Member Info for ZYX098

Hi Phil,

Yes, the presentation was issued in Jan 2023 and by the time I saw it in late 2023, I thought that, apart from anything else, the cost base for drilling was already substantially out of date.

The oil industry was indeed still recovering from the effects of Covid, but now had also been hit with the effects of Russia invading The Ukraine.

However, to say that balance sheets had been repaired is not correct.

For example, Shell lost some $42 Billion during Covid and their current debt pile is still in the region of $40 Billion. Similarly for BP and other large Oil Co's.

Remember, the oil price cratered during Covid, even going -ve (albeit for only one day on technical trading).

Harbour Energy are still carrying around $5 Billion in debt, and the imposition of the EPL certainly hasn't helped.

In fact, because of the way that production taxes and the EPL are levied and are unable to be offset against losses elsewhere in the organisation, Harbour actually paid an effective tax rate of 108% last year!

You are correct, the imposition of the EPL was ludicrous and was a direct result of Social Media promoting the myth that the oil industry was "war profiteering" or "making obscene profits" from the increase in Oil & Gas prices.

Those promoting those myths ignored the basic facts that the oil companies profit margins are always minimal and typically in the region of 5% - 8% and that period was no different.

However, the media liked to quote the $number profit and promote it as being an "obscene rip off of consumers", instead of looking at the profit margin - which is laughable compared to many other industries (Supermarkets being about the only exception).

For example, the likes of GSK, Unilever and Haleon typically make 20% - 30% profit margin.

Anyway, back to the BOR cost estimate.

Due to the Russian invasion of The Ukraine and the after effects of Covid still working their way through the system, the oil industry was seeing substantial cost increases throughout 2023.

On the project I was on, we saw MINIMUM price increases of 40% across the board for materials, equipment and personnel. In several cases (especially for some of the specialty chemicals), prices increased by over 100%.

We are still seeing these prices and that is why I think that the figures I have quoted are more accurate for the drilling side of things.

With respect to the development concept, their plan was to lease an FPSO.

However, I don't know of any floating condensate production system that exists, never mind one that can handle high pressure gas, in 2,000m of water and in the weather conditions that would be expected in the SFB, so I don't think that's valid.

BTW, recent advances in FLNG technology mean that the very substantial gas reserves should also be able to be monetized.

W.R.T. the 'minimum development' concept, with Navitas opening up the NFB, I now think that this won't fly - a full development would be neede

Hi LTT,

Yes, a 6th Gen is nominally overkill for the SL area.

With the potential length of contract running to around a decade, there would be serious concerns about the fatigue life of a 4th Gen Rig.

The potential length of contract is really a bonus for Navitas, as it would narrow the day rates being offered to quite a narrow window, even for a high spec Rig. Very, very few contracts of that length around these days, so would be very lucrative for the Rig Contractor, even if thy came right down on Day Rate.

If (big if!) Navitas were willing to let the Rig go to BOR after the drilling of the SL 1st phase was complete, BOR would still be expected to pay a share of the Mob costs.

The reality is that the potential for a Rig share with BOR won't have been a consideration for Navitas's selection of the first Rig.

Irrespective, even if we announced a farm in tomorrow there simply isn't enough time to get all the permits approved and long lead equipment down there to slot in a Well prior to the Rig being required for SL drilling.

Remember, just for one Well we'd need to schedule 3 months drilling and another 3 - 4 weeks testing, plus the time to P&A / Suspend and move the Rig to SL.

However, as posted on the RKH board, I think they'll go straight into SL Phase 2 after Phase 1.

If they wait until they've had some production (c. 6 months) before deciding to FID Phase 2, the lead time for the equipment (especially the Trees and Tubing) would leave at least a 2 yr gap before they could start drilling production Wells again.

It would be extremely expensive to demobilise the Rig and Service Co equipment, only to have to remobilise it later - looking at easily $75 Million.

As we know, RKH simply don't have the finances to support more than 1 or 2 Exploration / Appraisal Wells until they start getting cash flow from production - and for the first couple of years most of that will be going back to Navitas to pay down their loans.

However, if they commit to Phase 2 early, then in reality the 'regret' cost if it all goes tits up for some reason will be relatively reasonable. This is because the equipment can all be sold on or delivery not taken in the first place.

So it makes more sense to commit to Phase 2 early, which would also give RKH long enough to sort out their finances to fund the Phase 2 upfront costs.

Tincan - I agree. The first Rig that goes down will be there for many, many years - just on SL alone.

There are so many structures in the SL area that have to be explored / appraised that there is at least another 20 Wells required, which in reality will require another Rig as there aren't enough slots available in the SL program.

That's the Rig that BOR could possibly get slots on - but they'd have to get a license extension from the FIG first - by no means a given now that the NFB is opening up.

Gus0, "when i had a meeting with the board" - was that at the last AGM, along with the other PI's that were

My bad - fat fingered posting. Complete post below....

Hi Rumblefish,

BOR's market cap won't match RKH's for a considerable period of time, simply because we only have a single Well that was never tested on the structure.

We don't even know what the potential flow rates will be, as they can only be inferred from E-Log data.

Don't forget we have Gas/Condensate, which is actually more marketable than the waxy crude in SL.

RKH have done numerous appraisal & exploration Wells in the SL area.

We have one Well that wasn't tested (something that can't be emphasised enough, as it's crucial data we don't have).

Just on Darwin, we'll need to drill and test another 4 - 6 Wells to appraise it properly.

Yes, our % is 100%.

But any farm in is going to dilute that very considerably - personally I suspect we'll be luck to retain as much as 20% with the carry that we'll need for an appraisal program.

Why is BOR's management considerably better? Retaining 100% of something that we can't do anything with is nothing to write home about.

It could be argued that RKH's are better, as they have a clear, mapped path to 1st oil on SL, for which Navitas are lending them most of the funds interest free, with an additional small % at a decent rate.

The rest is funded by the recently announced placing and the OM cash, so in that respect they don't even have to deal with the banks.

If we do manage to farm down, then there's no doubt we'll be beholden to whoever farms in (and undoubtedly takes over the Operatorship) and the banks for future funding, so we'll be in, if anything, a slightly worse position than RKH as we have no funds at all, other than to keep the lights on until the end of 2026.

Saying BOR have a better runway than RKH is clearly not correct. The SL area has some 20 other prospects that have yet to be fully appraised, plus the completely unexplored Sansom terrace to the East and SL equivalent structures in the unlicensed acreage to the North of SL.

The size of Darwin has yet to be confirmed by appraisal drilling & testing.

So yes, it should be bigger than SL (with better quality fluids) but we don't know for sure.

Similarly, Covington and Sullivan could be bigger - but they could also be dry.

Until the structures are drilled and evaluated, it's dangerous to count our Chickens.

Unfortunately 100% of essentially nothing isn't better than the 35% of SL that RKH have.

Hi Rumblefish,

BOR's market cap won't match RKH's for a considerable period of time, simply because we only have a single Well that was never tested on the structure.

We don't even know what the potential flow rates will be, as they can only be inferred from E-Log data.

Don't forget we have Gas/Condensate, which is actually more marketable than the waxy crude in SL.

RKH have done numerous appraisal & exploratioin W

Gus0,

" I went on level 2 and shook it up to 10.70 this morning for a little play"

So you are admitting to illegally manipulating the share price?

Not something I'd be boasting about if I were you...

"Nice to hear from the top that new institutions are buying here" (posted on the same day the share price dropped 5.8%).

So you are claiming that the BOR BoD have told you market sensitive information?

Yeah, right.

If they knew that, where is the RNS?

And if new institutions really were buying in, where is the TR-1?

Otherwise with out current market cap, they can't be buying much.

"FPSO marked down for Darwin East 2030 and farm in by end of year (both industry sources)."

As I've said before, I really hope we do get a farm in soon.

But there is no FPSO "marked down for Darwin East" by 2030 - that's complete nonsense.

It was mentioned as a vague possibility in a World Oil article several years ago.

That article looked at potential FPSO demand world wide over the next decade, and certainly isn't a valid source to use for your claim.

"FID and Farmout news soon".

Farmout - hopefully.

But as I've already explained, zero chance of an FID being announced for several years.

Honestly, the more I read on your posts, the more it becomes clear that you are just an ordinary PI trying to ramp this share.

It's obvious that you don't have an 'in' to the BOR BoD and you certainly don't know anything about the oil industry.

Just remembered;

A couple of weeks ago, you tried to compare BOR with RKH by saying they were both pre-FID.

In reality, RKH are like a farmer looking at his Apple Orchard where the first crop is due to drop in a week or so. BOR are like a farmer looking at a bare field, waiting to see if the apple seeds he planted will germinate.

Gus0,

As an LTH in BOR, I really do hope that we get news of a farm-in soon.

However, posting "FID SOON" is complete nonsense.

There will first have to be an appraisal program of 4 - 6 Wells to get more information, not only on the structure itself but also the data from flow testing and injection tests.

Given the age of the current interpretation and the advances in Geophysical modeling, the 3D Seismic will have to be reprocessed and the results combined with the appraisal program data before a development concept can be decided up on.

Once that has been agreed with the FIG, the detailed design work can then take place. This includes essentially designing from scratch on FPSO that can handle high pressure gas / condensate flows, separation and gas re-injection in the adverse weather conditions of the SFB.

Once they've done all that, they can then get the detailed costings needed and start going to the banks for finance while simultaneously working with the FIG to obtain all the approvals needed.

Only then can they announce FID.

So even if BOR announce a farm in tomorrow and can get approval from the FIG for a license extension (by no means a done deal now that they have obviously had approaches from other Companies about getting licenses), the time frame to get all that done would comfortably take us to around 2030 for the earliest possible FID announcement.

Original post;

############

BOR needs a DW Drillship and even if Navitas get one for SL (they don't actually need one, but the current market means they may get one anyway), there is no chance of it being used in the SFB as it's going to be busy on SL for years.

So we are looking at around $50 Million just to Mob it and all the materials / consumables needed for any SFB drilling program.

Looking back at the previous campaign, we can expect a Well to take 90 days to drill and log. This time, the Wells would have to be tested and that's easily another 20 - 25 days on top.

The spread rate is going to be in the region of $1.25 Million per day, so we are already looking at around $140 Million per well, even before taking into account the consumables (Wellhead, Casing, Mud, cement etc).

He is also correct about the uncertainty in both production and injection rates - testing will be needed to be able to narrow down the potential ranges of those figures.

It is unlikely that an Appraisal Well will be used as a producer - they are drilled to delineate the field, which is often not the best place for a producer. Even so, the requirements for an appraisal well and a production well are different in terms of design lifespan and options for completion.

As for being "off the shelf tech", much of the drilling & completion equipment should be - although it certainly won't be available immediately, as the lead time is likely to be c. 18 months just for the Trees - which is why Navitas have already ordered them for SL even though the project hasn't been officially sanctioned yet.

The Production & injection manifolds certainly won't be - off the top of my head I can't think of a subsea gas/condensate development, so they'd have to be designed from scratch, as would the production and injection flowlines.

Similarly for the Floating Production system.

While there are gas/condensate fields that produce to fixed platforms, I can't think of one that produces to a floater - never mind one in the adverse weather requirements of the SFB.

The surface complexity of separating a high pressure gas/condensate stream shouldn't be underestimated, and neither should the surface requirements for injecting high pressure gas.

Then there are the offloading lines and mooring turret to the shuttle tanker which will need to be designed - again from scratch given the water depth.

So I'm willing to bet that there wouldn't be any change out of $1.25 Billion, just for the FPSO.

I doubt the original concept of just one gas injector and two producers will fly with the FIG, even if the appraisal program doesn't throw up any surprises.

They'll want to see an FDP that optimises production and recovery rates, which just three Wells is very unlikely to do.

As an LTH in BOR, I really, really hope they manage to pull something out of the bag.

But don't underestimate the significant challenges that lie ahead if they do.

Hi Phil164,

Hmmm, Gus0 says you should ignore external noise from “poster experts”.

Unfortunately for Gus0, I have over 30 years in the Oil Industry so have been around the block a few times – which means I can easily see BS for what it is, especially when it’s by someone who clearly has no Oil Industry experience.

I’ll repost here (next post above) what I posted on the RKH board, which prompted Phil164’s question and rattled Gus0.

You’ll note that Gus0 actually doesn’t rebut anything I’ve posted with counter arguments – because he can’t.

Claiming “The plan is fully researched, costed and off the shelf, in addition to being backed up by many experts and external agencies” for a discovery that has a single Well on it (which was never tested) is beyond absurd.

In reality, all BOR have is a broad brush concept with ‘back of the envelope’ costs. Those costs were done when the oil industry was in a severe downturn and are now hopelessly out of date.

The "minimal development" concept itself won’t fly now that the NFB is opening up.

But to humour him;

So Gus0, which “experts” worked on it? Which “external agencies” back it up?

If it’s been fully researched and costed, presumably you can name the design house that did the detailed design work on the Subsurface manifolds, flowlines and Trees?

And the design house that did the detail design on the FPSO and offloading turret?

Which engineering group did the Drilling & Completion designs?

What casing program will they use?

What Completion design will they use?

What method of sand control have they chosen for the Completion?

Since the Well was never tested, what basis have they used for the production rates?

Equally, since the Well was never tested, they have no idea what gas injection rate can be achieved, so what information did they use as their basis for that?

Now, if you go by previous form when someone has caught you out, you will either not respond at all (as when I called out your claim about the license being extended to 2028 - because it's not) or your response will be very aggressive.

If the latter, you will resort to name calling and also employ deflection to try and hide the fact that you have no idea of what you are talking about – like you did with Mogger when he pointed out that you had directly contradicted yourself in the space of two days;

“Mogger, I can't generally answer your ridiculous questions because I have all morons on filter. Unfortunately that includes you, that said I saw your message on my mobile so I will give you the benefit of my expensive time this once.”

Claims to have people on filter, but finds excuses to know what they posted; “I saw it on my mobile”…

Yeah, right….

I like the way you try to big yourself up by name dropping as if you are on first name terms with the BOR BoD and saying things like “my expensive time” – yet you have plenty of t

The sooner Mad Ed gets the boot, the better.

Him and his eco-zealot buddies in GB Energy will ultimately cost the general public £Billions in wasted taxpayer money and higher energy bills.

The energy transition was being handled badly by the last Govt, but under this Govt it's nothing short of calamitous.

We'll be heading for brown outs in 5 - 8 years time unless Mad Ed gets the boot and someone with some common sense and an actual Engineering Degree (i.e. actually looks at and can understand the hard data) replaces him - which are in short supply in the Govt.

As for Houchen, he's pushing the Teesworks plan because it's owned and run by his mates - who he sold the land to at a knock down price.

As anyone who reads "Private Eye" knows, he should be in jail, not the HoL.

Sorry - was running out of characters!

There's no time in the schedule to fit a BOR Well in, even if BOR announce a partner tomorrow.

I'd rule the Dolphin out as the hull dates from 1977, so there would have to be fatigue life concerns for a long contract in the FI.

Nick - Gawd knows where ChatGPT got it's figures from, but they are absolute (redacted).

You might get a heap of junk 3rd Gen semi that's been rotting off W. Africa for a decade for $150k pd, but I'd be surprised.

For this length of contract, even the high spec Rigs will bring their day rate right down - it's a very lucrative contract and there are very few of this potential length around these days.

In this water depth, a dual mast won't actually save you much time. Indeed, it might even cost you time as yes, you can make up the next casing string in the other Mast (usually called the AUX) beforehand, but it takes forever and a day to transfer from the AUX to the Main mast.

As they are batch drilling, won't save much time in running / pulling the BOP Stack either, as they'll just disconnect from one Well and move over to the next without bothering to pull the Stack back to surface (unless there's issues with it).

A Drillship would be less than ideal too. You can carry a ton of casing / materials / mud on them, but they generally don't have much deck space - which Navitas will need for the cuttings handling equipment (I think they're going for a thermal unit, not skip & ship) and gravel pack equipment.

As for any Drilling on Darwin, £60 Million isn't even close.

Looking back at the previous campaign, we can expect a Well to take 90 days to drill and log. This time, the Wells would have to be tested and that's easily another 20 - 25 days on top.

The spread rate is going to be in the region of $1.25 Million per day, so we are already looking at around $140 Million per well, even before taking into account the consumables (Wellhead, Casing, Mud, cement etc).

That figure got a poster over on BOR all bent out of shape, but he clearly has no oil industry experience and likes to post as if he's in daily contact with the BOR board....

I've posted before that while a 4th Gen Semi could easily drill the SL Wells (they really aren't all that challenging from a drilling perspective), any Rig still available from that time would be getting long in the tooth and even if it had been refurbed, would still have the original hull.

I expect that Navitas will state which Rig it is when they announce FID, but in reality they don't have to until early next year.

Last month I was assured "100%!" that it was going to be the Stena Drillmax.

Earlier this year I was told - with equal confidence - that it was going to be the Noble Ocean Great White!

So I think it's safe to say that Navitas are still negotiating with several Companies and have options.

Doesn't matter which Rig, they don't need a different spec to drill Isobel / Elaine compared to the rest of the SL complex.

It costs a lot to cold stack a Rig and equally a lot to take it back out again - the total can easily be $10 Million to do it properly. There's hundreds of suspended Wells in the UKCS than need to be P&A'd and the NTSA / HSE are taking their time in giving approvals, so they'll likely to be looking to pick up those jobs as and when they become available.

The accommodation size for any Rig that would be considered really won't make a difference to the number of people that need to be accommodated Onshore - they'll all be on 28/28 with likely only the casing crews and Fishing engineer spending any time in the base (to maintain and refurbish their equipment). Everyone else in the base will be there full time on 28/28 (apart from any locals).

Given the length of contract and that it's effectively in UKCS jurisdiction (i.e. has to operate to the same standards), I'm willing to bet that all reasonable Rig are coming in a similar price range - $350k to $ 400k pd - irrespective of their nominal Generation number.

Far more important is their hull condition (potentially several years in Northern NS weather, with no nearby shipyards for any repairs) and that it'll pass it's 5 yr DNV / ABS Certification check before mobilsation to the FI.

So the driving factors are more likely to be the T's and C's of the contract (which Navitas don't have a good reputation for being reasonable / flexible), the mobilisation date & how they will guarantee that the Rig will be available, and the rate for any additional work (e.g. Phase 2 or Exploration / Appraisal after Phase 1 Drilling & Completion work is complete.

That's it's effectively in UKCS waters also has the knock on effect that in reality only Rigs currently in the North Sea or new builds can operate in the FI. A Rig from, say West Africa, won't meet the current requirements w.r.t certification and operating standards, although most of the Rigs stacked in Las Palmas should.

For 6th Gen Rigs, the relatively shallow water depth can create problems with station keeping and even though anchored will sometime have to use DP assist.

This is because the size of the BOP Stack (think an articulated lorry tipped on it's end, weighing up to 400 Tons...) and heavier wall riser means that they have a relatively small allowable excursion envelope before exceeding the tolerance limits.

This was the problem with the Eric Raude. Being a DP Semi didn't cause the incidents that damaged the stack, but they certainly contributed to the severity.

BOR won't come into Navitas's thinking, as the

Hi Nom,

I agree - without Navitas, we'd have nothing, so I don't begrudge them taking advantage one bit.

I also don't think we need a partner before FID, but it would be wise to bring one in afterwards.

After FID, I think it also depends on the attitude of the FIG.

All the FI licenses are up at the end of 2026, so what will they want to do with the NFB?

Will they be happy put all their eggs on one basket and wait for Navitas / RKH to go about developing (relatively slowly) the NFB province over the next couple of decades?

Or will they want to bring someone else in (someone who won't be cash constrained) to speed up Exploration / Appraisal / Development in the NFB area, so force us to give up some areas of the licences?

Or will they give Navitas / RKH another 2 - 3 years on all the NFB licenses on the condition that they do a substantial Exploration drilling program - possibly also including more 3D Seismic as you have mentioned before - which may force our hand in terms of getting someone else in?

As you've already pointed out, the sandson terrace and the NNFB are currently open and very interesting prospect wise. RKH don't have the cash, so would Navitas form a partnership with another outfit to bid on those licenses?

So many options!

Exciting times ahead indeed!

Hi Nom,

Great post and puts into perspective just how big not only SL is, but the magnitude of the potential for the surrounding area.

As we discussed in an earlier thread, there is a c. 20 Well Exploration / Appraisal program waiting to be drilled when Navitas and RKH have the finance available.

With Shenandoah already in production, Navitas will be in a position to fund this much sooner than RKH, who will have to wait until at least a year after 1st oil.

We know that Navitas have been looking to farm down, but I don't know if there has been any indication from RKH Management that they will be giving up a % as part of any deal?

It would make sense for both Navitas and RKH though, as they'll want to proceed with an Exploration / Appraisal program sooner rather than later.

Both they and the FIG have a big decision ahead next year, in that all the licenses are up for renewal.

FIG won't want to have all their eggs in one basket, so Navitas / RKH may well be forced into giving up some prospective NFB acreage as they can't drill it in any reasonable time frame.

As Nom said, they'll also likely want to bid on the prospective acreage to the North and East of SL.

I suspect RKH have already resigned themselves to loosing the SFB licenses, as they are carried at zero value on their books.

As I've already said previously, I think that they'll go for Phase 2 FID sooner rather than later - they won't wait for 1st Oil, otherwise there will be a gap in drilling of at least a year while they order the long lead time items.

If it does got all tits up for some reason, then the 'regret cost' of selling on the Phase 2 LLI's (or not taking delivery) will probably be less than the cost of demobilising the Rig, equipment and personnel at the end of the drilling campaign and then remobilising again at a later date for Phase 2.

Hi Mirasol,

Exactly - Navitas have been building up their team already.

They'll already know exactly who they need, as those people have more than enough experience in planning Operations like this to be able to work it out relatively easily.

But then for some members of that team (who are already Navitas Staff) to have their JD's completely changed and the 'fun' part taken away will not have gone down well - especially since they will know that what is being proposed as an Operating model is absolutely the wrong way to go.

Enterprise is actually a good example.

Correct, they were gifted the BG Oil portfolio.

But none of that was operated by BG, so no ops people went to Enterprise - they built their team from scratch (lots of Shell, IIRC).

I did read up on what RKH did several years ago. Their performance was O.K., although they had an inordinate number of safety incidents.

But the lessons learned weren't that well documented and the Navitas personnel will have had to go over everything with a fine toothcomb to tease out best practices.

Also - because it's not in their best interests - you don't know what mistakes were made that the WMC glossed over in their reports to RKH management.

No, they won't absorb people from the WMC - there will be anti-poaching clauses in the contracts (goes both ways).

Sorry, but whichever angle you look at it from, this is not the way to go.

Hi Alma,

The difference is that an Exploration program has a definite end point and if you are a small outfit with no other Operations (i.e. RKH), then there is little point in taking on your own team.

That's not the case here. Navitas have a drilling & completions program that could (should!) last for many years, so they already have been building their internal capacity.

Not IR and his immediate subordinates - they'll have plenty to do anyway, irrespective of if this route is taken or not - I mean the Navitas Drilling & Completions engineers that have been working on the project for up to 2 years already.

Navitas took them on with the express intention of building their internal capability - which given the years length of SL was the correct thing to do.

Their job descriptions will no doubt have included not just the planning, but the Operations phase - which for most of us is the fun part - and the people will no doubt have been selected with this in mind.

They'll have put a lot of work into the way the tenders have been put together and have had a particular operating philosophy basis on which the tenders (and resultant contracts) will work.

This then directly feeds into the amount and type of equipment taken down to the FI, the capabilities of the base w.r.t. repair and refurbishment, the amount of back up tools & contingency materials needed etc.

I can guarantee that suddenly being told that it's all being taken away from them and given to a Well Management Company will NOT have gone down well with those people.

By no means all Operators use Well Management Contractors - very much in the minority actually. There are very good reasons for using one if the circumstances are correct.

But make no mistake, the Well Management Companies No. 1 priority is making money for themselves, so they will do everything they can to pad the manpower & manhours "oh, we need to study this, but it's not in the original SOW, so it's going to cost more".

Operators quickly find that their manhours estimates are being exceeded, because it's in the WM outfit's interest to increase the billable hours as much as possible.

They'll have an agreed cost/hr or cost/day in the contract for an engineer - in which case the WM Co will get the cheapest engineer (i.e. won't be a 20 yr hand...) they can, so they can pocket the difference.

Especially being in a different office, you can't be sure that that engineer who is being billed 100% to you isn't actually spending some of his time on a different project and billing both Operators...

And from personal experience, I can tell you that WMC's are very, very good at finding ways to move people onto a different project once they get experience.

Ultimately, why should Navitas pay the WM Co the going rate plus a 15% handling fee, when they can employ the engineer themselves and retain the expertise in house?

No, this is a bad, bad idea.

Hi Alma,

Thanks for the clarification - my bad.

Can't see it being Ithaca - if Delek wanted to put money into RKH, I would have thought it better to do by themselves instead of through Ithaca?

Why use a subsidiary which (hopefully, if Mad Ed sees sense...) has substantial financial commitments coming up in the UKCS and get c. 75% of their investment, when they can get 100% by directly investing themselves?

The $23.5 Million would also take them well past the 3% TR-1 triggering territory at the current market cap.

If that is what is going to happen, then it's a really bad idea.

As a new Operator and effectively operating to UK Standards, Navitas absolutely will need someone to help them get their policies and procedures (i.e. Management System) in place - but that's where it should end.

Yes, there can be advantages to a small Operator with a limited drilling program outsourcing to an engineering shop - that is not what Navitas have.

The NFB will be an ongoing Campaign for many years and in an extremely remote location - which few people actually have experience of.

If it's Elemental, they used to be called Synergy and have the same reputation that a lot of these outfits have - ramping up the body count on the project to make more money, while providing people who don't really have the right background.

They typically will put someone in as an 'experienced' engineer when in reality they've only got a few years sitting behind a desk in ABZ, with little or no Overseas time, which will be crucial here - especially remote location experience.

Then when that body-shop person has gained that experience (making mistakes at the expense of the Operator), the body shop will usually try and move them onto another of their projects.

Their favourite way is to guilt trip the Operator ("this is a good career move for them, you wouldn't want to stand in the way of that, would you?"), replace them with another more Jr. engineer and the cycle begins again.

They'll also need to provide some Operations personnel for the FI.

For people on the Rig, it'll be fine - but they'll need a couple of Operations people in the base and putting someone down there who has never worked outside ABZ before is going to create a lot of issues, because they won't know what to be aware of or look for.

Also, in any gap in the drilling program they'll move all the people on, who will take the learnings and experience with them. Then when the program restarts (e.g. if there's a gap between SL phase 1 & phase 2), it'll be a new batch of people and the process starts again.

For an extended campaign like this, it's far, far better to do the operations planning and execution with your own people - thus keeping a better control on headcount while, more importantly, retaining all the lessons learned and experience in house.

It's also crucial that there's good communication between the Subsurface and Engineering groups, as there are always going to be surprises - or even just answering simple things like "we want to put this Well here and this is why - can you do that?" type questions. The Subsurface group are in London.

That seemed to be how Navitas were staffing up (Pauldrayton, I think you mentioned some names?) and if this is what's going to happen, I can't imagine that they'll be too happy with the fruits of their past 2 yrs of work suddenly being taken away and the fun stuff being given to someone else.

BTW, Mirasol, afraid I'd have to disagree about Norwells

Really can't see either Navitas or RKH failing to raise the funds required at this late stage in the game?

In which case, wouldn't a more important date be the 31st October?

Someone (Mogger?) mentioned that that is when purdah for the FIG starts, due to the upcoming election.

So if we haven't got FID by then, it would seem likely that we wouldn't get it until late Q1 2026, when the new FIG have got their feet under the table and are able to wrap their heads around everything they have to deal with.

My feeling is that the FIG delaying the FI Election by a month or so means that they are confident they can get all the permits / approvals for the SL Development done before Purdah.

So if we don't have FID announced by the 1st week in November, I'd expect an RNS saying it's delayed due to the FI elections and FID now won't be until late Q1 2026.

If that happens, I expect the share price to take a temporary hit, which I'll look at as being a potential buying opportunity (how much depends upon the relatives Xmas wish lists...).