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Surrey,
I have done (ad nauseum) and I can't see any reference to that $500m anywhere in the main body of the accounts.
You'll have to be absolutely specific about what it is you're referring to before I can comment. Show me where.
However, the point is entirely academic.
If they're in GKP's numbers, then by definition they're in mine.
If they're not in GKP's numbers they're not in mine, again by definition.
Because the analysis itself is defined exclusively by what GKP choose to include or exclude in their figures.
Straycat, look at the Assets figures in the Balance Sheet.
ss,
Yes I know surrey, and I feel sure there's value there.
But my reference point for analysis are the audited company accounts.
So unless and until GKP recognise them as assets for reporting purposes I mustn't include them either.
Straycat, there are several references to the $500m due to GKP and MOL for recoverable past CAPEX (including recently)
BTW what the company says about there now being no undisclosed inside information cannot possibly be true.
For example:
1. The content of the new FDP is known within GKP, but is unreleased
2. The content of the new CPR. ( Ditto)
3. The situation regarding the unpaid monthly revenue payment (Ditto)
IMO
Largo,
I may be wrong, but I don't believe that $500m is recognised by GKP anywhere in their audited accounts.
I certainly couldn't find it in the notes to the accounts or anywhere else.
Nice post Straycat....you seem to have your finger on the calculations.
Can I ask where does this....Petroleum cost pool: c.US$500m fit in..?
We now have an Operational Update that enables more detailed analysis of what the next twelve months might look like.
On the basis of the November end cash balance, and the updated production levels I’ve taken a look at the projections for 2020 based on 42k bopd and 50k bopd respectively.
And, in summary, it looks like this.
If all we achieve is MAINTAIN current production levels:-
2020 @ average 42k bopd:-
Revenues $260m - $280m;
Profits $70m - $80m;
(before dividend payments)
Receipts - $240m - $260m.
Capex - $180m - 220m.
If we INCREASE production levels as per revised operational update:-
2020 @ average 50k bopd:-
Revenues $310m - $330m;
Profits $90m - $100m;
(before dividend payments)
Receipts - $290m - $310m.
Capex - $180m - $220m.
Key Assumptions:-
Terms of Crude Oil Sales Agreement to December 2020;
POO @ 2019 average levels.
I could finesse these figures to infinity, but there’s no need and there’s no point.
On any set of sensible assumptions we are going to be collecting significantly more cash than we need to finance our ambitious capital spend for the year.
Look at our worst case cash flows using the above P&L perameters:-
1) At 42k bopd;
January 2020 Opening cash $250m - £206m( Nov 30th declaration) + $44m (late Nov and due Dec receipts on time);
2020 Receipts $240m - $260m;
Capex spend $180m - $220m;
General & Admin spend $20m
Worst case closing cash $250m - $270m.
(before any dividend payments).
2) At 50k bopd;
2020 Opening cash $250m - £206m( Nov 30th declaration) + $44m (late Nov and due Dec receipts on time);
2020 Receipts $290m - $310m;
Capex spend $180m - $220m;
General & Admin spend $20m
Worst case closing cash $300m - $320m.
(before any dividend payments).
Summary.
Even at average 42k bopd for the year, we close 2020 with $250m - $270m in the bank i.e. same cash balances as we start the year with AND we’ve spent $220m on Field development towards 75k bopd. This is before any dividend distribution.
At average 50k bopd for the year, we close 2020 with $300m -$320m in the bank, $50m - $70m MORE than we start the year with AND we’ve spent $220m on Field development towards 75k bopd. This is before any dividend distribution.
Of course the Board have seen this so they needed a plan to manage the excess cash.
And they’ve chosen buyback.
(Interestingly, they have decided to place those repurchased shares in Treasury, not for cancellation – why?).
That decision is up for debate. For example, the Board might have looked at trying to pay off our $100m loan facility which carries a hefty 10% coupon.
Or they might have looked at accelerating the Field expansion.
Maybe these options are still/have been under consideration.
But certainly if the Field development programme proceeds on plan there will need to be a more strategic approach to cash management over the next few years, such are the anticipated net inflows.
ALL IMO. DYOR.