Viaro Energy Strategy, page-103

Hahaha, I was wondering about that last night myself. With HHR at $15m MC it must be tempting to just try to take them out or buy the rest of the project off HHR. Viaro/RR can't move on HHR without director support and, for that reason, I don't think anything will happen. IMO any offer they made would be well below the number to get the directors or SH's smiling.

One option is for RR to sit and wait for HHR to fail however HHR has $23m cash in the bank so they can make it a long wait.

While RR may not be able to entirely get rid of HHR I think RR would be unhappy with the current two tier JV arrangement and they may apply some pressure to resolve that. One possible outcome would be to dissolve the JV in return for awarding HHR a 20% royalty across the project.

The projects viability improves with increased gas prices and RR aquisition of the Shell Infrastructure. (I also think that RR must have some indication of how the politics will resolve give the $500m they paid for Clipper/Leman/Bacton)

Maybe it will come down to Gas Prices. At 100p/btu all of a sudden my RR cashflow has gone from an IRR around 15% to 20%+ which is pushing towards a viable project. RR will want to resolve HHR's involvement before they move forward.