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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
Sudanese adviser says oil exports through via Ceyhan will resume soon. A coalition has been formed between Erbil & Baghdad. Both sides are close to an agreement...
APIKUR, "A meeting has been held on the issue, we are waiting for the next meeting to determine when to resume oil exports."
https://twitter.com/john78846295/status/1785407339102675412?s=19
Tomorrow going to be spicy.
Where have you come from Alex, because you're right on my page!
Run the numbers at 50k bopd, or more significantly at 90k bopd, all self-funded, and the debate about delinquent debt disappears into the larger commercial ether. Recovering $151m should happen...obviously.
But it is irrelevant in the greater scheme of things. Simply petty cash.
And as for the revised PSC, which will inevitably happen now, it just needs to be managed by the Board to make sure that it suits us humble shareholders.
The Golden chalice is self funded growth.
But it will obviously be a decision taken at GKP level.
Not by a strange amalgam of APIKUR artificial construct, with their own disparate financial needs.
And don't get me started on Myles, their nominated negotiator.
Here's my back-of-the-envelope numbers on GKP: https://i.imgur.com/IMf1kt5.png
Numbers are based on:
- ITP closed the entire 2024, and exports open in 2025.
- Not reaching the level of production in 2024 nor 2025 that GKP indeed reached in March 2023 (+55k bop/d)
- Brent at $80 (almost $90 now)
- Receivables not repaid (amounts to 70% of entire enterprise value of repaid)
Probably looking at 50-70% dividend yield on current share price in a reopening scenario, mirroring historical payouts.
Front-running Putup and Broad: my numbers are _below_ analyst consensus i.e. I've used an additional margin of safety. I've talked to two analysts and no one have it below $200m net profit if exports are open i.e. +60% of market cap.
(Yes, I know cost pool is coming down - but it's still hard to envision anything substantially below the aforementioned numbers the coming years).
Both of you are obviously knowledgeable, but you're also very reluctant to state what you actually forecast yourselves.
I'd say the board would be very humble to learn your numbers in a reopening scenario, and I hope you guys go out of your comfort-zone on this topic. Cheers.
Do our American brethren know of some news?
Creeping up again, 120????, anytime soon, imo
Does seem like Iraq is moving much more towards fundamentalism, with new laws proclaimed which would by western standards seem an outrage and would cause uproar if introduced here.
https://www.reuters.com/world/middle-east/iraq-criminalises-same-sex-relationships-with-maximum-15-years-prison-2024-04-27/
Bit of a shame as it makes it harder to do business with them. Its been frowned on in many Arab countries for years but fallen short of imprisonment.
Or simply look at the company’s own disclosure, published on its website, included in the 2016 prospectus, specifically under section 13.2 on pg 175. People here would do well to read also the paragraphs that follow relating to FDP, work approvals and budget submissions that the contractor is obliged to do.
C+++*eye,
PSC was signed & dated 6th Nov 2007. Shaikan was declared a Commercial Discovery on 1st Aug-2012
As taken from the published PSC in front of me:
Development Period
6.10 If the CONTRACTOR considers that a Discovery of Crude Oil and any Associated Natural Gas is a Commercial Discovery, the CONTRACTOR shall have the exclusive rights to develop and produce such Commercial Discovery, pursuant to the terms of this Contract. The Development Period for a Commercial Discovery of Crude Oil and any Associated Natural Gas shall be twenty (20) years commencing on the declaration of such Commercial Discovery by CONTRACTOR, in accordance with Article 12.6(a), with an automatic right to a five (5) year extension.
6.11 (Refers to discovery of Non-Associated Natural Gas )
6.12 If Commercial Production from a Production Area is still possible at the end of its Development Period as defined in Article 6.10 or 6.11 then upon request, the CONTRACTOR shall be entitled to an extension of such Development Period under the same terms as those provided in this Contract. Such request shall be made in writing by the CONTRACTOR at least six (6) Months before the end of the said Development Period.
The terms of such extension of the Development Period shall be:
(a) Five (5) years for Crude Oil and any Associated Natural Gas, and/or
(b) Five (5) years for Non-Associated Natural Gas
Https:// youtu. be/wD1wJcvy5iY?si=0wsnGch23_14Qh1w
A look at current Iraqi economic situation and suggestion of oil flow beginning of May.
Truthsayer, to answer your question I went to the 2016 CPR. A most incoherent, if not shady, document, that too doesn't make it clear.
It repeats details on the WI but one would think the framework of the PSC itself, with its duration would be paramount within it and its introduction, but in true GKP form, it isn't.
I saw the below info on page 9, which I have to say surprised me by 8 years, as I estimated the PSC expiring, even with the inclusive of the automatic 5 year extension option included to be circa 2035...
'Notes
1) "Gross Field Technically Recoverable Volumes" are 100% of the volumes estimated to be recoverable from
the fields without any economic cut-off being applied after expiry of the PSC licence on 30 June 2043.
2) The volumes reported here are unrisked in that they have not been multiplied by a chance of development'
I thought it ran from 2010 for 20 years, with the automatic 5 year option, so 2035 minimum.
2043 would be even better. I think. lol
https://www.gulfkeystone.com/wp-content/uploads/2019/12/erce_gkp_cpr_2016-08-26.pdf
You’re not the only one that expected the announcement of an agreement during the Erdogan visit, I suppose they’re still negotiating the financial terms of an oil export agreement and how much water Turkey will allow to flow into Iraq.
Sadly as demonstrated by their use of an Iranian weapon to attack Kurdish gas production the very highly placed Iranian influenced politicians in Iraq will not allow the pipeline to open unless they gain full control of Kurdistan’s oil and therefore their only significant income, including their ability to finance a fighting force that supports U.S. interests in the region. Now we can only hope that Kurdistan still has some good cards to play and an agreement will come in time. In the meantime it seems that profits on what they call ‘local sales’ will allow GKP to build a cash reserve that might, if it becomes large enough, allow reasonable dividends to be paid. At that point the shares might be revalued upwards even if the pipeline remains shut.
Personally I’m on ‘hold,’ although if Itsaponze predictions of 90p are right for once I’ll probably change my position to ‘buy’ that said his record in terms of predictions has been useless to date.
Patience Required
Hi Eurwyn,
None planned currently until either owed payments come or guaranteed exports start, best case 6 month, worst about 2 years when new export contract agreed , buts thats with a fair wind.
Can anyone give me a heads up on when the next Dividend payment will be?
It's really odd, that after Erdoğan visit, Israel-Iran tension and some attack on gas fields nothing really happened with SP. I was expecting some sort of breakthrough during his visit there, but we are still in the limbo. I have no idea what we are waiting for now. Any ideas?
So, 17months more of lame duck excuses, lies, promises, and interminable biscuit meetings going nowhere.
The Master Plan is obviously to delay things at every turn, then to break Barzanistan way from Baghdad, see off us troublesome little IOCs - and take over the lot of us ?
Bar-z boys and their tribal mates the Erdogans will magically agree to open the taps…. and serious wealth with flow to both famillies.
Feeling a bit used and abused.
Why is there not a ask or bid price for the share this morning??
Imapussi
It's Barzani dear Boy, do keep up.
Idiot.
I'm asking about the contract to take out oil
The PSC not the pipeline.
Not that long ! 17 months will fly by and good bye iraq forever, its the only way for the future of kurdistan.
And the Brazani family making $300m a month of the IOCs.
Who really wants SOMO contacts definitely not the KRG.
Not years its months, believe pipeline contract expires in 15 months or so but have asked our company for more information on this for accuracy.
In other words how many years do baghdad have to wait before the contract expires anyway