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.
"Can anyone enlighten me with regards to the % cut taken by the KRG on the local sales and how they could continue to take that cut long term without paying some of the money that they owe GKP etc. "
The PSC is the PSC whether the oil is sold locally or exported. Just put a sale price of $30 in the formula.
Would be more of a threat if they weren't already producing oil.
Agree overall the CEO sounded very positive. The immediate risks have been managed through local sales. There is a lot of competition to buy GKP's crude so can expect more than 23kbpd sold. Even up to 44kbpd. GKP are cash flow positive, they are not going bust. And CEO nearly let slip that pipeline will be open very soon. Overall he's done a good job in a tough situation.
'Even if pipeline reopens, no oil production until guarantees given.
Was this addressed during this morning presentation/questions.
At last the group of oil companies are standing their ground, even if it means extra delay.
https://www.bnnbloomberg.ca/iraq-export-pipeline-closure-has-already-cost-about-4-billion-1.1965597
The companies said they won’t resume production and exports unless they have a clear contractual arrangement with Iraq’s federal government for future payments. They had been working in the semi-autonomous Kurdish region under contracts that gave them a share of production and profits from the fields. Iraq’s federal government disputed those deals, saying it’s the only entity that can legally sell any oil pumped in the country.
"The group said it “will not produce oil for pipeline exports until it is clear how international oil companies will be paid for their contractual entitlement to past and future exported oil.”
Wow, all this for a couple of grand invested, CCC? You really are sad! Go blow on something else more positive, have a wild weekend somewhere. Life's too short.
Yes question of being paid when pipeline is opened was addressed. Relations with KRG are good and they meet very often. Seemed very confident that these issues will all be sorted out soon.
Next month GKP have FCF of $5.3m based on 23K bopd. If you listened to the presentation you will know they are going to try to increase to the maximum of 44K bopd via trucking. This will give them about $18m FCF per month.
Even if sales stay at 23K then they are still raking in $5.3m and equates to $60m a year.
A couple of months ago we had shutdown with no sight of opening and the price jumped around £1.10 and £1.30.
We are now a profitable company and the Markey thinks we are only worth 95p. Most of the damage has been caused by the Reuters article by one of their experts in Bangalore lol. I recommend you look up that individual on LinkedIn and see what her career pre Reuters.
There is no way about it nervous PIs have been robbed today.
Trucking and being profitable has negated the pipeline shutdown. The main risk is now how Baghdad will react. Can Baghdad stop the trucking? if you think yes then you should sell. In my opinion the international court only found that Turkey should have not allowed the oil to flow through the pipeline without agreement from Baghdad. The contracts are valid and Baghdad will make themselves a pariah within the international business community if they tried to cancel the contracts.
Going forward Baghdad needs to either put forward a more acceptable proposal to the IOCs or buy them. The IOCs have the valid contracts so even worse case scenario I see Baghdad would pay £500m to GKP when you consider they are losing $1bn a month.
As usual DYOR and good luck to all holders.
And yes I have bought more today. Time will tell if this was a genius or stupid move.
No selling to locals is not the new Business As Usual. The Board said as much today. As soon as the pipeline is open they will start exporting.
By buying oil from the likes of GKP at $30/bbl, someone is making serious money
The question is who is the beneficiary of this? Can it anyhow influence the decision making process re pipeline launch?
May it be the case that local sales at heavily discounted prices is a new “business as usual”
CCC. That’s good business, you wouldn’t want to start supplying without knowing if, when or what your going to be paid. GKP and the others do not want be bent of a barrel and sha&&ed (again).
Even if pipeline reopens, no oil production until guarantees given.
Was this addressed during this morning presentation/questions.
At last the group of oil companies are standing their ground, even if it means extra delay.
https://www.bnnbloomberg.ca/iraq-export-pipeline-closure-has-already-cost-about-4-billion-1.1965597
The companies said they won’t resume production and exports unless they have a clear contractual arrangement with Iraq’s federal government for future payments. They had been working in the semi-autonomous Kurdish region under contracts that gave them a share of production and profits from the fields. Iraq’s federal government disputed those deals, saying it’s the only entity that can legally sell any oil pumped in the country.
"The group said it “will not produce oil for pipeline exports until it is clear how international oil companies will be paid for their contractual entitlement to past and future exported oil.”
Can anyone enlighten me with regards to the % cut taken by the KRG on the local sales and how they could continue to take that cut long term without paying some of the money that they owe GKP etc.
I also wonder if local sales might be finding a route, via some greedy hands, to Turkey, in which case they might have a reason to keep the pipeline shut, higher SOMO price oil.
Wonder which local familly is promising us a few dollars for delivering them their $30/bbl ( and probably selling it onwards for at least double that ) ?
I will be absolutely astonished of we ever see any payments from what will once again become our freewill donations of this cheap oil to them.
I think we all know how this will pan out (again).
Doesn't surprise me either. As I've said before, you have a situation where the stock is either worth a lot more than it is today or a lot less (cash per share). It's not about whether production or pricing is a little more or less than expected etc. It's about whether the company has a business plan or not. In those types of situations one can expect rather extreme share price volatility. We're not out of the woods yet. Quite obviously, the share price doesn't reflect a return to normality but neither does it reflect the much lower value if one were to assume local sales only from here on in. Things remain very hairy.
'They seem calm and positive I think, they seem quietly confident we will hear good news soon
Interesting he slipped a couple of times, sounded like he was going to say agreement on pipeline is imminent
Sounds like another meeting in a few days should agree final outstanding points
Get in this week I think'.
I think they came across as quite calm and composed too. Taking into account their incentives, like our divis, are also on ice or at potential jeopardy.
Key points picked on:
- Going concern risk reported by Reuters is not valid. This would be risk if there was no production.
- GKP are already cash flow positive with 23kbopd
- Trucking operation could go up to 44kbopd
- There is high demand for GKP crude in local market
- Stated that Erdogan is expected to visit soon which supports the various news reports
- Stated could get back up to 55kbopd within 4 to 6 weeks
Overall more positive than had anticipated before today's annoucement. Remains a hold for me and possible buy on dips
The monty python team would no doubt raise spirits by pointing out that if GKP was paid by the Kurdish Authorities for only 50% of the oil they produce (I am not sure of the correct figure) then currently they are realising the pseudo-equivalent of $60/barrel
How much lower it will go is anyone's guess.
That no news yawn did not stop an 8% drop
They seem calm and positive I think, they seem quietly confident we will hear good news soon
Interesting he slipped a couple of times, sounded like he was going to say agreement on pipeline is imminent
Sounds like another meeting in a few days should agree final outstanding points
Get in this week I think
"Patience still required"
Understatement of the century
So basically pretty much as expected. Local sales at $30 a barrel. 23k by end of August. I've been modeling 25k for September. Covering costs and still waiting for some sort of resolution for which they have no further clarity.
Basically no news. Yawn.
Odd movements again today on a good RNS is about par for GKP.
Not sure what more they can currently do than what they are and will hold / continue to accumulate whilst we wait.
Thank you, Dr.
I didn't manage to catch all of it myself due to the fire alarm issues they had.
I'll try and listen to it again and also catch the IMC call.
KR
ZA
What he said, sorry was in a rush out.
Hi C-ckeye
There's a 10pm call, delayed to 10.30 as per the RNS.
GKP's management team will be hosting a presentation for analysts and investors at 10:00am (BST) today via live audio webcast:
https://brrmedia.news/GKP_HY23
Management will also be hosting an additional webcast presentation focused on retail investors via the Investor Meet Company ("IMC") platform at 12:00pm (BST) today. The presentation is open to all existing and potential shareholders and participants will be able to submit questions at any time during the event.
https://www.investormeetcompany.com/gulf-keystone-petroleum-ltd/register-investor
Investor Meets Company is at 12.00.
Recordings of both presentations will be made available on GKP's website.
KR
ZA