Ann: UK Southern Gas Basin - Operational Update, page-190

Hey @Byron, you have built a good working relationship with the directors of HHR and I would really appreciate it if you would consider leveraging that relationship a little more.

HHR has a conditional 40% share of the project with the major condition being their ability to finance around $100m in capex. They couldn't gain finance in December when their MC was 4 times higher and prior to Labour announcing their O&G policies. With these changes in MC and policies it will be even more difficult to achieve finance moving forward.

At 20% HHR still derives a meaningful income into the future and has no capex to fund. More importantly at 80% to RR the project metrics improve for RR. This improvement in RR's financial return may actually be enough to tip RR into FID territory. @Knightrider63 said a while ago none of us really know the internal policies of RR and they may look at this project very differently to how HHR would. IMO HHR is Phase 1 centric whereas RR would be considering all 3 phases.

Would you put a proposal to the directors @Byron? Essentially a request that HHR meet with RR to negotiate an early trigger of the 20% option in exchange for a commitment to move the project to FID.

From HHR's perspective 20% of a real project is a superior option to 40% of a slow death. (or a project deferred for years) It's the only way I can see any short term improvement in SP. The alternative is to sit and wait in the hope that Labour backs down on their policies.

I value the opinions of others on this thread and welcome any other ideas.