Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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And fully agree, GKP SP should be well over 130p and is a strong buy also IMO. Brent now has momentum and is moving up nicely, GKP is currently significantly undervalued on all fundamentals, and somehow has every possible worst case scenario plus much more priced in it's SP, I can only see big upward moves from here now.
GLA
Agree. GKP historically trades above GNL. Should be at 130p now. Strong buy.
I doubt its worth the processing and distribution system.
Gas is never usually an issue , although flaring/burning is discouraged under current ISO Environmental Regulations and API Guidelines.
What typically happens is they are given a dispensation to flare providing they submit a Gas Management Plan showing when and how the flaring will stop .
My understanding is they are in the process of negotiating this.
Surrey,
If there isn’t much gas, they can sell it on the local market. Not profitable, but a way to get rid of it.
On the AR, they mentioned investments of several hundred millions $ planed for the gas before achieving the 110 kbd. Big investments must generate much cash.
Shipping gas by road sounds a catalyst to help reach agreement on the 250k/day stalemate - as it would open up a new source for the tribals to establish a modicum of pilfering since the Oil production will be very closely monitored by SOMO (if agreement can be reached in our lifetimes).
Bravedog, that’s not necessarily the case. The Shaikan gas could be liquified and shipped by road and monetised that way. A pipeline could follow later. That is the current Sound Energy plan for their own stranded gas. But I'm not convinced GKP have enough gas , currently, to justify the expense.
There is a power station just by the SW corner of the Shaikan Block which JF has previously mentioned as being short of feedstock. They could easily clean up the gas from the Separator and feed that to the plant. Depends on the volume of course
Personally I doubt that the gas will decide any takeover. When you compare it to the massive 2P and 2C oil numbers, and the Triassic Condensate. Shaikan gas is not the key value item. A major would easily deal with it. There are plenty of Technical solutions available. But you are right , when production starts to head towards 110kbbls a day , the gas will be an issue.
Gkp is a “value trap“...at present.
Agree let’s see what comes out from the AGM though the market is not expecting much ,reflecting in SP..
I expect some movement upwards in SP but limited without positive news..
EPS and profits have been declining in the last three years and the market and us need to hear how the bod are going to reverse this....this is now the main issues..
@Armasmaximilian - relative to pre-crash prices, GENL is only 57p shy of it's 21st Feb price. Whereas GKP is 105p shy. I would say that there is wayyyy more upside to buy into/buy more of GKP now as opposed to GENL... regardless of GENL gains. Just look at the balance sheet and trust that it's a bargain at 76p right now :)
How many times have we heard that.
Well Genl up 5 percent again today
Like I have said on numerous occasions I genuinely believe GKP is the better company in terms of assets and potential going forward. The thing holding this back at the moment for me is the poor communication and management.
I good strong CEO who can communicate a powerful message adds massive value likewise a poor CEO causes the opposite effect.
Anyone who performs any financial analysis of the two companies would probably go for GKP however sentiment and trust can overide this which I think is the case here.
Like a lot of LTH we bought in here because of the asset and for that reason I hold and await a change of leadership.
GLA
@hasiba - I would argue that having the attitude of 'hoping the BoD's does something tangible in the near future to convince you to hold or you're selling' *is* attaching an emotion to your train of thought... the fear of uncertainty perhaps? Impatience maybe? At the end of the day, oil is oil... no matter which company it comes from. The demand will return in time and will continue to grow as developing nations consume more and more.. GKP *will* bounce back - but I think it's smaller market cap compared to GENL has been the dominant reason why the big money investors have overlooked GKP in these unprecedented times.
Think news of AGM tomorrow.
The comments made in AR by GKP implies that they can only grow their business if they are able to sell their gas. And their gas can only be sold when pipes and else are built. It is Genel, taken over by another NOC, that will build it.
That’s probably why Genel will go before GKP.
The market can be nearly always right in the short term ~ 3 weeks or so , but long term it is nearly always wrong.
As for using emotions for buying shares ? Spot on its asking for trouble.
I am hoping for some news at the AGM , a change in strategy and communications is desperately needed.
GLA LTH
If you believe the market is almost always right in the valuations of stocks with all due considerations factored in then it’s obvious Genel is the winner at present..
I have both in more or less equal proportions ..
Gkp needs an impetus for the market to re rate it...
Emotional attachment and Ego are disasters in buying a particular share..
Holding Gkp for short term until the bod do something tangible to convince me otherwise...
Managed are overpaid, milking the company for themselves and their mates and badly underperforming in comparison to Genl bod..
As always dyor..
Can't argue with that thought process...
Welcome, and many will be very envious of your average buy price! I am. :)
I'm new to investing, but I'm also a stickler for details. I wouldn't plough money into a company if I wasn't sure that it was a good business to buy into. I had a toss up between Genel and GKP,.. and after some fundamental analysis, GKP won between the two. They both produce roughly the same amount of oil, but the institutions have been slower to put money back into GKP than they have with Genl - and as a small retail investor, that's to my advantage. I'm confident the SP will correct it's self in a big way.. but I think patience is key. RockRose Energy is another example of the market's slow take up. Absolutely perfect balance sheet and had a market cap of just £110m when I bought in... even though they had revenue of more than twice that in Dec 19. I've seen a return of 25% since buying.. and I expect it will be significantly higher than this in the long term. I also believe this to be true of GKP.. have faith :)
Beats me...he must be mad.
Why would I sell now please explain when going forward this will be worth multiples of today’s valuation?
Then be a Wise Man and get out of this dysfunctional company.
The disparity between the share prices since the pandemic has shown everything that is wrong about the BoD of GKP in my view.
Sound like a broken record but we possess a licence for a proven massive oil field with huge reserves and low lifting costs, albeit in a questionable region but isn’t most large on land oil in questionable parts of the world.
Genel have come out with clear and concise RNS and updates, continue to provide a dividend and give the perception of a well run company.
GKP on the other hand in particular JF doesn’t instill any confidence or assurance that any deadline of objective will be achieved.
The fact is GKP has a far better asset than Genel but the key difference is how the company is being run and that is where the issue lies. Both operate in the same region have exactly the same challenges regarding payments etc but Genel get things done and GKP unfortunately don’t.
Being a long term holder and under water here I genuinely hope a change of CEO takes place with a respected heavy hitter brought in to bring back value.
JF has destroyed us and continually rewards both himself and his cronies for achieving nothing, missed deadlines, missed promises and missed opportunity.
Let’s hope GKP can play catch up soon with the price of oil approaching $40.
GLALTH