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IMO it would be foolish to commit to any cash return at the moment.
We don't know what the final situation will be re implementation of the next phase of SH devlopment (we cannot just assume it will be as per the previously advised development as there is now a new top dog runnibg the show), nor do we know what development pressure will be exerted re the Gas Management Plan, nor do we know just what volumes of SH crude will be allowed into the export pipeline and thus gaining a much better $/bbl, nor do we know the outcome of the revised CO and PO determinations.
I would say that every penny should be retained to help cover these issues.
Surely the last thing we would want is another Share- or Bond Issue to cover urgently needed Capex requirements forced upon us by SOMO?
Management are doing what they can. Unfortunately SOMO and ICG have yet to engage with them on a serious basis. They are carrying excessive cash in light of current cash generation and balances. They should return that excess to shareholders via a buyback. That be my view. While I would have preferred them to act when the stock was below £1, I'm happy to increase my relative stake, without deploying additional personal cash resources, at these levels. If management are confident, they should do it. If they don't, that says a lot about their confidence.
Unfortunately 'moping' at home.
Just back from two weeks in Dubai and about to go out again to southern Europe, seeking the sun.
Because I'm a narcissist.
Do it a lot. And as a Brit, which I am, you should understand my need.
Anyhow, my larger point was about the Board and the way it's conducting its affairs right now.
Because that's about shareholder confidence in their direction of travel.
And no, it's not just about whether they should squander precious cash resources in rewarding loyalty...it's also about where they go from here.
Got a view?
Straycat, I don't think the non-executive Board have had much to consider of late. Twiddling their thumbs the lot of them. Management, however, is doing a very good job of controlling costs and managing to eke out a little free cash flow. Well done management and operations staff. That's entirely obvious. Considering the severity of the situation (to belittle it is totally disingenuous) they are doing what they can. Discussions with SOMO re contracts and FDP remain ahead. Let's see how they do. The Board are hardly heading anywhere at the moment.
The fact that local sales are the only thing keeping the lights on will not be lost to SOMO/ICG. If they move to halt those then it really will mean they want to go nuclear... It won't matter whether there's $86 million in cash or $50 million in that case.
So your single point is that you don't want the company to distribute any cash. Ok. I disagree. Was that it?
The weather? Much more pleasant than London earlier in the week. A nice time in the sunshine. Current temp about double London's. The beach looks very inviting... How about you? Traveling as well or moping around home?
Any buyback or dividend should wait until the contract picture is completely clear as well as a plan agreed to past unpaid invoices, in my opinion. Personally I am not in favour of buybacks.
Retain all the cash and keep belt well and truly tight.
Besides, local sales are not guaranteed to remain at current reported levels and we cannot be certain of the pipeline re-opening any time soon. (I was completely wrong last year suggesting that the closure would be temporary).
Actually I would prefer that the company diversifies the business, but that is another topic for discussion perhaps.
'Were there questions in your ramble?'
What the f*ck's wrong with you?
I was opening a discussion about whether the Board were /are heading in the right direction.
And I'm interested on other bbs' opinions.
Don't like that do you?
ValueS may be supportive, but the rest of us just need to get to grips with our current environment...and looking for an informed debate.
In my view, capital returns to shareholders would be plain stupid right now given the current position GKP finds itself in.
I note you posted your opinion at 23.09 last night...what's the weather like in the US right now?
Straycat, thoughts on what exactly? Were there questions in your ramble?
"Oh yes, and we’re sat on an oil field with a twenty eight year expiration date." Well, this bit is wrong but that's been pointed out already.
Your item 6 is where a big chunk of value rests / is at risk. It's a particularly big chunk because it contains a lot of cost recovery.
Re 7, yes, they will consider investment (as opposed to the current minimal maintenance capex) when/if things (contracts, arrears, exports) are resolved to their satisfaction. Not before. "these are choices GKP will make whatever the ICG think or say." A Field Development Plan requires an agreed contract (particularly with respect to cost recovery). Both go hand in hand. The level of cost recovery in the contract scopes the size of the FDP that can be agreed. If the discussions, when they start in earnest, break down fundamentally (e.g. low cost recovery envelope in the contract and large FDP expected) then we are really in trouble. Sure, we have no debt. But we do have a current equity value to lose. What would that be worth if there was complete and utter disagreement with our employer? If you've no business then the existence or not of debt doesn't matter that much.
So, as I've said before, everything is at stake. Luckily, we are still likely best-placed to develop our field (just as the other APIKUR members are with respect to their fields) and so replacing us isn't a sensible option for SOMO/Iraq...although it doesn't have a zero probability should discussions get protracted and ugly.
Absolutely agree with ValueS. They should return half via a buyback.
If YOU were running GKP right now, the very last thing you'd be doing is returning capital to shareholders..
GKP have some difficult terrain to traverse.
And giving up cash to shareholders right now would be a derogation of duty.
Cash conservation in the current climate is king.
Cash amounts to survival and eventual growth, pending decisions outside of GKP's control or remit.
Either way, as shareholders we need to understand its value in the Balance Sheet right now.
You play what's in front of you.
And what's in front of us is change.
We just need to accommodate that proposition without being afraid.
What does it matter what we think they should be doing. The BoD won't be reading this board, that's for sure.
Imo, they should husband the resources/cash until the way ahead becomes clear.
The IOCs are just pawns on a political chessboard, as I am sure the BoD are uncomfortably aware.
It's not sitting there doing nothing if there's another political shift and local sales are curtailed, so prudent to have a war chest, but I agree it would be nice if some of the surplus came shareholders way💰
"Are the Board behaving in shareholders' best interests..."
If the board returns excess cash to the shareholders, then yes! There is no need to keep $86 m + sitting in the bank doing nothing. This is the shareholders money, and I am sure they'll find better use for it.
Best Regards ValueS
Thanks for sharing this, good afternoon.
This for me is the most relevant thing for us to be hearing right now re: arriving at the new settled normal, and gives me grounds to be cautiously optimistic. If the translation is correct, APIKUR have had a meeting - I do wish more context would have been given (I.e. when, after Ergodan?) But also appreciate we shouldn't expect a blow by blow account.
I am encouraged that APIKUR are being included and recognized (my fear was FGI might play hardball and seek to delegitimise them by omission/ignoring, especially after latest FGR comments abo8lut APIKUR "meddling in internal affairs" etc).
Reference to a "coalition" seems ambiguous, might allude to political factions and a coalition of the willing...
I think it is positive. Things are happening in areas which are most relevant to pushing things forward towards the new normal: APIKUR/IOCs/FGI/KRG.
The GKP fundamentals are attractive and remained unchanged (at least to me). Whichever way the PSC falls/is interpreted, I still think there is sufficient time for GKP to realise value - pipeline or not. Market doesn't seem willing to value this below a quid at least for now.
Waiting for AKIPUR update and the all-important GKP RNS...
Wishing you all, all the best.
So we can all assume the pipeline didn't open today ?? Why do people post garbage and get people's hope up !!
Only 17 months to go
You're squealing like a stuck pig, skewered by your own inability to address the key question of whether the Board is behaving responsibly given the current commercial climate.
jjj is right, but it's gong to be a bb of one.
I'm only interested in the larger debate.
Are the Board behaving in shareholders' best interests...
You two need your own board.
Give us your reasons for not believing.
If you do not believe that the contract ends in 2037 as stated in the published PSC (with, as I have detailed in my posting, the possibility of requesting an additional 5-year extension), why on earth should anyone even attempt to start an informed debate with you?
I specifically asked for 'Thoughts?' on my take on the Board's position, as I see it.
You clearly have no thoughts on the matter.
Terrific contribution to a live time issue which will inevitably have an influence on current and future GKP valuation...well done.
The missing "r" was purely a typing mistake.
If you do have the PSC, are you then saying you don't believe what it says?
As far as I can see there is no current debate about the "Board's position in the context of current issues".
First of all, the 'name' is Straycat', not Stracat'.
Second of all, what are you talking about?
Who said I don't have details of the PSC?
Third of all, get involved in the debate about the Board's position in the context of current issues.
That is the point of my original post.
Stracat,
I don't mean to obfuscate, but it seems important to define one of the main contract parameters.
The other main contract parameters (CO and PO determinations) are being jiggled as we speak.
I will post up my thoughts on these matters quite soon.
Why don't you have the PSC? - I downloaded it from the MNR website as soon as it was posted there (had to screen capture every single page due to the manner in which it was presented at the time).
BB,
You're not arguing the main point are you?
Just obfuscating.
So let's say you're right and the contract ends in 2038 (and I don't believe that to be the case)...so what?
Argue the point For Flip's Sake!!!
Other language is available if required...
Straycat,
GKP's PSC expires in 13 years (2012 + 20 + 5 - 24)
To obtain another 5-year extension, to 2042, the company has to put in a REQUEST six months before end of period.
There is absolutely NO guarantee that said request will be granted - it might not even be wanted, who knows?
Your "28 year expiration date" remark is disingenuous...
Can we please do a little analysis in the context of Board responsibility?
As per the FYR and JH’s summary of ITP closure:-
1) ‘…we suspended the ordinary annual dividend’;
2) Ref capex and costs; ‘…with our aggregate run rate expected to remain at or below $6 million in 2024’;
3) Sales resumed in July by trucking to local markets;
4) Sales tracking at 43k bopd @$25 currently;
5) ‘At current local sales levels we are cash generative, with our current low gross production breakeven of c.22,000 bopd providing downside protection’;
6) ‘…GKP is currently owed $151 million net’ (although I reckon that delinquent debt will potentially be compromised for the greater good! N.B. hope I’m wrong);
7) ‘With the resumption of exports and the normalisation of payments, we would consider incremental investments to realise Shaikan’s potential.’;
The key words there are ‘consider’ and ‘incremental’.
And that’s JH’s negotiating position, i.e. these are choices GKP will make whatever the ICG think or say.
Otherwise known as make your mind up because we’ve got shareholders to consider.
Because we’re debt free!!!!
People without money (aka the rest of the APIKUR members) will always be susceptible to financial intimidation.
But not GKP.
Oh yes, and we’re sat on an oil field with a twenty eight year expiration date.
GKP will end up negotiating its own outcome, and I’m good with that.
Thoughts?
Nice to get back into the £1.20,s