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Thanks BB, your negativity in GKP’s prospects has given me more confidence in my investment. Shaikan heavy will be in demand long after light sweet crude has had it’s day.
"if the self-funding model still has legs.
And I believe it does.
"
How can you? The 'self-funding model' requires a contract with sufficient cost recovery headroom to 'fit' an agreed Field Development Plan. The company isn't close to concluding either. The arguments between Erbil and the MNR about the cost of extraction are just the start of what needs to be resolved. The company needs to no longer use waste sums of its own capital to fund the field development on behalf of Iraq. That's what sent them bankrupt. Instead they need to maintain a minimal capital base, returning any excess to shareholders, and not agree to a FDP that can't fit within the contract cost recovery envelope. I'm not saying maintain zero cash, but $86 million is far too much. Nearly 30% of the current market cap is earning next to nothing. They can cut that in half without materially affecting their risk of survival.
Good point well made BB.
Hanging over the company is the prospect of a new/revised FDP - which is now no longer the sole remit of the MNR in Erbil. SOMO and NOC now call the shots re how the Iraq oil industry should be developed and that will be felt also in the KRI fields. It's also not a given that all of GKP's output will be accepted into the Kurdish blend - again, SOMO will decide upon the export blend parameters and a fair proportion of the heavier SH crude may be permanently directed towards local customers who will pay much less than the international value.
Until that new FDP has been presented / agreed / forced upon GKP, and others, the company would be well advised to hoard cash or keep ANY dividend to an absolute minimum.
The cessation of flaring for example will be expensive, whatever form is decided upon. In a similar vein, forced (as in their timescale, not GKP's) exploration of the deeper formations will also eat cash.
Aah yes.
And the hits just keep on coming!
Truth is though, GKP can afford it and much more if the self-funding model still has legs.
And I believe it does.
If I'm wrong then I'm going to lose a lot of money...oh well. I can afford it.
Have a good weekend.
Disagree
In any event, don't cry when they issue more stock to cover the vesting of the next block of the 8.224 million options o/s.
That equates to deranged management of what is a fragile asset under threat.
GKP needs to preserve its equity right now, not give it away on a whim.
There's plenty of time for the Board to recognise shareholder support when they're through this trauma.
But not now.
Surely.
No need for $86 million to sit on the balance sheet earning f all. As far as I am concerned that excess cash is losing circa 15% per annum. Return it so we can put it to work for positive return.
The whole self-funding proposition depends on the pipeline re-opening...it's a given.
Otherwise GKP is just another traded stock with no intrinsic value.
What makes me laugh is that some investors don't get that.
Some of them even describe a scenario where with limited financial resources GKP would even consider dividends and/or buybacks as a serious option...idiots.
"GKP are debt free" almost, now finally with "the payment of all remaining overdue invoices in 2024." So now that they are finally current on their payables they have debt of about $13 million. They've managed this well.
"self funding" depends on what contract they end up with. Unfortunately little progress has been made on that. Let's see how that unfolds. As has always been the case, upside depends on the receipt of overdue receivables, contract ratification and pipeline reopening. The current stock price is still pricing in resolution of much of these within the next six months. Cheap for good reason.
The sell off continues 90s Monday anyone ?? God I'm good at predicting this share price .
Always 3 down days after a RNS.
“We seek to accelerate the settlement of the cost issue and resume exports as soon as possible,”
I only see upside potential here! £1 is the basement especially for a company that paid 80% in dividends to the £1
Is itsaponzi (a) the old itsaponzi or someone making fun of him 👀
One (a) Itsaponzi
Don’t believe that anyone would believe that you would have ever had the balls to put real money as opposed to fantasy into GkP
It's early yet !! I got slated for selling at 126p and called 90s then . But what do I know anyway.
Did Bloomberg ask any other questions?
Minister, with reference to the conditions set out by APIKUR that need to be in place before exports can restart.
Minister, will the proposed amendment to the budget meet the requirements of APIKUR regarding the commercial equivalence of the reviewed and amended contracts?
Minister, have APIKUR approved the mechanism for repaying the outstanding debts, who will act as guarantor?
Minister, have you discussed any of this with APIKUR since the meeting in January?
If share price predictions were as easy as Itsaponzi (one a ) would have us believe, he would be a millionaire and not the idiot that he all too often presents himself to be. Pity 90 didn’t arrive before 108 or I would have been a little bit richer myself.
Patience still required
Just listened to yesterdays webcast from the GKP website. Pleased to hear John Harris's final words from the Investors Presentation, 'SHARE POTENTIAL BEING FANTASTIC VALUE CURRENTLY'
Get In.
This was a decent set of results given what the Board faced, most of which was outside of their control.
They played what was in front of them.
No chance that a serious Board would have pandered to shareholder clamour for dividends or buybacks when cash is at a real premium right now.
Looking at the financial statement, GKP only 'lost' money because of accounting impairments due to delinquent debt...an accounting requirement which has nothing to do with trading viability.
And on that matter, I wish PIs would concentrate more on future performance than past debt.
That debt is owed. $151m. No question.
But that is not the future. That's the past.
Sooner or later this impasse will be resolved.
GKP are debt free and so are uniquely positioned to drive their self-funding proposition forward.
I'm getting tired of gainsayers licking their wounds in public.
That was a good set of results in trying circumstances...
#itsaponzi a 90s close, I doubt it, given good results under extremely challenging circumstances,. broker rating 165p following the RNS (without ITP open) and potentially a lot of good news in the pipeline! Yesterday’s SP was taken down to close at 104.80p with what appears to be 117k worth of buys after the close.
Please help me what role MOL plays in this area.
Having read the RNS and presentation (unfortunately missed the webcast) I must say given the circumstances I think JH has done an excellent job. I think since his appointment a few years back I feel a lot more comfortable that there is better alignment between the BoD and shareholders. Let’s not forget the previous regime at the held JF and the crew were absolutely diabolical and purely self serving.
I am liking the fact they draw a line in investing further until restart, back payment and commercial framework aligned with existing PSC terms are agreed. Also, like the fact they are calling out rewarding shareholders with dividends when time permits.
Unlike a few I am glad they did not consider a dividend this time around and are preserving liquidity. One thing we have learned here being holders is uncertainty is there pretty much all the time.
Feeling confident that a resolution will be found in time , just a shame it’s taking so long.
GLA
Ponzi - my Donald Ducked Coockoo Clock tells me the exact time twice a day - without fail.
Here’s another Home Truth….. Poochin’s a nutter.