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@alexelaisson, you are misrepresenting the order of events.
You posted about FCF and a PSC wrt to DNO and used it to cast doubt on someone else’s analysis wrt GKP’s going forward.
For some reason you did not name the person who you thought was wrong- why not?
Did they provide you with data, methodology and reasons for drawing their conclusions in a readily accessible form?
If you name them we can check and then it would be up to you to do the same.
There are a number of posters who always post up the necessary detail and encourage others to take apart their reasoning and conclusions - basic scientific method at work.
Some of the conclusions are not positive enough for some but if the thinking is sound…
Admittedly, I've only been part of this board for one month and a half - so I don't know all the ins and outs of the jargong that you use. With that said, I argue that DNO have FCF producing assets in Kurdistan based on public disclosures. Here's a link to the Q1: https://www.dno.no/media/gh5nmsva/q1-2024-interim-results-report.pdf
You ask me to "proof" what's stated in a public disclosure; with all due respect, if you argue anything is wrong in a public disclosure the burden of proof is on you - not the other way around.
@alexelaisson, I was hoping for evidence that the FCF you were referring to was generated solely by their Kurdish projects.
Then I wanted to see how you had taken the raw data which feeds into their current PSC and how it generated the receipts and then the CO and PO and finally the FCF.
If everything matches for a PSC like this one which is functioning normally and it doesn’t fit with what another posters implies will happen to the Shaikan one when it normalises, we could look for the anomaly.
Since that was the basis of part of your post I.e. throwing doubt on their analysis/motivation, I assumed you would have all the necessary numbers ready if you were questioned about it.
While I will admit that I have been waiting for the one event that would have had a massively positive effect on GKPs share price, no need to say what that would be. Waiting and waiting for far too long. I am nevertheless encouraged by the words that DNO are saying with regards to the increasing world wide demand for their oil. This is clearly indicating that a route, probably overland tankers via Turkey, has been established, probably Erdogan’s agreement with Kurdistan and some money finding its way to those that have the power. This brings us to the ability of our management to do something similar in terms of an ‘local’ oil price that is as profitable, and personally I’ll be very disappointed if they don’t achieve something similar, especially as they will portray themselves as being failures by comparison with DNOs management.
As share holders, the owners of GKP, we can collectively dismiss them if they fail by comparison with DNO. Therefore I will expect the next R N S to be positive.
Can we now hope that some of the profits will be distributed by the way of a dividend?
P.S. I’ve been waiting to buy at the sub 90p share price that was so confidently predicted by those pessimistic posters (Isaponzi in particular) Haven’t heard from him recently. Do I wonder why? No, not when the shares are 120 and trending up.
Not really following what you're saying. DNOs North Sea assets are currently draining cash (investment) and their Kurdistan assets are bringing in the free cash flow. As it's a public company you have all the details in their filings.
@alexelaisson, where are those profits and free cash flow coming from, they have a much more diverse portfolio than GKP?
Have you extracted out the contribution from the Kurdish projects and linked it to their current PSCs, that were enhanced as part of the previous debt recovery?
If so, can you post up the figures so we can compare the outputs with the Shaikan PSC?
Clearly with the annual anniversary of the pipeline flow stoppage already passed, DNO are reporting very buoyant sales trades and confirming that demand is exceeding current supply. Also points out that margins are now being reflected on worldwide crude prices and good margins are being made by producers and haulers, Also points out that its crude is reaching all areas of the world now.
Quite simply its large export volumes that are causing this crude shortfall and prices are rising.
Must also be the same for GKP, they cant get enough of our "sludge", also clearly its not being all used in local markets either but going international.
As demand and margins rise, expect we will see some infrastructure works soon. Also very good for shareholders.
The incompetence of the Iraqi oil and gas ministry despite being massively overmanned is simply mind boggling. The previous round 5 gas contracts were sold as being "fast tracked", although it has already taken them 5 years to even get to a contract award stage, however in this meantime they have been dependant on Iran. Or has it been deliberate??
https://www.mees.com/2023/2/24/oil-gas/iraq-eyes-gas-boost-with-signing-of-fifth-licensing-round-contracts/db9621f0-b438-11ed-8230-e9f78a69afa6
Little wonder many companies have quit completely, seems they require financial "enhancements", all the time and still don't proceed. Just like the problems we are currently having.
Got a feeling there are not going to be many takers this time, they think the world owes them a living and they are just too greedy.
DNO conference call earlier this week spent a great deal on the Kurdistan operations, and it was surprisingly positive.
DNO has a depleted cost recovery pool (not accounting new investments, of course) and still churns out profits and free cash flow like nothing you've seen. Remember, the main objections from you know who - is that it shouldn't be possible.
Here's an excerpt from the call about local oil price approaching $40 and most significantly that heavy oil is in demand (and why it is). I advise you to to listen to the whole part. Link: https://i.imgur.com/rJOIMMb.png
Disclaimer: long since 90p.
“In a significant announcement, Prime Minister Al-Sudani extended the application deadline for the fifth and sixth licensing rounds by two weeks,”
Round 6 is probably best ignored as it’s Gas based. Round 5 plus is very important because it will reveal what they meant by “sweetened” contracts wrt Oil I.e. how far have they shifted their mindset towards partnership contracts.
Remember this is their attempt to put right the debacle which was Round 5.
Doesn’t look like they have been inundated with IOCs vying for position under this new contract regime.
What have they got wrong this time? Insufficient data, not enough time or % takes in the sharing part which are much too low?
Hopefully it’s the latter and it focuses their minds on what commerciality means in terms of risk, reward and CoS when it comes to IOCs funding exploration as they did in Kurdistan.
Happy to wait it out.
GLA
I think the following statement says it all …. In a significant announcement, Prime Minister Al-Sudani extended the application deadline for the fifth and sixth licensing rounds by two weeks,
Not surprised at all that they wish to extend the time period. They want as many companies as possible to participate.
Why....Well corruption in Iraq starts the moment you express an interest in helping them.
Participation fees for rounds 5 and 6 are $100,000 each.... Lots of extra payments if successful as well. Nice little earner for nothing, just accepting them at your meetings.
I see SNM reporting local sales net price was $36.49/bbl in Q1.
How much lower will the SH number be?
@belgrano, the article about the 30% rise in pump prices read as if this was down to the state subsidy being removed. As usual there were no figures that allowed us to check if this was the sole reason, or one of many including having to pay more for local oil.
No doubt the comment an IOC made about increased demand for heavier oil was true from their point of view.
Obvious question though, heavier than what API? Were they talking about 28, 26,………,18 being equally in demand?
GKP used to produce production figures on a monthly basis in presentations and payments from the KRG that went with the relevant invoices in an RNS.
They could remove any hopes/fears about what is happening now to the price of Shaikan by doing a monthly RNS combining production and cash up front.
The counter argument is that if nothing is changing then why issue an RNS?
" In this case GKP should provide an update, certainly if there has been a meaningful price increase since their last reported 25 dollars. "
If there were meaningful news to convey, they'd have to provide an update. They haven't.
I think the following statement says it all …. In a significant announcement, Prime Minister Al-Sudani extended the application deadline for the fifth and sixth licensing rounds by two weeks,
Why else would they extend it ? They may be getting the message now albeit slowly … if you don’t get enough interest in your offer you’ve got to look at what’s on offer simples. Sitting round tables now and basically begging companies is a long way from sifting through cvs as they would have hoped. Leave them to drink their frogging oil for another 15 months then see where they are. Bring on electric everything and they’ll be wishing they’d cooperated years ago. Rant over lol
DNO have a very dynamic, ME recognized and flamboyant MD in Bijan M-Rahmani.
My sizeable DNO investment feels secure in his hands.
….. Who was that running GKP again ??
Hi Rog,
We know that prices paid at the pumps in Iraq have increased by a third almost overnight and crude prices paid for DNO are now high 30's.
We were also informed that there is a bit of a shortage of heavy crude availability currently, which is a little surprising.
Hearing that DNO in discussions about exporting also good news as it tends to indicate all the IOC's are also involved.
For my part I don't need a current upgrade on local sales prices, and certainly not anything that might inspire false hope of exports like the DNO one has.
If our company publicly states its doing well, it weakens their hand when explaining why we require higher than normal profit return's . Better to say nothing, and then let us all know when and if crude exports are starting, when its done due to having far too many false dawns on this already.
It will come fellow holders, and even if it doesn't , we can hold for the new contracts in 15 months.
Having taken notice of the price that DNO are securing for their ‘local ‘ oil sales I was expecting that GKPs share price would increase today, the fact that it hasn’t increased so far is disappointing and gives rise to the suspicion that GKP might not be achieving those higher prices. In this case GKP should provide an update, certainly if there has been a meaningful price increase since their last reported 25 dollars.
We shall see, if not via an update via results.
Thanks HGNAMED
Yes, DNO seems very confident in the future, wondering what they know we don’t? Also paying a divi!
GENL has also been increasing day by day( they have a 25% stake in Tawke).
I am surprised GKP hasn't gone up on such encouraging news and the price obtained for their oil.
Hi Morbox,
Good find, wonder if my old company XOM is there as its headquarters are in Houston. However they have pulled out of Iraq mainly due to the expected backhanders that all the Iraqi officials expect for doing their base job. Makes it impossible to comply with strict company ethics standards when they wont do anything unless given additional incentives which is a generous payoff. We are not talking a dollar or two for carrying bags , but blatant demands for serious sums such as permission to drill such and such wells with supporting infrastructure. Refuse and it sits in their in tray fore ever. Time is money for all western companies and they know it and play on it.
Glad to see they are looking at gas integration projects. The hardware for these is very expensive and it wont be cheap but they most certainly do need it, thats if you want to clean /treat and process the gas and not just re-inject it.
Exporting it collectively to Turkey and then into Europe would be best, and I'm sure Turkey would love to get involved but they wont do it for peanuts, and a good starting position would be getting Kurdish crude flowing again.
Its important to note that although SOMO has stated the the IOC's get more than the current awarded contracts and they require a law tweak to pay the rate, they have not said that the amount the IOC's receive is unfair. No one is looking for flaws in our current contracts and we should not go down this route at all. lets hope we here something substantial soon.
Fantastic drive to market Iraq and its resources. Can only be good news for the peoples of Iraq.
However:
Must get payments sorted out, a stable export structure, Kurdistan annexed (or cut out)….. and work at keeping your promises - or nobody will touch investing in you r country with a barge pole.
belgrano, with your comment this morning on the subject of international investment, interesting to see the below. hope they say why would we work with you when you treat companies like ****.
“ iraq’s prime minister courts american energy titans in houston roundtable, exploring opportunities in energy sector”
https://solarquarter.com/2024/05/08/iraqs-prime-minister-courts-american-energy-titans-in-houston-roundtable-exploring-opportunities-in-energy-sector/
DNO - very positive and encouraging report regarding Kurdistan...
* Production from flagship Tawke license (DNO 75 percent and operator) in
Kurdistan largely restored after March 2023 Iraq-Türkiye Pipeline shutdown
* Oil prices in Kurdistan cash and carry sales now in upper USD 30s per barrel
* Company engaged directly and with peer companies in discussions with
Kurdistan Regional Government to facilitate the reopening of the export
pipeline, which, if opened, would double DNO’s Kurdistan revenue
* Stepping up investments in Tawke license by restarting completion of three
development wells that were discontinued last year following pipeline shutdown
Link for DNO Presentation:
https://www.dno.no/media/yr0louwz/q1-2024-interim-results-presentation.pdf
I've spent the last year accumulating cheap stock, it'll eventually get sorted out and has allowed me a chance of finally getting some returns here with an achievable average which wasn't the case before the priorliwas closed.
I've waited 15 years so will continue to be patient and wait, good luck everyone else that's held strong.