Rockhopper Exploration Share Discussion Threads

[nigoil] 22/8/2020 22:34

Ooooooh cyan ( the weazel), I love it when you are angry, especially when you've been caught out, yet again, LOL! You remind me of a b$ble b@sher who stands on her pedestal preaching doom & gloom, LOL! All you ever do is copy and paste and then add a tw$St or two of your own, LOL!.. Simples!.. :-)... RKH = OM Win = €150 million

[cyan] 22/8/2020 22:20

Oh look whose arrived; Billy liar ; Fraud oil.

You keep on telling lies ; You are a pathetic attention seeking liar of the first order. Everyone can read my posts and see what I really wrote.

You contribute nothing useful to the debate.

Isn't it time for your bed?

[nigoil] 22/8/2020 22:10

You are such a weasal cyan, you keep changing your tune, LOL! Only a few weeks ago you were sl@gging of Navitas saying that they wouldn't be able to get the finance, LOL! You are a very dishonest and disingenuous poster !... Simples... :-)... Rkh = OM Win = €150 million

[cyan] 22/8/2020 21:54

Good evening gaffer73

I agree; Naviatas are still interested , but, remember this, they could still walk away even after signing the SPA.

Its Navitas that gives me hope that SEALION can still happen albeit its been at a significant cost to PMO and RKH.

Its clear ;PMO are not in a fit state to proceed with the old 60/40 terms.

Navitas hopefully bringing the necessary finance and reducing the financial strain on PMO does improve our chances.

[gaffer73] 22/8/2020 21:46

From last week "Discussions with the Falklands Islands Government regarding Navitas's entry onto the Sea Lion licences are progressing. Completion of the transaction, which is subject to FIG approval, is targeted for the fourth quarter."Sounds like they are still committed to me

[cyan] 22/8/2020 21:05

SEALION's development is not certain;

"But a final decision on whether to proceed won’t come until next year at the earliest, according to Premier Chief Executive Officer Tony Durrant. Previous deadlines for final investment decisions have come and gone. The company declined to comment on whether Sea Lion was at risk of turning into a “stranded asset.” "



"whether to proceed" nothing certain there

No reassurance either regarding the possibility of SEALION turning into a 'stranded asset'

I am sticking to my one in three chance opinion.

Hope it happens, but PMO have disappointed for so long.

PS
As for later phases; the article had this line;

"Premier Oil Plc, Rockhopper’s partner, suspended work on Sea Lion earlier this year, and on July 15 wrote off US$ 200 million of investment because later phases looked unlikely to happen."

[datos] 22/8/2020 21:01

Good post Cyan thanks for the info

[nigoil] 22/8/2020 20:51

No problem Laticsrule, I can wait!... Simples.... :-)... Rkh = OM Win = €150 million

[nigoil] 22/8/2020 20:40

Probably it didn't GOZZIE2, but cyan and you girls were posting Sealion was at risk and only had a 1 in 3 chance of going ahead , nevermind phase 2, LOL!... Simples... :-).... Rkh = OM Win = €150 million

[cyan] 22/8/2020 20:39

Good evening GOZZIE2

Had a look at MOG RNS's Looks like the Italians were being awkward about OM before RKH bought MOG

13.1.14 MOG RNS extract

A timeline of events can be seen below:
5 May 2005
-- The Company was granted the Exploration Permit related to the sea area identified as B.R269.GC in the Adriatic Sea.
2005-2008
-- During this period the Company fulfilled all its exploration commitments and, in 2008 drilled two wells, discovered the Ombrina oil and gas field, completed one well as producer and installed a temporary platform. The total investment by the Company to date was approximately EUR23 million.
17 December 2008
-- Medoilgas submitted its application for a Production Concession for Ombrina Mare to the Ministry of Economic Development.
23 June 2009
-- Received a favourable opinion from the Commission for Hydrocarbons and Mining Resources.
3 December 2009
-- Medoilgas submitted its application for the EIA to MEPLS.

26 August 2010
-- Following the Deep-water Horizon drilling incident at the Macondo oilfield in the Gulf of Mexico, the Italian Government amended the Italian Environmental Code with Legislative Decree no. 128/2010 prohibiting exploration and production activities in certain sea and coastal areas, including authorisations under review such the Ombrina Mare Project.

8 November 2010
-- On the basis of the prohibition in Legislative Decree no.128/2010, MEPLS announced that it would issue an unfavourable opinion on the Ombrina Mare Project EIA.
22 November 2010
-- Medoilgas made a submission to MEPLS disputing the application of the Legislative Decree no. 128/2010 prohibition to the Ombrina Mare Project.
26 June 2012
-- Following strong lobbying activity by Medoilgas and the oil and gas sector, Law Decree no. 83/2012 entered into force, modifying the offshore restrictions to Exploration and Production introduced by Legislative Decree no. 128/2010, such that the prohibition no longer applies to applications that were under review at the time the prohibition came into force. Therefore, the Ombrina Mare Project now falls outside the scope of the prohibition.
11 July 2012
-- MEPLS re-started the EIA procedure.
August 2012
-- The Decree no. 83/2012 was converted into law (Law 134/2012), lifting the ban for applications that were under review at the time the prohibition came into force.
24 October 2012
-- Medoilgas received formal notification from MEPLS that, consistent with the conditions required by law, the EIA procedure could be completed without performing the AIA at this time.
25 January 2013
-- The EIA Technical Committee approved the draft EIA with a positive ruling for the Ombrina Mare Project.
11 February 2013
-- The Ministry of Cultural Heritage and Activities confirmed its favourable opinion for the Ombrina Mare Project, as previously expressed on 30 June 2010.
March 2013
-- MEPLS decided to re-open the EIA procedure to allow the Abruzzo Region to submit a late opinion on the Project.
3 April 2013
-- The EIA Technical committee once again confirmed its positive ruling for the Ombrina Mare Project.
17 April 2013
-- The EIA Director General of MEPLS transmitted the draft EIA decree for the Ombrina Mare Project with a positive recommendation to the Minister for signing.
-- The draft EIA decree has sat in the Ministerial inbox ever since. Once the decree approving the EIA is issued, and co-signed by the Minister for the Cultural Heritage, it will be the responsibility of the Ministry of Economic Development to issue a Production Concession.
28 April 2013
-- A new Government headed by Mr. Enrico Letta is appointed. Mr. Andrea Orlando is appointed as Minister of MEPLS.
1 July 2013
-- In response to the lengthy and continuing delays to the EIA approval process for the Ombrina Mare Project, Medoilgas wrote to MEPLS giving the Ministry 10 days' notice to complete the issuance of the EIA Decree, in accordance with applicable regulations.
9 July 2013
-- MEPLS sent a letter requesting Medoilgas complete an 'Autorizzazione Integrata Ambientale' (an Integrated Environmental Authorisation) ("AIA") for Ombrina Mare as a precursor to the Ministry considering the approval of the EIA.
8 August 2013
-- Medoilgas filed an appeal before the Administrative Court in Rome against MEPLS aimed at obtaining the annulment and, as an interim measure, the suspension of the letter dated 9 July 2013 from MEPLS requesting the Company to apply for and obtain an AIA as a precondition for MEPLS' approval of the EIA for Ombrina Mare. As part of the Appeal, the Company has also requested a judicial order to instruct MEPLS to issue the EIA Decree.

[gozzie2] 22/8/2020 20:35

That didn't take nostradamus .

[nigoil] 22/8/2020 20:31

But my dear Laticsrule, those other posts came true, especially the one I posted that Sealion will be going ahead with phase 1 & 2, that was only last week! I suggest you do more homework and get your facts right old chum, LOL! .. Simples!... :-)... Rkh = OM Win = €150 Million

[gozzie2] 22/8/2020 20:28

Fuddstone gets me erased then copies my posts lol .They say imitation is the sincerest form of flattery .

[gozzie2] 22/8/2020 20:16

When I've time il try to decipher it .I'm sure Cyan can figure it out .

[gozzie2] 22/8/2020 20:04

Maybe this is why its taking so long it can't be an easy case to decide .

[gozzie2] 22/8/2020 20:01

Tbh im no expert far from it. I was just taking it from kluwer law International and presumed they were experts .Maybe they are wrong if someone can back your ideas up .

[duckdown] 22/8/2020 19:56

But if you read that article it looks like they have it wrong. The ruling in April 2014 simply stated that MOG needed to complete an AIA:



Which was an appeal hearing from July 2013:



In May 2015 (after the acquisition), the EIA was approved by the Minister for the Environment and it included the AIA which was what those previous hearings were about:

"The Environmental Impact Assessment ("EIA") of the Ombrina Mare Field Development Plan ("FDP") has been approved by the Minister for the Environment. The approval decree includes the 'Autorizzazione Integrata Ambientale' (Integrated Environmental Authorisation) ("AIA")".

So, again, why would RKH take a 50% cut? The decision not to award a production concession was made AFTER the acquisition of MOG, and AFTER the EIA and AIA approval. That decision is clearly in contradiction of the Energy Charter Treaty.

So please explain if I've got it wrong but I don't see a lack of due diligence on Rockhopper's part that should affect an award.

[gozzie2] 22/8/2020 19:43

I'm expecting at least a 50% reduction based on that article .Others can guess what they like .

[gozzie2] 22/8/2020 19:33

IntroductionFollowing the denial by Italian authorities to grant Rockhopper Exploration PLC (a UK upstream company; hereafter, RKH) the production concession for an oil and gas field, in May 2017, the company lodged (jointly with its Italian subsidiary, hereafter collectively referred to as the Claimant) a request for arbitration against Italy with the ICSID by relying on the Energy Charter Treaty (ECT).This post gives a brief overview of the pending case and comment on the balance between investor's legitimate expectations and due diligence in M&A transactions with the aim to warn the interested M&A practitioner – who spots a target company with a potential investment arbitration claim – about the timing of the purchase completion and its consequences on claimable damages.FactsIn August 2014, the Claimant completed the acquisition of Mediterranean Oil & Gas PLC (a UK upstream company, MOG hereafter) for GBP 29.3 million in a cash and shares deal. MOG had onshore and offshore interests in Italy, Malta, and France. Among its interests in Italy, was the Ombrina Mare, a field located in the central Adriatic Sea whose exploration permit was applied for and obtained in 2005. In 2008, a hydrocarbon deposit was found and the relevant production concession submitted. However, pending the administrative procedure for the granting of the relevant production concession, the Italian Government brought about several reforms in the extraction sector which made unfeasible the exploitation of the Ombrina Mare field, given its proximity to the coastline (4 miles offshore) and to a natural reserve.Although during the administrative procedure, MOG was given some reassurances that eventually it would have been awarded the necessary authorizations to start with the drilling, eventually, the concession application was denied by the competent Ministry.Consequently, MOG applied for an administrative review before the Administrative Court, which upheld the Ministry's refusal to grant the concession, both in first instance and on appeal (on 16 April 2014 and 17 December 2015, respectively).After the Claimant acquired MOG, it resumed the authorization process despite the many setbacks, hoping for a different outcome. However, when in February 2016 the Ministry of Economic Development denied for the umpteenth time to grant the Production Concession covering the Ombrina Mare field, the Claimant took the decision to file an arbitration request by invoking the breach of the ECT, after securing a third-party funding.(Most likely) Arbitral Claim: FET violationSince RKH claimed that Italy breached the ECT, the Claimant is going to maintain that Italy breached Part III of the ECT and, in all likelihood, specifically Article 10(1), which establishes the FET standard under the ECT. As a result of the acquisition, RKH indeed subrogated to MOG in all its legal relations, and accordingly RKH substituted MOG in its rights against the Italian Republic, including its rights under the ECT.It is sensible to contend that Italy failed to accord the Claimant fair and equitable treatment by failing to protect its legitimate expectations with respect to its asset (the Ombrina Mare field). Among the measures – that violated Article 10(1) of the ECT and are directly attributable to Italy under Article 4 of the ILC Articles on State Responsibility – are the following:The failure to observe the time-frame to conclude the administrative procedure for the issuance of the Environmental Impact Assessment Decree concerning the Ombrina Mare project (which also may constitute per se an infringement of legitimate expectations and give rise to indemnification under Italian Administrative Law, Articles 1(1), 2-bis(1) of Law No. 241/1990 (Administrative Procedure Act) and Article 97(1) of the Italian Constitution (impartiality and good-government conduct);The introduction and retroactive application of the Legislative Decree 128/2010 to the Ombrina Mare oilfield, thereby paralysing MOG's project, an act which is in contrast with the exploration permit B.R269.GC previously granted in 2005;A Ministerial Note demanding MOG in July 2013 to submit an additional environmental compliance (the so-called AIA, e. integrated environmental authorisation), which is inconsistent with MEPLS's previous specific representation to MOG  in October 2012, ensuring that the AIA was not necessary, and which is also incompatible with Article 23(4) of the Environmental Code1), and Articles 3, 21-octies(1), 21-nonies(1) of the (Administrative Procedure Act)2).(Most likely) Defence: Lack of Due Diligence and Duty to Mitigate the DamagesAn acquisition, just like a merger, is a lengthy process that may stretch over several months or even years, firstly, to allow the parties involved to get to know each other, secondly, to devise the yearned synergy and, thirdly, to come to a deal. During the negotiations, the seller and the buyer have the opportunity to exchange a series of non-binding and binding documents – ranging from the letter of intent (LOI) to the stock or asset purchase agreement (SPA or APA) – which outline parties' rights and obligations during and after the transaction. Once the non-disclosure agreement (NDA) and the LOI are signed, as a consequence of the caveat emptor principle, the buyer has the duty to conduct a thorough due diligence to know exactly what he/she is getting into, by reviewing and investigating various aspects of the target company. Especially in an oil and gas acquisition, legal and environmental due diligence – covering pending, threatened, or settled litigations and regulatory approvals, such as government-issued permits or concessions – is of the essence.On this point, Italy could object to the Claimant that it did not carry out an exhaustive due diligence prior to making the investment, as its failed to assess correctly the feasibility of its project on the basis of the circumstances available when it took the decision to invest. Indeed, tribunals have recognized that Claimant's own conduct in the course of obtaining the investment undermines the chances of a successful FET claim every time a failure to exercise due diligence is shown in the undertaking of a viability study of the project before investing therein. Even if RKH was subrogated to MOG in all its rights by means of its acquisition, the content of these rights is not the same where the core element of the causa petendi is the legitimate expectations the rightsholder might have at the time he/she made the investment (being these moments different in time). Since by the time the Claimant made its investment (by closing the acquisition of MOG in August 2014), the government had already enacted, in June 2010, a decree banning oil concessions near the coasts and an Administrative Court had already intervened in April 2014 by upholding the Government's refusal to grant MOG the relevant concession (because further environmental assessments were necessary due to the complexity of the project), RKH's expectations with respect to that oilfield definitely could not have been as high as those of MOG when it first discovered it in 2008.In this respect, it is reasonable to draw a distinction between the transfer of rights from transfer of legitimate expectations from the selling company to the purchasing company: whereas the former is automatic, the latter is subjected to the circumstances in place and information available by the time the acquisition is executed.Further, parties in a M&A can avail themselves of different ways to allocate the risks of the transaction, such as conditions precedent, representations and warranties and the pertaining indemnifications and damages, and post-closing price adjustments. Tribunals have also recognized claimant's duty to mitigate the damages suffered. Italy indeed could contend that it was Claimant's duty to reduce such damages by relying on the prudent means available in M&A deals. For instance, RKH should have set the grant of the production concession either as a condition precedent to the closing of the acquisition, or ask MOG to make it an item of a specific representation subject to an indemnity in the event of non-attainment thereof, or ask for a price reduction given that RKH was not awarded therewith. Of course, since the details of the acquisition are confidential, in case RKH did address this matter in such a cautious way in the SPA, there might be risk of double recovery.(Most likely) Outcome: 50% offIn cases where the respondent proved investor's lack of due diligence or failure to minimize losses, tribunals often made the Solomonic decision of reducing by 50% the amount of damages awarded (e.g. MTD v Chile, Award § 244–246; EDF v. Argentina, Award § 1302-1312), by holding the claimant accountable for half of its own losses and the host State liable for the other half.The TakeawayThe safest way a claim is transferred intact from an investor to another claimant is throughout a political-risk insurance covering the investment by virtue of the subrogation provision (often found in many BIT-MIT). However, most insurance contracts do not cover FET breaches (hence, they share to some extent the same limit of an acquisition similar to the one discussed above).Thus, should a purchasing company smell the fumus boni juris of a target company's claim in an investment arbitration, the best option for the buyer might be to prompt the seller to initiate the arbitration on its own behalf by including in the SPA a condition precedent to that effect and backing up financially the selling company by means of a suitable third-party funding arrangement (since probably the seller will not have the necessary funds or may not be interested to keep on pouring money in a company for sale).

[nigoil] 22/8/2020 19:26

But my dear Laticsrule, if you took the time to read through my posting history, you would see that I am always correct as a result of my research! I can't predict the share price obviously, but I can certainly predict the events! ie Navitas F/ O, renewal of licenses, Sealion still going ahead, phase 1 & 2, Apache not bidding for Pmo, Sam and the Bod being voted back in etc etc. Where have I been wrong with those events? And for saying you have written of your investment you are spending a lot of time on this forum, very sad individual, LOL!... Simples!.... :-)....Rkh = OM Win = €150 million

[duckdown] 22/8/2020 19:26

With regards to Ombrina Mare, I've noticed some comments regarding Rockhopper's due diligence when they acquired MOG and how that might affect an award if their arbitration is successful.

Correct me if I'm wrong, but when the law was changed in 2010 regarding offshore activities up to 12 miles from the Italian coastline, any applications that were already under review were exempt from that change in the law. This included Ombrina Mare because the FDP application was submitted in 2008 and had been partially approved already.

In fact the Ombrina Mare EIA was approved by the Italian environment ministry AFTER the MOG acquisition, in 2015. This is the RKH RNS from May 2015:

"The Environmental Impact Assessment ("EIA") of the Ombrina Mare Field Development Plan ("FDP") has been approved by the Minister for the Environment. The approval decree includes the 'Autorizzazione Integrata Ambientale' (Integrated Environmental Authorisation) ("AIA"). The decree now needs to be countersigned both by the Ministry of Cultural Heritage and then the Ministry of Economic Development in order for the Minister to be in a position to award the Field Production Concession."

If the Minister for the Environment was approving an EIA after the acquisition then I don't think much (if any) blame can be laid at Rockhopper's door.

So I don't understand why anybody would be expecting a 50% reduction on an award due to lack of due diligence. To me it looks like a pretty straightforward case for the ICSID in terms of liability. Quantum may be more awkward because further appraisal was planned which was expected to increase the 2C resources.
The FDP was looking at 10,000bopd with potential upside as well. Perhaps somebody can explain if I've missed something?