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That.
"and not relinquish it "
Not relinquish what exactly? They only get the Contractor share paid to them.
Have you looked at the report Deloitte does for the KRG? Note 10 (the link to this report has been posted here before)
Something haunts me about the delinquent $151m owed to us:
Has anyone thought to query where that money evaporated within the KRG (and send the bill + compounding interest) to the benefactor - as it sure as flux wasn’t the general population ?
The equilibrium referred to is the delinquent debt.
As to repayment instalments, that may be the way it pans out, but nevertheless GKP should preserve its cash and not relinquish it under agreements that are currently completely collapsed in extremis.
Straycat
"They should keep the advance payments and offset against year old debt (!) until there is some equilibrium restored. . "
Now they are only now being for the Contractor's share, as calculated per the PSC. GKP then pay MOL their share.
The $8m that was owed to the KRG has been settled in off-take of oil. So they keep the $8m which is good.
Cash balances haven't changed materially since end of August.
$151 million remains owed to GKP by the KRG. (I expect this to be paid only in installments once the pipeline is reopened for export sales.)
Those are the facts (except in parentheses where I have noted my expectation).
From the RNS:-
“Gross average sales are currently c.33,000 bopd and GKP is striving to increase sales volumes while prudently managing the start-up of wells that have been shut-in for several months and avoid traces of water. However, the continuity of local sales remains uncertain.”
Just because they have opened up some extra wells to meet the demand, it does not necessarily follow they have opened up EVERY well in anticipation of future events.
Given the evidenced uncertainty of the local market and the long running export pipeline dispute they will be treading very carefully IMO.
Better to miss a short term opportunity to sell production, as opposed to putting a well at risk of damage by flipping it from closed to open to closed.
They seem to be setting up a MIN MAX operation, maximising the production whilst at the same time minimising the risk of damage - careful balancing act.
I wonder which one of the pre-closure wells they will start up last if they want to avoid traces of water :)
Any discussion on Board cashflow behaviour must be perdicated on the facts.
And they are:-
1) GKP haven't been paid for twelve months and previous to that their have ben several serious breaches of payment trust;
2) GKP are owed $151m with no indication as to when that delinquent debt will be repaid, apart from vague statements of intent by the KRG (who are no longer the principal arbiters in this dispute);
3) At no point have GKP been offered any way forward under the PSC, and that contract is now under threat due to forces beyond GKP's control;
4) there is no specific signal for repayments beginning anytime soon...not by any of the acronyms in qustion;
So GKP have found another way. One that preserves their precious cashflow, enables them to manage their supply lines, manage their receipts and therefore manage their future for now.
No help from any of their contractual allies.
I say again, the Board have a duty to their shareholders and it's a primary duty.
' We are receiving advance payments into our UK account for it's net entitlement....'
The key words are 'advance' and 'for' and 'net'., i.e. we've collected the money up front (in advance); 'for' (to facilitate); 'net' (so GKP finally have control over whether/when GKPe get paid.
They should keep the advance payments and offset against year old debt (!) until there is some equilibrium restored. .
What they mustn't do is show more weakness...and I read that RNS statement as their commitment to sustainable cashflow and another example of the soft power that will 'help' the acronyms understand,
If I'm right in my reading/interpretation, then GKP will keep the advance payments and offset them against MASSIVELY delinquent debt.
Otherwise, what's the point? If you can't get paid, and that's been a frequent difficulty since inception and production, then what's the point?
The payment issue has now come to a head. And not before time.
I just hope AKIPUR remain solid, but because of their relative Balance Sheet issues, I don't know that will.
Finish , than i expected , did it go into auction at the end £1.14???
Indeed. That suggests local demand is at 60kbpd :)
So according to the RNS and reading various Media comments, GKP are adding $4-5 Million to the balance sheet each month going forward, if it continues like that while the pipeline remains closed thats a nice cash pile towards the end of 2023,
Though if the pipeline opens up the sales through to Ceyhan will dwarf that
is that a Ramp?? oops !!!
"@PUTUP
You are correct."
Yes I know I am. And likely for the same reason you do. ;)
Today , no amount of Ramps would have taken this here, £1.10 finish, GKP is in a very comfortable place ATM , imo
lets hope the Political Situation improves going forward for the next move on GKP
@FH1, “ Not a lot of comment on this part of the RNS. Why would GKP be starting up wells if pipeline wasn't going to open. ”
Maybe they couldn’t meet the increased local demand that we were all hoping for from those wells that were opened first :)
FH1,
Howdy Folk's
"Not a lot of comment on this part of the RNS. Why would GKP be starting up wells if pipeline wasn't going to open..."
Exactly, can cause a lot more damage by starting up a well unnecessary, then having to shut it in again rather than leaving it shut-in.... yee-haw
aimo & dyor
Great RNS OUT Today for GKP AND WTE....expect a rally on both this afternoon
Sorry Newdealz, u shoulda bought last week.
Agree , there is no need to Ramp, people can make their own minds up, im here for the Divi next year, which im fairly confident will be on the cards , 10p early Jan , imo then more to follow as we ramp up production,
All assuming Pipe line back on full flow , cash payments re-starting etc,
There is no point in challenging the KRG at this stage. History has shown that the quiet approach has been successful and will be again if the KRG ever have the money to pay.
So I do think JH is playing right and if challenging action has to be taken it is done in concert with the other companies in the area.
@PUTUP
You are correct.
Not a lot of comment on this part of the RNS. Why would GKP be starting up wells if pipeline wasn't going to open.
Any nice to see the US folk contributing to the chat.
Yes the price here is cheap but it comes with risk, thats why its been sub £1, now the rest if just gambling its going to recover and you pumpers trying to drum up the fear of missing out sitting with your fingers over the sell button.
Been around the block a million times heard it and seen it all before ;-)
At 33kpd $30 pb and 36% no need to ramp. GKP get 11m cash a month. Will be a long wait to buy in at 75p
Have they received interest on previous receivables from the KRG? No.
If you're not collecting gross field sales you're not in any strong position on the KRG receivable. They might have been able to pull this off a little with trucking sales but I wouldn't assume they're doing this when selling via the pipe to a local (aka KRG) refinery. The RNS explicitly states they're being paid their 36% share. Inferring they are being paid more than that is a leap.
"they can send locals to KRG to get paid"
And the international contractors with whom GKP needs to maintain a good relationship?
I wouldnt call it ramping to say its cheap at £1.10 and good chance we will see £1.20 soon,
Now £2.20 would be Ramping!!!!, however im sure it will get there 2024, seems a few are wanting the SP to be held back????
I WONDER WHY?????