The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
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90s tomorrow anyone ?? If not tomorrow definitely next week.
Drop it to 94p then a steady rise back to 110p then another update to it drop back into the 90s.
Repeat and rinse
Lucky 7777 exactly my thoughts !!
GKP Bod even mentioned that the pipeline might not even until Q4 2024 or maybe 2025.
If it doesn't open this year then might aswell wait until Iraq’s pipeline contract expires.
Maybe that is the plan and Brazani can carry robbing his people $300m amonth for another 18 months.
It definitely seems how this is playing out.
Will local sales prices drop further 🤔. Another 18 months for gkp to generate $$110m in cash I suppose with a share price dwelling between 90p and 120p .
"No double counting, if that point in the future when invoicing for an already invoiced but unpaid cost becomes necessary, it could simply be deducted from the past unpaid invoice(s) "
Sure. But rather than modeling the unadjusted CRP and no arrears I prefer to accrue credit for the arrears which comprise cost oil AND profit oil and then add the adjusted CRP value. Doesn't matter which way you do it so long as you don't double up on both 79% of the arrears which is CRP recovery. That would be a significant mistake.
Today's report states that Licence Expiry is 2043 (Shaikan Field Estimated Reserves section) - this is incorrect.
A. Shaikan was declared a Commercial Discovery on 1st Aug-2012 and the Contract Term is for 20 years from commercial discovery; that means end-of-term is End-July-2032 (PSC Clause 6.10 refers).
B. There is an “automatic right”, however, to a 5-year extension which would then take it to End-July-2037 (it’s my presumption that this “right” will still have to be requested or demanded).
C. There is another possible extension, of an additional 5 years, which can be requested at the end of the 20+5 year period (1st Aug-2037) and, IF requested and granted, the contract would then finally end End-July-2042. Note that this particular request has to be made at least six (6) months before end of the development period.
March-2024 Aug-2032 Aug-2037 How time flies...
£1.65. Plenty of upside then, strong buy, imo will keep adding as funds arrive
If the unpaid invoices had been paid - what would we have spent it on anyway ?
We have no debt to offset against.
Perhaps the BoD could have awarded themselves some bonus payments for having seen us safely thro’ Covid, and paying down our debt for us ??
If I were anything other than a simple share trader I’d be interested in all this CRaP 🫶
"And don't double count the arrears and the CRP as most of the arrears is CRP."
No double counting, if that point in the future when invoicing for an already invoiced but unpaid cost becomes necessary, it could simply be deducted from the past unpaid invoice(s)
Best Regards ValueS
GKP/MOL can never recover more costs than have been incurred. But they get a very slight offsetting advantage via the R Factor not rising so much until, of course, the arrears are paid. But this is trivial versus not being paid. So always model the CRP net of invoices else you risk double counting the CRP and arrears which are mostly CRP.
ValueS - to clarify, by "no" I meant no the R Factor would not be higher than 1.18. The R Factor is not rising because we haven't been paid the massive arrears but that is separate from working out what costs can be invoiced. Model each separately. And don't double count the arrears and the CRP as most of the arrears is CRP.
Why would you open pipe line officially and pay more for the oil when you can get it for 25 dollars a barrel. that the bit that concerns me
So, the unpaid invoice cannot be included in the total payments, understood. But the costs that are invoiced has to be deducted from the cost pool!
Marvellous!
Seplat. The GROSS CRP as of Dec 31 was $224 million. GKP's share was 80% $179 million. The current enterprise value of GKP is $228 million. (SP 106.7p, ex rate 1.274, FD shares o/s 230.9). So one might say the CRP is 78% of GKP's current enterprise value.
"No. The R Factor is based on actual costs incurred and actual receipts."
No. The R Factor is based on actual costs incurred and actual receipts. So if we aren't being paid the arrears, but still incurring costs, the R factor will fall (or not rise). This will help current invoices marginally. 1.18 was exactly what I have in my model. But the cost pool still can't be invoiced twice.
I appreciate you helping PUTUP with his lacking mathematical skills. Bless
"So model the CRP net of the receivables to estimate future invoices."
If that is the case then the R factor would be higher than 1.18! And all invoices after an unpaid invoice would be wrong!
The R Factor is calculated as a ratio of total payments to cumulative costs. I.e. to what actually happened regardless of whether invoices get paid or not.
Best Regards ValueS
"Cost recovery pool is now at 120% of current enterprise value 🤑💵 "
LOL someone struggles with mathematics
Yes. But can't be double-counted in valuation and can't be invoiced twice. So model the CRP net of the receivables to estimate future invoices. Very important re: Note slide 8 "cost recovery pool supportive of cash flows"
Cost recovery pool is now at 120% of current enterprise value 🤑💵
If Brent continues to trade around $90/bbl I wouldn't be surprised if GKP could negotiate its selling price up to $33/bbl. Operating leverage is exceptional coming from low levels, and it would elevate yearly free cash flow from $60m to $90m.🚀
Never retesting 90p again.
"Gross. Of which $153 million has already been invoiced"
But remain unpaid. Hence, they are still in the pool...awaiting payment!
"3) Cost Recovery Pool = $224 m!! 🤑 "
Gross. Of which $153 million has already been invoiced in the past due invoices. Pro forma net CRP to GKP at end December 2023 $57 million (19p per share)
Please keep the noise down until April...
Cheers,
On slide 19 these important parameters are given (as of 31/12/2023) :
1) R factor = 1.18
2) Contractor share of profit = 27.3%
3) Cost Recovery Pool = $224 m!! 🤑
Best Regards ValueS
Shares approaching flat post conference call. Good sign!