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In brief,
The case is against the KRG & Iraqi government.
The new Oil & Gas Law will bring all assets under Baghdad.
Baghdad is now desperate for gas; the new bid round 6 is only for gas assets. To exacerbate this condition, Iran just cut off gas supplies to Iraq.
After Dana Gas won their case, they were awarded a large gas license to develop by Bagdad with an Iraqi contract.
Considering Bagdad is in significant need of gas, and the Genel gas fields are the biggest in the region (And up there worldwide), they will need all outstanding legal claims cleared to be developed.
These fields are worth £10's Billions. 15TSCF onshore is off the scale.
I've been in this share for longer than I care to admit, and bottom drawered it when the pipeline shut thinking that I'll stay invested and hold out for Somaliland and the arbitration case. The worry for me re arbitration is how on earth KRG will be able to cough up if they lose. When Dana won their case in 2017, KRGs finances were more robust than now and they had the luxury of direct oil revenues, which they no longer have. I wonder if there's any way the responsibility for paying any potential future claim could end up in the lap of the Iraqi government?
It's not sure they're the amounts looked at, but going through the history, Genel had worked hard and took serious risks buying, proving-up and developing the licence ($1.4B cash costs) to have then the KRG basically turn around and take it off them after a more significant than expected discovery. Really bad form on the KRG's part.
They did the same to Dana around the same time over another gas field.
Decimated Genel.
They presented to institutions at Pareto E&P.
https://x.com/GenelEnergyplc/status/1751910212930248811?s=20
The case is still well under most people's radar, people will slowly catch on after the presentation and some research. For perspective, the gas fields are nearly the size of Leviathan in Israel - The one that allowed Israel to basically exist. But onshore. 🤯
Genel costs at break-even = Wait for ITP restart and legitimacy = Greater than 2X return and then a running 20% dividend yield.
Or
Court case = 7X - 19X
Mutually exclusive events.
Great rise in the SP today, long may it conitnue!!!!!
GKP are moving up now.
Hmm I wonder if there is director buying going on for it to open up so much in price while GKP virtually hadn't moved.
LOTM
Looks to me like people are discovering about the case.
Until the last presentation the company has been very quite about amounts and the ITP shut down has overshadowed it.
It's a 19 fold return off the Enterprise Value.
Nice rise today
A few months normally jc_123
https://www.energyvoice.com/oilandgas/middle-east/exploration-production-middle-east/546439/local-sales-cost-cutting-and-patience-kurdistan-producers-hang-on/
“One catalyst identified by Genel is an arbitration case it is pursuing in London against the KRG, on the Miran and Bina Bawi licences. “Our claim is that the cancellation … was repudiatory and because of that we’ve suffered significant losses. We’ve spent $1.4 billion of cash acquiring and investing in these licences.”
I realise the answer to this question may be "how long is a piece of string?", but does anyone have an educated guess as to how long the arbitration process could take? ie until a judgement is issued. Are we talking weeks or months?
News from our operator DNO,
DNO: HASN'T BEEN ASKED TO CUT OIL OUTPUT IN IRAQ KURDISH REGION
DNO: KURDISH GOVT IS ENCOURAGING COMPANY TO BOOST OIL OUTPUT
Good to see them confirm the $1.4B costs regarding the arbitration case. I think it's been overlooked by the market due to the pipeline shutdown. Dana Gas were successful.
Soon be into February and we hopefully will start a news flow rich period, should get Genel moving
I wasnt expecting much & wasnt disappointed. Admire fact that they have moved quickly to reshape the business, cut costs, & stregthen where they can. Did really well to switch to local sales & with the cost savings, they'll be covering costs come March. I really felt for Luke - one can sense his frustration that all of the catalysts listed rely on others & are very much out of their hands.
I have to say I'm on the disappointed side, I thought the cash position would be better than it is.
The cash-flow margin is clearly smaller than you think it is. Yes I know they had the bond interest to pay as well during that quarter.
Pipeline opening or the size of the award are the 2 possible catalyst's for the share price to increase substantially.
GLA
LOTM
Thinking about, it’s an arbitration so there will be an award, that could be 0 or full amount. So the text within the RNS is correct. Looking forward to the meet the company at 10.
Well we knew what was coming, no new news. I’m happy to stay invested here and GKP. The arbitration wording seems to think it’s a win before going to count “The hearing is confidential and as such we will not be able to update on progress until the Award is received, with the timing of the Award uncertain, but expected in 2024”. The only thing is of course, it they do win who’s going to pay! Oh well as I say happy to sit back and wait.
Looking forward to hear how we are performing. at the Investors Meet tomorrow, hopefully anothe little tick up in the SP
Turkey has its own problems with oil supply Tartine.
The ship Iran seized was bound for there & they have supply issues from Russia to content with now as well.
So they might actually be quite keen to get crude flowing again.
My mistake earlier got my dates mixed up thought today was Tuesday & its not ! Both the APIKUR meeting & the Genel update are both on Wednesday !
GLA
LOTM
It only means that there is no agreement. Turkey is probably also preventing the reopening as it owes quite a lot to Irak for the breaching the contracts (1 billion or so, I seem to remember). I doubt very much Turkey is willing to pay Irak and so the pipeline remains closed. IOC are just passengers ... they have next to no leverage ....
Hopefully I am wrong and the update this week will be good ... somaliland maybe?
Not sure if anyone has spotted this yet ?
https://www.rudaw.net/english/kurdistan/210120245
KRG meeting APIKUR &other IOC's tomorrow & then the Genel update is on Thursday !
GLA
LOTM
Theyll probably still be arguing next year
It looks like the Iranians bombing in Kurdistan has given the Iraq and Kurdistan governments a jolt they needed. It looks like deals are being made and oil can soon flow. Not long to go. This could turn out to be a transformational month for both genel and gkp. Atb to all shareholders