Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Regarding the dividend, I spoke recently to the company and they said, the $25m normal dividend should be a floor. They have a preference for share buyback over special dividend, esp. now when they think the stock is very cheap. Last year they paid the special dividend because the cash balance was to big due to the delay in the 55k bopd phase development.
I don’t think one should assume a special dividend in 2020, however if the 75k bopd phase isn’t approved by the KRG when its time to propose the dividend I think its likely that they will do a special as in that case there won’t be much capex in H2 of this year.
Ideally GKP want the approval for the 75k phase before the last well in the 55 kbopd phase is completed so they can keep the rig and start to drill the wells for the 75k bopd target. The bottleneck seem to be i) MNR is slow, ii) The MNR isn’t completely satisfied with the has injection plan.
Armasmaximilian,
2020 dividend has been suggested at 2019 levels; $25m +$25m.
All dependent on cash flow and poo.
Ref : Gabriel Papineau - Legris at Hong Kong oil investment forum in May 2019.
BD,
Your professionals are right. No dividend is payable on treasury shares.
Whether they include treasury shares in the calculation or not is irrelevant.
The only thing that matters according to both U.K. and Bermudan company law is whether the dividend HAS BEEN PAID on those shares.
By GKP’s own volition (via Investor Relations written in reply to queries on this) no dividend will be received by the treasury on those bought back shares.
So it is perfectly possible for GKP to add the treasury shares into the calculation AS LONG AS they don’t pay a dividend on them.
The effect is simply to dilute the dividend payment made to us common shareholders, down from $50m to $49.1m.
GKP are not in contravention of company law because they are not taking the dividend that they have calculated.
Reference my post of Saturday @ 18.09 p.m. for details.
Regarding Capital selling down, it shouldnt come as a surprise given it was Mark Denning who was resposible for the GKP at Capital. Capital seem to have dumped a number of his portfolio companies after he was sacked in end of Oct 2019. I think Capital selling out is putting pressure on the stock but it dosent mean anything really for the fundamental view.
Has 2020 dividend been discussed anywhere? What's it to be?
Theoryman,
All the professionnals I have spoken to confirmed that they are not allowed to include the treasury shares for the dividend.
So it was a mistake.
Mikey,
Thank you very much for your explanations.
Perfect answers.
BD
Angina,
Slide #23 of the 2018 Annual Report clearly shows the positions of all SH wells at that time. Even without satellite imagery (subscription) the well can be seen to be somewhat N of E.
The statement, by the company at the time, that SH-7 would be drilled ESE of SH-1 was, like so many of these statements, "somewhat misleading" to put it mildly.
PF-3 does NOT yet exist - only as a 3D software image.
Thanks for clarification Mikey.
Your good self and BB are very valuable resources on here - moreso if you could agree ;)
Correction needed:
The heading is 259° from SH-7, from PF-1 the heading is ca 79°.
Your "keen eye for detail" appears to have let you down again I'm afraid.
SH-7 lies more or less due East of PF-1, at a heading of 259° and a distance of ca 2.6km.
From Simple Thorough Research
file:///C:/Users/User/AppData/Local/Microsoft/Windows/INetCache/IE/F8MHSUC7/gkp-cme-presentation-vfinal.-28.03.2019.pdf
Page 47
https://www.screencast.com/t/apUul05P
Note . . . "PF1 to PF3 is 2km"
Note . . . "Three 8" sour gas in-field pipelines"
And a long time ago GKP stated that SH-7 would be Drilled approximately 3km East-south-east of SH-1 which places PF3 approximately at the end of the arrow
https://www.screencast.com/t/qmb9gXlAeV
And strangely enough, showing on satellite imagery I have, around the end of the arrow is a large Concrete Pad, which I presume was used for Crew Cabin storage for SH-7 & SH-8 where drilled, so I would speculate that the large Concrete Pad will, could, may, possibly be used for the position of the PF3 Gas re-Injection Pumps Facility
(Can't remember the Rig number which drilled SH-7 but it had a very large Crew) (L600 ??)
(I remember it took some 220 truck journey's to move the entire Rig entourage from MOL's Duhok North site to Shaikan)
And all gained from simple Research using a keen eye for detail . . . . . . . . .
Hi Angina.
Sheikh Adi is to the northwest of Shaikan, and was found to have one corner of it in direct contact with Shaikan, so effectively is a small extension of Shaikan.
As such, as a separate Licence requiring its own Development Plan its own Production Facility its own Connecting Pipeline to the Main Export Pipeline in fact it own "everything", Sheikh Adi was deemed by GKP, "at a time of Financial Constraint" to be too expensive to continue to Develop further, so GKP relinquished the Sheikh Adi Licence.
And
Contrary to popular belief . . . if folks carefully read what GKP has released . . they will find the KRG did not take the $10,000,000 Relinquishment Fee and GKP has not got to do reinstatement work on SA.
I am not implying that Rosneft are doing anything with Sheikh Adi, those are Bravedogs words.
One step further . . I don't believe that Rosneft have taken Sheikh Adi and if they have, the small corner of the Licence in direct contact with Shaikan, and IMO through its size is not financial viable to be worth the effort to Develop further
Mikey - is SA the neighbouring field which GKP found, appraised but could not afford to develop because they were not being paid by the MNR regularly ?
I think GKP had to pay to hand it back to the MNR - and from what you imply, Rosnyeft are now developing ?
Confused as usual, Angina.
Mikey,
A while ago, Malcy showed pictures of Shaikan and somebody mentioned he said that PF3 « was awesome ». If PF3 exists, is it located on SH or SA? If it is on SH, GKP must pay for it and announce it. If it is on SA, Rosneft pays for it but doesn’t need to issue an RNS.
If Rosneft plans to extract oil from SA, a PFx unit is needed as well as a pipeline going westwards.
Lets deal with Rosneft first.
Each Oil Co with a Licence to explore for and produce Oil from their Licenced Field is responsible for "paying" for the Feed Oil Pipeline from said Oil Field to the Main Export Pipeline. End Of
As for PF3 . . it "has to be inside the Shaikan Licence area" it cannot be outside
It is always said that knowledge comes from Research, Research, Research and GKP >> has << informed the Market of "where" PF3 will be situated . . .
In fact, with very little difficulty but just through my own thorough Research I have known for 10 months "where" PF3 will be situated.
Straycat,
« Notwithstanding that, where’s the RNS explaining why they have adjusted company policy in this unorthodox manner? »
Better not recognize an error and put the blame on SZ.
Mikey,
A while ago, Malcy showed pictures of Shaikan and somebody mentioned he said that PF3 « was awesome ». If PF3 exists, is it located on SH or SA? If it is on SH, GKP must pay for it and announce it. If it is on SA, Rosneft pays for it but doesn’t need to issue an RNS.
If Rosneft plans to extract oil from SA, a PFx unit is needed as well as a pipeline going westwards.
The fact that there has been no corrective RNS from GKP for wrongly including treasury shares in the dividend calculation is a measure of their confidence that the dividend calculation is correct.
Either that or they know it’s wrong but, for whatever reason, are not prepared to put it right. Possible but unlikely imo.
Company law is clear and unambiguous on this matter, insisting that no dividend shall be paid out on treasury shares.
Whether it’s the Bermuda Companies Act 1981 42B(11) or the U.K. Companies Act 2006 S724(3), either way the matter is dealt with in the same way, even using the same wording:-
‘No dividend may be paid, and no other distribution (whether in cash or otherwise) of the company’s assets (including any distribution of assets to members on a winding up) may be made to the company, in respect of the treasury shares.’
So, on the face of it, by including treasury shares in the dividend calculation GKP are acting in contravention of company law.
But the key phrase here is that ‘no dividend may be paid’.
By representing that they are NOT RECEIVING the dividend payment on the treasury shares that their calculation generates, GKP can argue that they are in fact fully compliant with Company law which specifies only that ‘no dividend may be paid……in respect of treasury shares.’
Investor Relations covered this issue in their written response to the many queries on the matter:-
Dear xxxxx,
The calculation of dividend per share includes treasury shares as we need to base it on the entire issued share capital, however, they will not receive a dividend payment.
Kind Regards,
Investor Relations’
Whether or not they have included treasury shares in the calculation is totally irrelevant. Because according to company law the critical issue is not whether treasury shares have been included in the calculation.
The critical issue is that no dividend has been paid on those treasury shares. And If no dividend has been paid (IR = ‘not receive’) then no contravention has occurred.
Unfortunately this approach results in GKP having changed the absolute value of the dividend payment to common shareholders down from $50m to $49.1m.
A near 2% devaluation.
If GKP are right in their contention then they will not be issuing any RNS correction.
Notwithstanding that, where’s the RNS explaining why they have adjusted company policy in this unorthodox manner?
Wouldn’t it be nice if they told us why they felt the need to apply the dividend in this way…….all for a measly $900k.
Bravedog. . . . "where is PF3 located?"
Do you want to know where PF3 is being located ???
Straycat and Theoryman,
« What to do about this stonewall approach to shareholder concerns? »
What I have learned is that a bod or a CEO only listen to investors having a sizable stake in their cy. Starting claims against GKP can only be done by II and Capital Group just left. As none of the institutional shareholders is a real activist, there will be no pressure on the cy, which is registered in Bermuda.
We will have to wait the AGM to see which accounting trick they will find to settle the dividend problem. I left a comment about that in one of my posts. I agree with Theoryman that they weren’t allowed to pay a dividend to treasury shares and that it was probably a mistake. They’ll blame SZ!
The important questions are:
-when will regular payments resume?
-when will we know is gas can be used to stabilize the pressure in the Jurassic ?
-where is PF3 located?
-how much has been built on the heavy oil pipe to Ceyhan?
-what is the purpose of keeping treasury shares that aren’t cancelled?
Lucky we are buying our own shares eh... would love to wake up to the rns cancelling them all.
Straycat, there are two separate issues here that seem to be mingled.
The shares held in Treasury did not receive a dividend payment. There is absolutely no way they ever should have and according to the company they didn’t - matter closed!
Which number of shares should be used to calculate the dividend per share? The company did it one way and have not changed it. Everyone else I have checked with believes, but does not know for certain, that they are wrong.
A “worldwide” quest for clarification has just been instigated, it could well turn out to be a slow burner or even a damp squib but I haven’t given up.
Does anyone have a DIRECT email address for the new CFO?
Hi BD,
C0ckeye rightly poses the question of what to do for explanations of Board behaviour when you’ve lost trust in both them and their PR agency.
You point to the example of the payment of dividends to treasury shares.
When challenged on this matter, all IR could/would say was:-
‘As stated in the Dividend Payment RNS announced on 20 September 2019, the Company confirms that the calculation was made by its registrars and is satisfied that the calculation is correct. The calculation of dividend per share includes the entire issued share capital, including treasury shares.’
(courtesy of ‘grunties’ on II.)
What are you supposed to do with that as a response? What to do about this stonewall approach to shareholder concerns?
I have no answer.
Do you?
Or anyone else for that matter?
Theoryman, the net effect of their stated position is that we've all been short changed on the second tranche payment, whether or not they chose to take the dividend.
Did you get a chance to challenge them on their interpretation? Or was that all they'd say on the matter.
Bravedog, re the following point:-
“-the problem of the dividend paid to treasury shares isn’t solved.“
According to a reply from IR published on here 31st October, there is no problem because whilst the shares in treasury were included in the calculation of the dividend per share, they did not receive any payment.
The net result was that instead of distributing the previously declared $50 million through the two payouts, they only paid out circa $49.1 million to shareholders of the shares outstanding. It will be interesting to see how that is represented in the full year accounts.
I have found lots of people who genuinely believe the company have made a mistake doing it like that BUT none, as yet, are prepared to say they are certain - big difference!
Hi Straycat,
I have the same feeling as I don’t trust the management. Not the only one as Capital Group is leaving.
Either the Chinese and the Kurds agree to screw the minority shareholders again.
Or Trump manages to bring back the Americans in the Kurdish oil industry. For that to occur, you only need an American soldier killed by the Iranians or its proxys: IRCG will be decimated and the political landscape in Irak will change.
All this doesn’t explain:
-why the treasury shares aren’t redeemed?
-who has been buying the shares sold by Capital Group ?
-could these shares be sold to a new partner who could also take a stake in GKP ? That would give GKP money for the development of the field, but add another member on the board.
-the problem of the dividend paid to treasury shares isn’t solved.
Hi C0ckeye,
I haven’t contacted Celicourt because frankly I’ve lost faith in them. And I don’t think I’m on my own there.
I’m pretty sure IR wouldn’t help.
Where else to go for satisfaction? Dunno. Got any ideas?