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Well Itsaponzi is it time for you to eat humble pie
As I predicted I’d make 15% on my Friday day trade purchase within a week. Just done it within a day.
Now I’ll sit on my core holding and wait for the news that the price rise is indicating because when the pipeline opens I’ll be looking for 226 and not the 126 that I achieved today
Buy on the rumours sell on the news
It’s not just walleye and itsaponzi that are short here. There were a few others just below the reporting 0.5% so hopefully they’re all scrambling for shares 😂
Usually Apikur have called out the IRG for their BS but not this time. Could be they are waiting for a meeting with KRG before posting.
Atb
;)
Itsaponzi thanks for your latest recommendation now I know what not to do.
If you had followed my lead and purchased @108 on Friday you’d be very close to the 15% up ( 123 real time now ) that I predicted. Just as well I didn’t wait for your 90p prediction.
Can they buy enough volume though, it could send them under if rise continues, they are already in a very dangerous position, imo i think they will be considering their potential losses if news breaks out???
The smart play is to increase their short not sell it..
Be careful buying into this rise you know by tomorrow close of play this will be back to 110p. Low volume Gen / Dno not really taking off . Nice trade if you got out at 124p and buy back tomorrow at 110p.
We know nothing will happen here it never does .
Have we had a leak, oil pipeline opening????
Walleye Capital are going to bleed on this news lol
Rog
I agree more patience is still needed & we appear to be slowly edging towards a resolution.
In the meantime I have calculated what I believe our monthly net current cash generation is as follows:
30,000 BOPD x 36% (GKP net share) x 30 days x $30 = $9.72m
Monthly cash outgoings $6m (as recently reported)
Estimated net cash generation $3.72m
This can be flexed according to your view of BOPD & the price of oil.
The reported cash position at 20th March was $86m.
Accordingly we should have approximately $100m in cash in about 6 months time.
Until we have a final resolution of all outstanding issues & given the risks associated with supplying into the local market it would be imprudent & far too early to re-commence distributions either via buy backs or dividends.
At a price per barrel of $25 & 30,000 BOPD the above calculation produces net cash generation of $2.1m per month.
The company has told us break-even is a touch over 22,000 BOPD & I would therefore imagine if we dropped below this it would be a reportable event.
All in all far from a disaster.
Despite some optimistic talk of buy backs & dividends I simply can't see the board contemplating this until everything has been resolved.
Hi Roger,
Appreciate your posts and views, lets keep it all crossed this time. Got a decent amount of skin in the game on this one as I believe the rewards will be good for everyone once sorted out once and for all. Iraq needs foreign investment, and they want it to be balanced, not just all under Iranian, Russian and Chinese axis.
Belgrano While it will be all too easy to agree that we’ve suffered far too many “false dawns” to believe in any positivity , i do dare to say that there is an air of difference today.
Iraq are certainly talking to Turkey and they have reached an agreement regarding border security. A firm date has been set for a summit with Biden and an actual date has been mentioned for the much delayed Erdogan visit. Both this month.
An agreement regarding the payment of civil service salaries seems to be in place. The USA have imposed dollar payment restrictions on the ability of China Turkey etc to pay for Russian oil in a timely manner and they have put in place a restriction whereby Iraq can only be paid in dollars for all of the oil that they export via specified US banks, the US have also flexed their muscles again regarding Iraq’s ability to pay for and import Iranian energy.
Iranian influenced Islamists have been blasted into submission by American force.
While there are certainly those that wield power in Baghdad that wish to ‘screw’ the Kurds on behalf of Iran, Kurdistan is a powerful ‘balloon’ that it will not be in Iraq’s interest to squeeze too much for far too long at the risk of a burst.
All of that plus a feeling that pragmatism will at long last prevail.
I could be wrong of course but if share trading was a matter of logic anyone could succeed, and that will never happen.
Patience Please
Re. “ I love it how people expect 35 when the company was last paid 25 “ a 29% lower figure.
It wasn’t so long ago when GKP were being paid more than 30 for trucked oil. At that time the international oil price was mid - 70s
Their subsequent announcement that they were only being paid 25, albeit for larger amounts, disappointed the market.
The current international price has recently increased to 90+ A 25 % increase within a matter of weeks, and we have not been informed if this has had a positive effect on the disappointing 25. However even if the price remains at around 25 this is a profitable amount, especially on the far higher volumes recently reported.
The calculation of a share price however cannot be accurately calculated in the manner that it was Put Up as a complicated value calculation. The market price is subject to far too many variables that include risk ( we’re high risk and always will be in that part of the world)sentiment, demand, future prospects, overall market conditions, and of course the profits ,performance, assets ,debt yield etc. etc. plus the unknown eliminates that make the current price a gamble. If it wasn’t a gamble to some extent share trading would be too easy and idiots would make easy money. There are also those that swear by nothing more than the past movements on a chart taking no account of anything else including calculations of value that can be Put Up that maybe accurate but are rarely correct and don’t factor in future events such as politics.
All of the above should be understandable to someone that takes the time to Put Up high brow calculations in the manner of a clever dick based upon value.
I strongly suspect that this is just another false dawn, with Barzani saying "initial agreement made on the oil issue", which in effect says nothing concrete and no different from words spoken a year ago. These fine words probably did originate from Baghdad ministers as they do find themselves in a tighter spot with Uncle Sam and Turkey, and attempts to blame the IOC's are just lies. It just gets them off their backs, when they have in effect done nothing concrete to actually resolve the issue like tweaking the oil and gas law to allow higher crude payments than currently exist.
I expect the IOC's or their reps haven't even been approached.
Love it to have truth behind it, but see too many false dawns like this so lets treat with a huge pinch of salt until we see actual achieved facts and results. 95% chance here that its just BS.
Still nothing achieved despite some willing from some parties for a resolution still has to be ratified by Iranian sympathisers in Baghdad who will do Iran's wishes.
Ugh, I've no idea what you just said but I think you forget that there are two sides to the ledger. One side is the making of value (+ to equity value) and the other is paying it out (- to equity value). If, and only if, the first is higher than the second does equity value grow. Note, you can always 'get value out' of a publicly traded shareholding by selling some. There's no need to wait for the company to distribute value to you.
And where did the ability to make 'massive' (yes, supernormal) dividends come from? Over the last three or four years GKP recovered the bulk of the CRP (creating value for current holders by recovering the expenditure of previously wiped out capital contributors). They could then pay it out to current shareholders. Very little came from true, lifetime, project profit generation.
Here we go gents: https://www.iraqinews.com/iraq/iraqi-kurdistan-president-confirms-reaching-agreement-on-oil-exports/
Two years ago when Brent was at $80 (now $91) and GKP in $-30m net debt (now $+86 net cash) Stifel Research (non-paid research) attached a £361p target price on GKP (close to 20% (!) discount rate).
https://i.imgur.com/3OwxsA3.png
When the IOCs write their new PSCs with SOMO we get the same terms as Exxon/Total and the riskpremium cut in half. Furthermore, no more -15% discount on crude sold because it was from KRI, which no one wanted to touch besides Turkey.
A normal discount-rate and sector-peer multiples will put most target prices above 400p (IMHO).
PUTUP claiming GKP to be "drastically overvalued at 95p" provides me with a fantastic entry point, and will make for great comedy in a couple of months.
// Strong Buy since 91p (that's when I entered this part of the forum, if you look at my entire history).
Ye Goodies, is PUTUP actually quoting the Trolls favourite "The value of the company drops in proportion to the dividend amount", hinting of course that it's not possible to get value out of the investment, while intentionally ignoring the massive dividend payouts past and (potentially) in the future GKP have paid out 🙄
Investors 'might' lower the discount rate but that doesn't change the fact that money went out the door. "All else being equal" means just that. Personally, I don't 'value' dividends at all (and would not alter my discount rate as a result of them). To me, the value the company can actually generate is the only thing of worth (and builds share price) and not that it decides to pay some of that out. You might feel otherwise and if our difference of view is great enough then perhaps at one point I will sell to you.
And, yes, the best possible source of capital returns is recovery of the CRP much of which is in the invoices that are now long overdue. But, as I said, $25 per barrel or even $35 doesn't allow a lot of gross field sales headroom for those to be paid. For that, as mentioned, we need a return for exports. The next best place is a combination of both the excessive cash sitting on the balance sheet and the little biddy bits of CRP that are being recovered each month via local sales - there's still $50-55 million slowly being recovered. (Remember that current revenues are still flattered by excess cost recovery - that little bit of the CRP that has not yet been invoiced.)
"The share price is low enough to offer the prospect of value accretion through capital expenditure in that direction (unlike previous occasions)."
A buyback isn't "capital expenditure". Money leaves for nothing in return. It's distribution. But you, as would I, might feel that increasing your relative ownership at these levels (by not selling into the buyback) is a decent trade. The success of that too, however, depends on a return to exports via the pipeline.
As for dividends (or buybacks), yes maybe they pay out a little of their excess capital. “But the hint is in the words "pay out" - the value of the company decreases when funds are paid out and all else being equal the market cap reduces accordingly.”
Ah yes PUTUP but the market is not entirely cold blooded. Even the most sanguine accountant would see some value in the sentiment of capital returns, through dividends or buybacks.
As I said to you previously I now favour a buyback. The share price is low enough to offer the prospect of value accretion through capital expenditure in that direction (unlike previous occasions).
Putup - don’t quite agree with your arithmetic:
if dividends are paid, the demand for shares will be stimulated…. sp will rise with demand and that’s reflected directly in market cap (no. of shares in issue X sp).
We must remember that this is only accountancy=arithmetic…. not a triple integral calculation.
Arrears recovery (+ compound interest due surely which any court will award us ) could be paid out as a dividend …. you do the arith.
"No problem if I’m wrong because @ 35 dollars a barrel 108 p and a reasonable profit margin"
I love it how people expect $35 when the company was last paid $25... a 29% lower figure.
Just for kicks I plugged $25 per barrel FOREVER into my model. Without arrears recovery (there isn't room for it at those prices) it suggests a fair value for GKP (50k production in perp sold at $25 and assuming the current contract remains intact) of 83p per share. (£1 year end discounted at 20% to end April.) The current share price assumes a LOT better scenario than limping along forever with domestic sales at $25 a barrel. The equivalent but assuming $35 a barrel sale price is 114p. So you could say the (bullish?) $35 per barrel scenario is pretty much fully baked into the current price already. We need a return to exports and recovery of arrears to make appreciable gains.
As for dividends (or buybacks), yes maybe they pay out a little of their excess capital. But the hint is in the words "pay out" - the value of the company decreases when funds are paid out and all else being equal the market cap reduces accordingly.
Might be worth selling the rumour on this occasion, before any forensic examination of the IOC's new situation.
More confirmation of some sort of deal by President of Iraq
“ The President of the Republic, Abdul Latif Jamal Rashid, confirmed today, Sunday (April 7, 2024), that an “appropriate solution” had been reached to export Kurdistan’s oil and employees’ salaries.” (Courtesy of google translate)
No idea what this deal mean for the oil companies. The fact Barzani has gone back happy means he’s got what he wanted but doesn’t mean it’s what the oil companies wanted. One way or another looks like April is going to be the month of make or break.
ATB
https://baghdadtoday.news/246598-%D8%B1%D8%A6%D9%8A%D8%B3-%D8%A7%D9%84%D8%AC%D9%85%D9%87%D9%88%D8%B1%D9%8A%D8%A9-%D9%8A%D8%B9%D9%84%D9%86-%D8%A7%D9%84%D8%AA%D9%88%D8%B5%D9%84-%D8%A5%D9%84%D9%89-%D8%AD%D9%84%D9%91-%D9%85%D9%86%D8%A7%D8%B3%D8%A8-%D9%84%D8%AA%D8%B5%D8%AF%D9%8A%D8%B1-%D9%86%D9%81%D8%B7-%D9%83%D8%B1%D8%AF%D8%B3%D8%AA%D8%A7%D9%86-%D9%88%D8%B1%D9%88%D8%A7%D8%AA%D8%A8-%D8%A7%D9%84%D9%85%D9%88%D8%B8%D9%81%D9%8A%D9%86.html
I’ve upped my recommendation owing to the high level of the recent announcements, but the most encouraging thing that has now emerged is that an actual date has been stated for Erdogan’s visit; April 22. (Rudaw)
Personally I can’t imagine a situation where two leaders that have been at loggerheads for so long on issues such as oil, water and border security, will meet and NOT make the grand announcement of an agreement and with the price of oil being do high, plus the recent pressure that has been applied regarding the delayed payments in U.S dollars for Russian oil,