The six months period to 30 June 2014 is a key milestone in the Group's operations as it is the first time a gross profit has been recognised from the Shaikan field. Until such time as payments become regular and predictable, gross profit will be variable. The Company is continuing to work with the KRG to achieve a regular and predictable payment cycle. Export infrastructure improvements are continuing to come online as planned in the region and the KRG is continuing to advance its export plans.
Production from Shaikan (20% WI, non-operated) fell slightly QoQ due to temporary oil transport constraints in September, but is currently uninterrupted and continues at an average daily rate of c. 38,000 bopd. All production is currently trucked to the Turkish border for injection into the export pipeline at that point.
Gkp 5.4 mill a month since Sept 2016 to Feb 2017 Gkp 12 mill a month, Mol 3 mill a month
Deeko - Indeed, cash balance has been swinging between $90m to $110m. As I said in one of my recent post, despite the restructuring, the company is still likely to be loss making - so the annual report will be a fun read!
Another point to note is that so far the company has been offsetting some of the annual payments it needs to make to KRG (e.g. Infrastructure tax or whatever it is called) against past arrear that KRG owes GKP. There is not much past arrears left to offset against - so soon the company will have to dip into its cash reserve to make these annual payments.
So IMO we still do not have a sustainable businesss model (yeah yeah those gazillion barrels of oil ... don't mention). That's what I expect to read out of the numbers to be published in the annual report. Would love to be proven wrong for the sake of some of the decent LTH on this board.
Well, let's not get carried away Dibendra - some of us have very full boots already. Plenty of variables and of course the real value hidden under Shaikan (and the puppetmasters reason for keeping it under wraps) remains our trump card.
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