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I’ve said it before, and I’ll say it again,” NO NEWS IS FAR WORSE THAN BAD NEWS “ when will this sink in with all those on here that are dreaming of a wonderful outcome with this Dysfunctional outfit.
I think all genuine investors are starting to feel like this . But I share the view that news could be being suppressed by the Kurds for political reasons , while negotiations are ongoing with the USA/ICG. However in my experience its usually good news that follows.
IMO
slings,
Operational updates are simply progress reports and as such should present no problem, but they do.
Corporate updates might be a little more sensitive, but in principle are simply further and better particulars of initiatives already announced so should present no difficulties, but they do.
Updates on relationships with the KRG and the MNR are clearly more sensitive. But what's to prevent announcements on negotiations with the KRG and/or the MNR if they are censored by those parties in advance?
As you point out, their absence only fuels the speculation about progress.
All in all this aspect of GKP performance is a major weakness UNLESS they have no choice but to bunker down.
My feelings are one of nervousness about what kind of PSC and FDP we will be operating under in the future - a nervousness created by the total drying up of any company info on this.
All vacuums create anxiety(and usually worse) and until the company comes forward with info on future KRG relations it will be a major negative factor for our share price.
I have no idea how to get the company to be more transparent on this and other issues since they seem to have retreated into bunker mode.
I will continue to contact them to operate in a more open and shareholder manner.
slings,
It's a good point, though I think guys like C0ckeye, ANGINA, Invstrat, Bravedog and others might disagree.
You've obviously got strong feelings on the matter, what are they?
Straycat you say "for as long as it manages its relationship with the KRG ..." Spot on you have identified the number one issue as at today. Until this is resolved all else is secondary/hypothetical. So why is so little attention given to it on this board?
Using 2019 First Half Results and throwing them forward on the same basis;
55k bopd = annual sales $354m and $115m operating profit;
75k bopd = annual sales $480m and $155m operating profit;
85k bopd = annual sales $550m and $180m operating profit;
110k bopd = annual sales $720m and $240m operating profit.
Next year the anticipation is that we pump 40k bopd until Q3 when we move to 55k bopd. On that same basis then 2020 results look like-
Revenues $310m and $110m operating profit.
Obviously these figures are purely based on 2019 1st half outcomes and will vary according to real future experience including poo, and lifting costs which are assumed at an abnormal $3.9 pb per first half 2019.
But the detailed forecast assumptions really don’t matter. However you look at the numbers the Company has a phenomenal fundamental trading proposition.
It is unique.
We all (I include myself ) need to understand what we’ve got on our hands here.
If the total investment is in the region of $1.34bn over the next nine years, the ’on plan’ annual trade receipts over the same period amount to some $4.5bn or more. Truly remarkable cover.
This is only possible because of GKP’s set up.
It has no stockholding requirement;
It has one contracted customer;
It now enjoys seamless regular monthly payments from the MNR;
Its operating costs are tiny;
Its fixed costs are rigorously controlled. Sales currently stand at around $500k per employee;
Its profit is limited only by the p.o.o. and the size of the field.
So for as long as it manages its relationship with the KRG this capex plan will succeed, subject to operational obstacles.
And we are definitely not the only ones looking at this spectacular proposition.
This is a big Independent investment with massive profit and cash ramifications going forward. It will need careful and delicate financial management over an extended period.
The future cash flows suggest massive surplus cash generation……what’s the plan for that?
This proposition is potentially much bigger than the journey to 110k bopd.
And as such, it needs heavyweight financial oversight .
Billions of pounds are under consideration over the next period, and we’ve now started down that track.
Without first class financial backup the whole plan is at risk.
So where is he/she?
ALL IMO. DYOR.
Broadford, yes of course your numbers are right,
However - where I struggle is with your claim that the company is not self financing as it has stated over and over. Indeed, if it were not why would they initiate a buy back for such a large sum. There was no benefit. It was not a drastic measure of a desperate company as some would like to paint the story. In fact, in their resolutions it was spelled out as only done if needed timely and if they thought appropriate.
I can't thnk this team wouldl shoot down their own finances in this way by spaffing the money away. I mean I've seen one company do such a thing on AIM and subsequently go bust but I can't believe GKP would do it. Especially as we have essentially (IMO) a causcious bean counter in charge. Teh moeny spent this year on Dividends and Buy back coudl have bought soem serious assets elsewhere. Yet they choose to spend it on GKP shares and divi's..
The drill holes and dont report flow rates for months. They do or dont' appoint CFO's.
The list of bizarre behaoviours go on.
Good morning Mikey,
thank you for pointing out that the figures posted were incorrect.
In the thread so far there has been no mention of the assumed Brent price - which is central to any sort of forward revenue projections.
I have posted this before:
At stable $60 Brent, and assuming the present variables remain the same (10% Royalty, 30% Infrastructure Tax, 80% WI for both CO and PO, $21/bbl discount for SH grade incl all fees), the 55Mbopd level should generate approx $25M per month, or $300M p.a.
If, however, the WI% is calculated at only 58% for both CO and PO then that would drop to approx $18M per month, or $216M p.a.
Recent annual revenues have benefited from a Brent price higher than $60/bbl, so the projected figure of $450M indicates an assumed Brent price of almost $80/bbl in conjunction with the 80% WI I mentioned.
Good luck with that...
Armasmaximilian.
"So at 55,000 bod we're making est. 450 mil a year"
I find your above statement kinda hard to believe, plus you don't say whether your 450m is Dollars or GBP.
55,000 x 365 = 20,075,000 barrels per year
Your claimed 450,000,000 ÷ 20,075,000 = 22.42 per barrel earned by GKP
Which means it's your maths that are out of kilter not the Market valuation of GKP
I remember GKP has said that under the terms of the PSC their Gross earnings would be in the region of c. $8 per barrel which equates to :-
@ 55,000bpd x 365 = 20,075,000 barrels per annum x c.$8 = $160,600,000 pre tax & maybe transport costs.
At todays Exchange Rate $160,600,000 = £124,939,573
So at 55,000 bod we're making est. 450 mil a year
Surely market price then is billions???
What are we talking, 2 billion? 10?
Depends of the PSC that the new owners will get , will it run for the duration of the field? and what conditions there are.
Using logic we should be worth much much more now and higher again when we hit 55k. But this company doesnt seem to behave like other companies. The Bod could start by communicating with its shareholders, still no word on the drill or pipeline tie in which is quite disapointing.
Any ballpark figure....
When we get to 55,000 bpd
Then
110,000 bpd?
Paying divi...
Surely it's multiples of the 450 million today