that OSX leasing want some sort of partner which can give them a smoothed stable return (eg not subject to the vagaries of oul price changes). They would perhaps do this in exchange for some incoming cash. In effect they would perhaps be prepared to lease the platform to an operator. The new charter agreement seems to make this plausible with the way a return to a lessee or similar could be generated. For the bondholders it is about stability of their return, not specifically level of return. There is also, from dommo end of things the redevelopment. Repayment of the amortised costs is senior to any income under the charter agreement. This gives potential for an operatore to benefit from both "ends". I.e. repayment with a low risk being most senior by virtue of a redevelopment deal with dommo. Also a leveraged risked return by virtue of part 3 of the charter agreement by doung some sort of facility deal with OSX leasing.

They didnt sem to have added leases. Simply extended the period for which bids are invited. Given it is cnlopb it is all offshore anyway which is not nuog focus. Nuog do not state NF as their mani focus, just a focus.

From Stamdata it would appear the 50m option buyout has occured. Whilst there are elements of the new charter which I find confusing (in effect revenue from increased production goes 80% to OSX and 20% Dommo) it seems reasonable to assume that the redevelopment should be progressing. All still to play for and the financial constraints on Dommo are such that they have to partner with somebody.

Seadog, You can get live prices and trades for a short peruod through advfn. Use the monitor tab. It times out quickly though.

Seamonkeys, Out of interest what time was the trade executed ? It should have been reported within 3 mins (as it wasnt over 6 x NMS). The fact is appears as a sell is simply because it was under mid at the time of report. Any buy/sell indicator is just a guess.

Alert, An obvious issue with GTW is getting the Electricity ashore. Also ensuring there is adequate capacity for it. The nearer it is to the relevant infrastructure then the better the prospect. (It is not impossible for new discoveries to be developed as GTW, just depends in local infrastructure). There is a lot of wind power in the southern north sea. Its new. It is accessible. I passed through the area fairly recently and aas surprised by hiw much there is off lincs/yorks. There is also quite a lot of gas production. Those that are producing through existing gas infrastructure are not particular prospective in my view, but some may be. With the conoco closure the obvious implication is that the aggregate production from the 25 odd fields producing through it no longer justify it. However a number of those fields are still economic, and may well be for many years to come. Those are obvious prospects. I havent researched what supplies yet to make a list. But I imagine there is one in Manchester. Looking at the two field that were mentioned part of the decomm plan was to convert the platform to prkvide support service to Hornsea 2 and 3. This could potentially further delay a large amount of the decomm for decades. There are also gas discoveries in the southern north sea which are sub economic but may become economic for gtw due in part to increased infrastructure. I havent really looked much in northern noeth sea becausw it hasnt been mentioned but there are at least 2 norway scotland links and grid connections under planning/construction. Those that are producing

At the time it was set up my guess was that it was going to own or lease a platform. It is common to swt SPVs up in this way to ring fence assets and liabilities. I had assumed this was for a brazilian field - which would likely be set up in a similar way. This was borne out somewhat ny the RNS which mentioned a china facility. Sunsequen to that, with the expectation that the target is TM it became a little less clear with the new charter contract. However I would still expect one co to contain the means by which production occurs (e.g. rights to somebody else charter contract, or a platform lease or similar). Another co would then hold the asset which is being produced from. This could be the field equity interest or rights over a production contract or some such. This sort of structure allow the tailoring of returns to the relevant stakeholders mor easily.

If you mean by "option" that "there is the possibility" then that is true (and in my view despite the previous formal option which was not persued) I think it is something that is moderately likely to actively considered. If you mean "there is a formal option with terms that are being negotiated" then no.

Yes, the fields that were mentioned are southern north sea.

I was musing what may be in it for a field owner to hand over a field. Potentially quite a lot. The petroleum act does not allow a "clean break" from a field because, in the event of a default, the liabilities go "up the chain". Thus an operator remains potentially liable and therefore tends to require security against those costs (the oga can also demand it and are sitting on about 750 m from 8 operators. It is comparatively uncommon for the oga to do this). This has stymied NS deals for a few years now. One thing people are doing in order to get deals accross the line is retaining the decomm obligations (a recent bp deal did just this). There are also deals recently done where the seller has offered loans to get projects going. This seems a bit counter intuitive, why would an owner finance somebody else to extend it ? Money. Decom costs can be offset against both current and prior profits. Both CT and PRT. Obviously only when the money is spent. It is worth between 35 and about 50% of the costs depending on whent the profits were generated. The OGA is also committed to reducing decom costs by 25% over about 5 years. I don't know what the estimated decom costs are for the 2 fields mentioned. I suspect region of 50 mln gbp. The fields only stopped producing because conoco closed the depot so there is low technical risk. There is risk of forward change to the taxation regime. However since late last year it has been possible to agree a "decommission bond" with HMRC. About 90 of these have already been agreed. What this does is put a floor under the relief available at what was available in 2013. This protects an operator from unfavourable taxation changes but lets them benefit from favourable ones. Also, where decom liabilities are move in whole or part to a new operator the "profit and taxation history" can also be tranferred. This removes a substantial issue which would potentially restrict the reliefs available to a new operator. If MfDevCo had a plan for 5 years that delay in decomm effectively frees up 50 mln of cashflow for 5 years. Value this available capital at a modest 4% thats 20 mln. Decomm reduced by 35% thats another 17mln. So an additional return to an operator of around 37mln. All in return for a commercial loan to an enabler like MfDevCo. Security on a loan may be an issue, but I guess that can be worked out. OGA desperately want this sort of thing to happen. So, the question is whether the redevelopment cost can be justified by the strike price for the electricity. This is agreed for quite a long period in advance so insulates from commodity price fluctuation. A deal structured in this manner derisks the field operator and removes the two main hurdles which have caused such big problems in NS M and A activity.

LT, I suspect that the OGA would want the cash ring fenced in those circumstance. However I am trying to figure exactly where the liability goes in a generation project. I think at least some of it falls elsewhere. This was to allow entrants to be smaller companies who do not have the same financial strength. If this is the case then it may, in effect, be possible to receive some cash from a field owner this then develops the project. The decomm costs effectively being paid over time by a reduced strike price for the electtricity generated. If I finally get my head around it and the above is accurate that gives nuog much enhanced abilities to get projectsup and running.

Sharelock, I agree it seems inevitable that Atlanta will be lost. There were/are plans for more Atlanta development and yet more cash calls end Q1. I imagine that is the last chance for them to have any slim hope of recovering the situation.

I don't think there is any fresh news whatsoever on the Dommo Atlanta dispute. The release on 1st Feb is not related to the substance of the dispute. The picture is no bleaker yet than it was with the arbitration result.

Barry, Regarding gas at Garden Hill. GTW had been mentioned years ago as the planned method of dealing with the gas. It is in the prospectus. Specifically an 8mw plan. Enegi inc as a predecessor was also described as a gas to wire company.

Gary, I think it is probably actually neutral on what price sensitive information he is in possession of. One would expect a director to be in possession of some permanently. If the rule was absolute (it isn't) then an executive director would never be able to deal. Clearly that is not the case. My understanding is that the prohibition is general and caution is required and clearances obtained. I think leaving the company would fit. I will get round to rereading the MAR at some point.

Jarem, What makes you think Nuogs 50% shareholding in MFDevCo gives them any forcible power in a transaction. ? Of itself it doesn't. The BoD of MFDevCo contains no representation from NUOG. The 50% will allow NUOG to vote against anything that must be voted on (wonder what the articles say about deadlock ...). But it doesn't, of itself, give any power whatsoever over the BoD. In principle the BoD could decide to buy a MickyD franchise and there is stuff all NUOG could do about it as a result of their shareholding. It is, of course, possible that there are agreements in place which may restrict what the BoD are entitled to do, but nobody can know.