RSC awarded to OXX, page-7

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ervina

284 Posts.

15/06/14

19:09

Post #: 13526618
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Originally posted by uazy4 ↑

http://www.allens.com.au/pubs/ener/foener13jun13.htm?classic=true

"There is no standard, publicly available RSC and therefore there is a lack of transparency around the terms that would apply to any particular field or the RSC model in general. However, according to publicly available information, the key features of RSCs are as follows:

the contractor (that is, the relevant oil and gas company) develops, operates and maintains the field, while Petronas retains ownership and control of the reserves;

up-front capital investment and initial costs are contributed by the contractor, which are reimbursed at an agreed point in time, such as after the pre-development phase on or the production of first oil;

after that, the contractor receives a per barrel remuneration fee, subject to taxes, up to an agreed ceiling – contractor compensation is contingent on reaching production by a target date, and achieving certain rates of production throughout the contract term; and

each international services company must join with a Bursa Malaysia-listed local partner, giving the local partner at least 30 per cent equity ownership, in order to qualify for an RSC.

It is anticipated that the RSC will offer a higher-than-industry average internal rate of return on investment, at between 7 per cent and 20 per cent, subject to terms and conditions."

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Thanks uazy4.Seems fairly risky to me if, after obtaining funding,we don't meet the stipulated timelines.
OXX Price at posting: 13.0¢ Sentiment: Hold Disclosure: Held
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RSC awarded to OXX, page-7

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