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There’s no smoke without fire and them hinting at external financing basically is saying that a fundraise is coming.
Why would they need a fundraise??, they are not spending any large CAPEX, in fact costs are being reduced, and current sales are more than adequate to cover overheads,
the only reason BOD would raise money is to pay themeselves their full wage entitlement, imo or Pay out Dividends??, but that would not make sense
That would make absolutely zero sense when they have 80 million dollars and local sales are successful and what would they fundraise for anyway
The only reason anybody would do that would be if we were in debt we have no debt
So why did they mention external financing then.
It’s so there’s no massive shock when the placing rns hits our screens
If you're looking to get out, it would make sense if you talked the share price up, as you doom and gloom it, it makes more sense that you want the price to be lower, or maybe you are another misery loves company FUD let's have an argument you will see I'm right poster (surely not). They have finance options in place, there's no need for a share issue 💤💤💤
JAdams
I’m not sure if you read the RNS correctly or you’re able to interpret what they were trying to communicate. The mention of external financing was the last on the list of options to retain liquidity. Only if: local sales, cost reductions and inventory sales have failed will they look to bolster the balance sheet with external finance. They were quite clear that: there is demand for Shaikan crude and current sales volumes are adequately coving costs. That alone will keep the wolves from the door but, with active austerity, the potential to increase sales and $80 million cash at bank, they have no requirement to go cap in hand to anyone at this time or anytime soon. The phrase is there because they want to be seen to be in control of a going concern, if it’s needed, it’s an option. Right now it isn’t.
It has already been clearly stated that SOMO will be responsible for the future sale and marketing of Kurdish crude, and NOCo will be responsible for the further technical development of the Kurdish fields – knitting them in with the future development of all Iraq O&G fields. NOCo will, of course, take local advice and knowledge into account in any KRI field development planning.
The point being, there is currently NO leaked overview of what such NOCo:KRI field development plans might include.
Until we have such knowldge It is foolish in the extreme to assume that any of the smaller independents have enough cash (or will have enough generated by local sales at silly prices) to deal with such unknown capital committments / Capex demands.
The fact that the possibility of a further capital raising was even mentioned is an indication that this is of major concern to the companies.
It should be of concern that the possibility of 3 or 4 operators going to the capital markets, yet again and all within a similar timeframe (and following such a value-destroying period) would be seen in a very negative light by the debt market.
4 might become 2…
Putup are you sure you are invested in GKP. All your commentary has a negative slant which suggests you are not a holder.
In the presentation the Board did not talk about placing. They mentioned that there was an extreme risk in the event that all local sales were stopped and and in that event they would reduce capital spending to increase capital by up to 2ml. So BB comments are scaremongering and have not been supported by Board comments. With 80m in cash there is virtually no risk. More to the point is whether BoD will pay KRG given they are owed 150m. Based on comments it seems likely they will not be paying KRG as they are being paid cash in hand and have little obligation to pay. KRG have not said they are challenging this and are fearful of a UK court case.
...and these words will come back to haunt you: "...Have not been supported by Board comments. With 80m in cash there is virtually no risk."
You need to open your eyes
As a non investor why is BB so concerned? What motivates to write when have nothing to hold or buy? Very dubious agenda?
"Putup are you sure you are invested in GKP. All your commentary has a negative slant which suggests you are not a holder."
Yes. No it doesn't. I simply prefer to deal in grounded analysis rather than ramping. How many shares do you own?
If you hold then you must believe in a positive outcome. What is that positive outcome?
Good evening BroadfordBay.
Hope you are well, I do find there is still a handful of very touchy investors who only like to read sugar coated posts.
I suppose a few of us have a little more experience and understanding of looking at all possible outcomes and when it comes to GKP/location/politics etc there is shed loads to think about.
I see my prediction of low 90's / 80's became quickly real with little hope of any turnaround any time soon.
I don't know if you agree or not but the frustrating thing is Gulf could become a good investment if everything is sorted out favourably, but and a big but the political landscape needs wholesale changes with trust driving an new era for all concerned, there lies the issue..........or the main one!
What ever happened to Tony?
I hope for a positive outcome. Faith has nothing to do with it. What a dumb ar$e question. How many shares do you own?
Why is asking 'what is the positive' outcome a dumb question? If your claimed investment is based on deep analysis then there must be a positive outcome. Why can't you state what that is?
FH1's assessment is absolutely correct.
Right now there is no prospect of more funding need to support current performance.
Just run the numbers.
And if that changes, it would demand a catastrophic adjustment in trading circumstances on the ground.
In simple Balance Sheet terms, the current position is stabilised for now.
No problem.
And trucking up to 40k bopd is only going to develop GKP's stability.
So here's the thing.
As a Board, they simply have to play what's in front of them.
I feel like I'm banging a drum because I keep repeating the same mantra.
But we should take it easy for now and trust in the Board to keep their nerve and develop their current position.
Guys like PUTUP are in danger of panicking; he doesn't get that the oil will flow.
One thing's for sure. The oil will flow.
And if you have confidence in the Board, they will manage it on our behalf.
Particularly since they're now financially invested by their 20% salary deferments...
Tough times, but as I say, the oil will definitely flow.
Just a reminder the title of the post is 'Placing in a Couple Weeks'. This is nonsense and have to question motives behind making this post.
Some posters seem to be in a permanent state of panic. So have to question their motives.
Always worth remembering that all these online boards have their fair share of shills, rampers and de-rampers. It is a fact.
Good morning Cookie, nice to hear from you, I trust you are well?
I do agree that GKP could return to being a good investment - once most (all?) of the outstanding issues have been resolved. The Heavy Crude / Sulphur issue is known, can be priced, and taken off the slate but my penultimate point below cannot be discounted. The big “political” issue IMO is the (forced) return of the KRI to being a semi-autonomous region of Iraq – and the end of its “we’re a separate country” mindset; a lot of water has still to flow under that particular bridge before the dust settles.
Leaving aside the unresolved issue of the export pipeline(s), some other BIG IFs remain, including:
- the proposed commonization of O&G extraction contracts throughout Iraq (TSC vs PSc vs RSC). Issues here are potential $/bbl revenue per stb produced (what we see as Profit Oil) AND rate of return of invested capital (i.e. Cost Oil).
- the agreement with a new managing partner (NOCo) on how the KRI O&G fields are to be developed. The long-outstanding SH FDP is toast by now, and the masterplan for the KRI is still not yet fully developed, so that implies greater uncertainty for longer.
- depending on just what sort of FDPs are eventually agreed with the 4 larger local operators (DNO, HKN, GKP, SNM) the financial mountain to be climbed is still to be quantified. Lots of cash may be required and that cash cannot be generated by local sales; if crude $/bbl remains high you can breath easily, but if crude prices were to have a hissy fit you would be rather short of breath. How would capital markets view the risk profile bearing the mind the non-payment issues of the last 12 months?
- the pressure on OilCos to deal with their gas issues, greatly reduce flaring and utilize that valuable commodity (capital intensive).
There are a LOT of variables being discussed, especially around point #3, one of which involves removing the SH heavy crude from the mix and developing a separate strategy for that. Early days yet, but drawn-out uncertainty too.
You asked about Tony – he’s well but has had his fill of the abuse these bb’s bring so he has more or less withdrawn from the bbs, as have Ren and some of the others who were able to bring valuable insights. Schade. The network, however, still functions well.
Best regards.
The fact that the possibility of a further capital raising was even mentioned is an indication that this is of major concern to the companies.
I would suggest that the Company is not going to entertain a Capital Raise while the pipeline is closed, and who would lend any money to a Company who have no access to an International Market
we will just tick along holding current cash and drip feeding revenue from current sales which cover on going Production and staff costs,
ill be adding a few more next week while its in the low 90,s or high 80,s , think by the end of the year we will be in a much better position, DYOR
4 might become 2…
Thats my thought process, it would make sense, to create a much larger entity create a Company with a Market Cap 500-£1Billion Company over the next year, reduced Management overheads would strip out a large chunk of ongoing expenditure , The Directors wont want to doo it, BUT THEY SHOULD!!!!, imo
"Guys like PUTUP are in danger of panicking; he doesn't get that the oil will flow."
Nah but I'm very cognisant of the risks here which are far greater than at any other time since I've focused on this name.
"One thing's for sure. The oil will flow."
Very likely yes. It isn't at all assured, however, that it will flow for GKP in its present form. We hope the challenges the company face will be resolved favourably but nothing is assured. If we are lucky export sales will restart before year end but I wouldn't at all be surprised if this situation drags on into 2024. How many here thought in March that it was going to be resolved in just a few weeks?
"Particularly since they're now financially invested by their 20% salary deferments... "
That's been the case since June! Why do you keep behaving as if this is something 'new'?
Personally I do not expect a placing in the next couple of weeks. So I'd personally place a next to zero probability on that. However, if local sales stutter and the pipeline remains closed it's a real possibility. Hopefully it doesn't come to that. The company was right not state the obvious risk however.
" Why is asking 'what is the positive' outcome a dumb question?"
Because the answer is obvious and you're just being a d!ck. And I've yet to se you produce any sort of contribution of value to this board. Perhaps you are a paid ramper that doesn't actually own. You seem to forget where my moniker came from: in 2020 "put up or shut up" when everyone was crying that the sky is falling and it was time to buy. I did and it has paid off handsomely.
*The company was right to state the obvious risk however