Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
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NUFC9 - agree the PSC 2nd amendment negotiations have been going on for many a year. I also remember us seeking approval for us to be able to market our own oil although not sure that is still a goer given the situation with Baghdad.
I actually think M&A could be on the table with the new CEO at the helm, we are not a million miles away from completing the 55k upgrade once that has been done decisions need to be taken around best use of excess money given that as it currently stands the ramp up to 75k isn’t approved yet. Also is it best use of money why not acquire another field as an alternative revenue stream?
Another wild card event could be the approval of a budget agreement and future oil sales. Got to be closer now than at any other time.
Like I said lots of positives to come and we haven’t heard our new CEO set out his stall yet.
Yeah and not getting very far by the looks of things. The 'second amendment' sought, amongst other things, to lower the capacity building charge and hasn't been adopted since it was discussed in 2016. The problem (for us) - I suspect - is that the KRG have more immediate issues to deal with and likely they also know that for the moment, and even more so in couple of years time, they do increasingly well out of the current agreement. And they need the money. Production beyond 55k is still quite some time away. Meanwhile they eye a swing of the R factor in their favour and eventually a swing in oil revenue from Cost Recovery to Profit Oil in which they share far more greatly. Finally then they get to realise some serious cash flow from the existing PSC (assuming current oil prices) to meet very pressing needs. A significant field investment strategy pushes the KRG further back in the queue again because of cost recovery dollars flowing to the contractors. A move beyond 55k requires a strategy with better returns for us than those likely offered by gas reinjection. We need a better PSC to make the investment sensible. But they need to get past the cost recovery period because they have very immediate cash needs. The strategies that break that sort of deadlock require multiple party cooperation and gas/power generation infrastructure investment and external FDI/financing. All in all you end up with a situation where strong incentives to move beyond 55k are lacking. The nut that needs cracking is a big one. Just my 2p.
PUTUP “ Your wild cards are, in my opinion, so remote as to be considered black swan - especially M&A. Don't expect FDP approval, for example, without a lengthy renegotiation of the PSC and for now the KRG need the cash flow the current PSC gives them.”
I’m pretty sure GKP have been in discussions for a good few years with regards to possible changes to their PSC - specifically the 2nd amendment.
And before the trolls pipe up - GKP have assured the market that these amendments are “expected to be beneficial or at least neutral to the Company”
Edit: delete my penultimate sentence. Doof.
Thanks for the list. I think your first point is largely in the bag. I expect a bit over $1m for January IF the 50:50 split of 'above $50 oil receipts' is agreed as of the beginning of the month. It would be more of a surprise if it wasn't in there IMO. Maybe we only get partial benefit for January or it commences from February 1. But at the end of the day a January component isn't material on a per share basis. I'm sure there's been a lot of discussion ahead of the forthcoming Jan payment release. I wouldn't expect your second point until the year end accounts are finalized and announced. So that's more like 2 months away. The 4th I don't think is new news at $66 oil. Your wild cards are, in my opinion, so remote as to be considered black swan - especially M&A. Don't expect FDP approval, for example, without a lengthy renegotiation of the PRC and for now the KRG need the cash flow the current PRC gives them.
Buy back commencement is the most interesting one... That would be nice.
Good to see the stock performing well alongside a strong pound sterling. We're almost back to where we got to a week ago. Steady as she goes.
Hi put-up
A few things to look forward too IMO:
- agreement on repayment plan
- dividend payment
- buyback announcements
- reinstatement of development to 55k bopd
- wild cards - FDP approval, other M&A activity
"Lots to look forward too over the coming weeks "
I'm interested in what you expecting other than the January payment RNS which can be estimated with a high degree of accuracy already?
Tbh i thought that as the start of the usual drop off yesterday when it went from 175 to 165 in seconds but looks like its pulled round, definitely think we will hear more than just a standard payment in this RNS when others have already released news of paybacks...
So with the monthly payment due to land on Friday will we get the usual drop off in share price ahead of Friday or will we keep above the 1.70 level?
Given the current oil price I am struggling to grasp that we haven’t jumped much higher already. Lots to look forward too over the coming weeks
GLA