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Created By CURRYPASTY | Read the whole conversation
So it's all eyes on Repsol-Sinopec, with perhaps some new faces on the scene shortly.
Well now that we know it's Repsol Sinopec, I can fully understand why i3 have courted them for so long. Securing a JV with them would be huge. I'm prepared to wait here, one way or another there are massive gains to be had.
Hmm. I'm only about 10% in here. I've seen many sure things with huge value nailed on come off the rails in the last fifteen years that nowadays I won't risk more that ten percent anywhere.
Otoh you lot may be younger than me and less risk averse..
My 5 cents worth:
With the benefit of hindsight, I don’t think there are any great conspiracy theories now on late in the day interim release on Friday other than the BoD do know AIM & took the sensible approach of allowing the price correction to continue, whilst giving the market the weekend to digest & ‘understand’ all the information. Personally I’m glad I’ve had the wk nd to both study the release & discuss the aspects privately with some colleagues. Come Monday everyone will now have had a chance to reach their own understanding of the situation & their position/strategy. Very sensible.
As stated before, the previous drop was overdone mainly due to the distressed exit of JCAM coupled with uncertainty that the wider market was left with based on the RNS at the time. JCAM are now completely out (imo) & whilst the funding risk element remains, we have a fair degree of ‘certainty’ provided by a fairly comprehensive RNS.
In summary for me:
JV technical and commercial DD was completed successfully! (Big vote of confidence).
The issues stalling JV progress crucially have nothing to do with our asset, the proposed deal or i3 and are out of our control.
(“Structural†issues at the JV that may/may not be resolved in the coming months. Repsol? Imagine if they came through. Huge kudos!)
The door is still open to the JV (good corporate strategy) & we remain flexible on this.
FDP has been refined & well locations selected. Good progress. We are now even more (‘off the shelf’) ready as a package for new prospective partners.
Host engineering studies to accommodate the introduction & processing of Liberator fluids have been completed & off take agreements can now be finalised.
Site survey is underway.
FDP to be submitted in the next few months! (As re-iterated several times in the update)
FDP approval expected Q1 2019.
The current project timeline remains on schedule.
Previous JV round was limited in scope but with ‘several’ interested parties.
Now it’s wide open to full tender with a specialist garnering prospective partners. POO up ¢30 since previous round. We’re now likely to see some competition for this project (imo). Quite possibly better terms (although nothing to compare).
Debt facility now to be increased (negotiated up from the $25m already available!) given stronger Brent pricing and i3's addition of Lib West to its Reserves & Resource base. A big positive!
Plenty of news due up until year end. (Some may think they they can exit & come back later on a news flow basis, which I can’t see working here).
Anticipated Q4 updates :
Completion of site survey.
Completion of environmental statement.
Debt facility expansion! (Big positive).
Off take agreements. (Big positive).
FDP complete and submitted! (Big positive).
JV/funding updates! New partner/s or existing partner able to proceed. Crucially this news can come anytime over next few months with no indication as to when. (Big positives).
BoD are fully aligned with 40% held by management. Very important!
Onto the figures.
Positive outlook here given our current stage of development.
Any further placing/dilution as a result of funding delay is highly unlikely (imo) see evidence below:
31st June cash £1.04m
27th July placing £1.62m
Total cash approx £2.7m
Admin Costs approx £115k pm
Admin cost period ending Sept 30th £350k
Liabilities av. £40k pm
Liabilities period ending 30th Sept £120k + single accrued liability of £515k
Monthly cash burn approx £155k
Balance after admin & liabilities on 30th Sept approx £1.7m
No significant costs between now and funding unless i3 need to pay for kit. Since this isn't needed until Q3 then any balance would likely be payable on standard delivery terms (ie 30 days prior).
Once this survey is complete, then there really isn't much else in terms of operational costings until contracts are awarded.
More than enough cash to operate until funding completed & JV project well underway.
Very important to remember as an investment case:
1. This is a proven resource!
2. 11.7MMbbl of 2P (Almost a billion dollars worth of oil at current spot prices) 2P = proved AND probable for the benefit of JakNife #clueless!
3. 22MMbbl 2C (70% COS, which the auditor will convert to 2P upon approval of FDP in Q1! Another 2 billion dollars worth of oil at current spot prices. Significantly value enhancing).
4. 47MMbbl of prospective resource. (This ‘could’ be proven a lot higher imo).
Standard North Sea recovery factors are circa 30%.
Remember Blake field WITH THE SAME GEOLOGY DIRECTLY ADJACENT (who’s infrastructure i3 will tie back to) has historical data GREATER THAN 50%…
POO environment ¢80.
MCAP currently only £36m. Seriously?!
Early tomorrow we’ll see some of the traders out & the weaker cash that came in on the anticipation bet, but the previous drop was already way overdone & there’s plenty of sophisticated cash watching. Good luck on the dip & bounce as I think buyers will take the discounted shares around this range. The current funding situation was priced in last week.
I actually feel very positive again now given this latest release. (Completely unlike my feelings on the previous RNS). i3 are in a strong position with regard to current cash AND potential funding possibilities. The market has a degree of certainty again. Current situation has generally been priced in.
This remains a strong, longterm, significant investment case for me.
All IMO & DYOR.
Tweeted By sdm1965 | Retweet
Also highly probable the OGA will be talking to Repsol Sinopec about the JV breakdown as the award of West Lib to i3 was based on proof of funding which could only have come with their backing in the submission. They will not be at all pleased with the announced news.
Coscos, possible but they have already secured funds in the event they need to do the exploration drill in the 30th round licence area. That was all they had to commit to within the terms. That will be awarded on Monday. I3e have confirmed that this has been paid for in full. Broadbean, excellent summary.
Coscos, Showme is entirely correct.
"Prior support from an existing investor to fund $13 MM of the Company’s Liberator West A3 appraisal well; this agreement expected to be replaced by Joint Venture carry upon JV completion" As per company latest company presentation!
Funding has been contractually underwritten by a 3rd party for the appraisal well. This was the backstop required to attain the award.
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