Member Info for Boyobach

Here’s RDS against Brent and Chevron, all rebased to the start of 2018.
https://invst.ly/ugrhl
Oil is back to pre-pandemic levels and is near its best ‘average’ of the last six years - i.e. since it fell from $100. I say ‘best’ because Brent has spent much more time below $60 than above it since the end of 2014:
https://invst.ly/ugrsj
Whilst OP might spike, recent history indicates that it’s unlikely to be for long and there’ll inevitably be a sharp drop back. $60 to $65 is apparently the sweet spot and about as good as it gets, or is likely to get in the foreseeable.
So OP is not preventing the RDS sp from regaining £20 and it is interesting to note the divergence in sp between RDS and the ‘gold standard’ major Chevron. The two had performed similarly up until April 14th last year, from which point RDS plummeted sharply, with the difference today representing about £6 drop in RDS (which you can read straight off the first chart). Although that sharp divergence happened almost overnight the reasons for it had presumably been building for some time and Covid-19 simply triggered the sharp adjustment in the market assessment of RDS, which became evident shortly after the Q1 results were published. The questions for RDS investors are: What caused the divergence with Chevron, Is the change fundamental and is RDS likely to close the gap or is it now permanent?

According to the announcement made on 24th August 2017: 'Genel will receive 4.5% of Tawke gross field revenues for the five year period from 1 August 2017 to 31 July 2022(‘the Genel Override’) '
Obviously the payments were suspended for, I believe, 14 months. So that would imply the agreement could be extended until September 31st 2023 - assuming that Tawke's production is deemed to remain sufficient - unless some other settlement of the settlement is agreed. I also assume the dates refer to qualifying production, so I'd make that potentially 31 months remaining on that basis. I agree - expenditure on non-starters is just pure waste. I also think the pressure is building on Qara Dagh to perform - it's by no means a certainty is it?

Yes bunks - Nice to get the payment. Not so nice to see Taq Taq’s contribution to it, even though decline is anticipated.
It’s worth noting that the total includes a hefty proportion of cash related to KRG debt, consisting of the 2019/2020 Receivables and the previous Receivables. Together, these contributed $12.3m, about 45% of the total. Assets operated by G contributed about $3.5m, which I believe to be substantially less, if it were to continue at that level through the year, than the amount needed to cover G’s envisaged cap-ex for those assets. So, it seems fair to observe that G remains highly dependent on KRG repayment of debt which, in turn, depends upon the continued production of oil from the DNO operated Tawke/Pesh fields - basically the only net source of cash for G currently.

Who is keeping the OP 'artificially' high?

OPEC+ (but mainly KSA)

RDS is still fundamentally an O&G company with a small but growing percentage of green transitional projects and revenue streams. For the next decade or more, O&G will probably remain its prime revenue generators. For those who want to be more focussed on green development and innovation then there are more direct investment opportunities - like CWR etc. etc. My strategy is to mix and match between the fossils and the green, effectively pursuing my own investment transition as the sources of global energy shift.

Meanwhile, the sp has fallen off the five month rising trend and is only just hanging onto the 1340 support level: https://invst.ly/ufwff As discussed previously, it’s not all about OP - which is being artificially maintained above $60 in the face of low levels of demand. Unless that demand picks up I think there is every chance that RDS will revisit lower levels, with 12.50 the next most obvious area of support..

2021 is turning into a disappointing year for G, along with other oil companies.
Like majors RDS and BP, G has now slipped off the upward trend that lifted it from early November and, like them, it is starting to look precarious at its current level, having retraced from its 12 month high in March.
https://invst.ly/ufuq3
G is not helped, of course, by the continuing lack of KRG payment for February production. Having given the distinct impression that the KRG would be paying regularly for each month’s production during the following month, G set an expectation that was probably a bit optimistic given the KRG’s lamentable track record and obvious cash-flow issues. G will, it seems, always be dogged by this dependence. Here’s G v Brent over the last few years, rebased to show G relative to about 2.9xBrent (green): https://invst.ly/ufvk2

OK - another week week with frankly not much going on. Is the KRG cheque for Feb production in the post? Am I too fixated on payments? I don't think so - what sort of company might G have been today if there'd never been a missed payment and Taq Taq had been the only disaster?
So here are the usual runners and riders with G top of the KRI bunch and ahead of the US majors:
https://invst.ly/uf3ip
But, slipping below 170 in the last hour or so, brings the week to a rather sticky end with 165 now on the cards:
https://invst.ly/uf3pv
Surely things can't get as bad as last summer - when G managed more that 165 for less than two whole days?

Bald_Eagle said: ‘I also don't understand the simplistic theory that Shell's SP is linked to the price of Oil alone’.

I absolutely agree BE, so hope that you weren’t referencing my little formula, which is aimed at filtering out the ‘noise’ created by OP so that the variance (the difference between the actual sp and the theoretical one based on the formula) gives some indication of how other factors are influencing the price. Over the last couple of days, whilst OP has been around $63 I think we’ve seen the underlying strength of RDS improve by around 40p quite independently of OP.
During 2019, OP was generally below $66 but RDS was mostly above £22 - which most certainly demonstrates that the sp is influenced by other factors and the relationship with OP is neither constant nor straightforward.

‘No £20 this year…..’

It’s brutal to say Char, but when RDS dropped off a cliff last year did you just sit on your hands? No shares should be regarded as ‘buy & forget’ - they all need to be managed. If you find buying them a bit too easy and selling them a bit too hard then they are really not for you and, given the global circumstances, you can’t blame RDS or anyone else for the decline in sp and the slow recovery to previous levels. You also can’t blame RDS if you didn’t benefit from the 66% recovery rise from 900 to 1500.

Just for completeness, here are the usual bunch for this week - the line for DNO is missing due to a data glitch but the marker puts it in about the right finishing place overall. G did come out bottom again (second week in a row) :
https://invst.ly/ucavy

I think G is just undergoing the same levelling out that seems to be affecting others. I watch RDS closely and it's a similar story chartwise over there, the rising trend from November started to slacken off a fortnight ago after G touched 194 and, obviously, Brent has been a bit limp since then too. It could just be adjusting to a less steep trend or levelling off completely - early days to reach conclusions on that, although hitting 165 would remove much doubt for me. Happy Easter all!!
https://invst.ly/ucai6

I think 230 could be the top for G with existing producing resources, Mark888.
But it does tend to move within a 25-30p range in the meantime.
It's not hard to see G at 165 in the immediate future - largely dependent on OPEC+ today. OP is artificial really - Brent wouldn't fetch $63 based on current demand and normal production levels:
https://invst.ly/uc5ma

I'm guessing that payments may have slipped to a 'new' pattern, perhaps the month after the month following the month of production? Not a big deal maybe - just another year with a hole in the revenue stream. Let's hope it'll only be a month's worth this time.

Well if anything's going to test you, devnull, then G certainly will.
210 seems a fair target under current circumstances. Welcome to the club.

Well I'm not about to shift the baseline 'rule of thumb' Barrie on the basis that any divergence in sp is a measure of RDS' relative strength compared to OP - the more negative it is then the weaker RDS' performance - and it certainly dropped even further today as a chart of RDS v Brent from November indicates : https://invst.ly/ubv04 . RDS appears to be on the brink of falling off the underlying rising trend and losing contact with the 13.40 support level. There's a smidgeon of support around 1300 but not much else until 12.50. It's very disappointing performance but not unique to RDS - BP (yellow) and Chevron (blue) look much the same after the five months: https://invst.ly/ubvfk

RDS has progressively lost ground against OP over the last week, which is very evident from this 15' view of the sp v Brent over the period: https://invst.ly/ubqce
RDS is currently running about 40p down on average performance against OP this year and well below the levels it was achieving in early January.

Interesting - it shows a purposeful shift in internal focus and targets.

Since OP fell ten days ago, reaching a low near $60, it seems to have stabilised back up to around $65, with that process continuing today despite twitches downwards to $63 as positive news of the Suez canal reopening started to emerge. If OP continues to firm up at this level then I'd expect RDS to regain 1400 without too much difficulty. 15' view here: https://invst.ly/ub0tp

RDS aligning quite nicely with Brent, which remains in the driving seat for now.

I don't know if it's an error but looks lie it might be free and moving on Vessel Finder.