Member Info for Boyobach

Nice to see the short-term trend continue this morning - it's clearer on this 15' view
https://invst.ly/s4ucr

At least there are signs of it pulling upwards from 115 rather than the opposite bunks - a positive indication for LT holders.
https://invst.ly/s4kmc
Everything 'oil' seemed to take a tumble just before 13.00 today.

Ultimately G followed the herd - & OP - since Friday's close:
https://invst.ly/s4kg6
Treading water basically.

......which Simply Wall St put at around 50% down in June,

Leem: ‘If they are not making money why do people want the shares so badly?’.....

I’m not sure that people want the share as badly as all that. Today’s price just puts G back to its ‘average’ long-term performance v Brent. Meanwhile, GKP’s product, vulnerabilities and prospects are different - don’t forget these when looking at the respective performance of the two companies.

This Simply Wall St article from June might help explain G’s sp to some extent,
bearing in mind the risks they identify - which reflect some issues we often discuss here: https://simplywall.st/news/is-genel-energy-longenl-using-too-much-debt/

Ultimately G’s sp hinges on confidence in the company’s guidance, the ability of the KRG to deliver on its commitments and the eventual recovery of OP to $50+ levels.
Energy - whether it is oil, gas or electricity generation - are essential issues in Iraq - not just in the KRI. G is a key component in that and can play an important future role as the energy picture in KRI develops. Even in the face of sub $50 oil, the company would be well placed today were it not for the KRG’s failure at critical points to consistently adhere to payments. This remains a fundamental problem for the company and its investors and is, in my opinion, why the sp is below ‘fair value’ - which Simply Wall St put at around 50% in June, implying the sp could otherwise be somewhere above 200p today.

It is good to see these aspects of G's activities reported - Sustainability and Community support are essential elements for a company such as G operating in the KRI.

G fell ahead of OP about three weeks ago, pushing the sp ratio to Brent below 3x (the long term average is 3.15x) . Today's price action has substantially restored the average relationship: https://invst.ly/s4dis

Just going back to the article (link below) that Leem posted about Baghdad’s attempts to establish oil quotas upon KRG for delivery to SOMO (for Iraqi budget compliance) and production cuts (for Iraqi compliance with OPEC), which sometimes trigger scare stories of this kind :

G and others have binding PSC’s with the KRG which determines what they are paid based on the price the KRG obtains for their oil. What the KRG does with the oil next - exporting it or transferring it to SOMO is somewhat immaterial provided that the oil is assigned an appropriate value relative to the market for the purpose of calculating the contracted payments to IOC's. As an absolute minimum this should be based on the equivalent grade being exported by SOMO from Ceyhan - ie the oil actually supplied! This contracted process would not require Baghdad’s approval or involvement.

Regarding compliance with OPEC cuts, it would make sense to cut the least profitable oil production and types. I wonder whether oil exported via the Mediterranean would generally get a better price than that exported via the Gulf? I also wonder where this would place the heavier oil produced at Shaikan vs Tawke if cuts were appropriately targeted. It therefore remains unclear to me what, if any, impact OPEC cuts might have upon G. It would certainly be rash to apply a blanket pro-rata cut on each and every Iraqi producer.
https://www.upstreamonline.com/finance/kurdistan-operators-brace-for-more-financial-misery-over-output-curbs-pressure/2-1-872580

Because of the huge inventory of drilled but uncompleted wells (DUCs) in the US, fracking recovery is underway and will continue to supply the market and suppress OP well into 2021:

https://oilprice.com/Energy/Crude-Oil/US-Shale-Recovery-Leans-On-Huge-Inventory-Of-DUCs.html?ocid=uxbndlbing

Well there’s no denying G ending the week on a flourish: hitting 120.55 before closing the week at 119, putting G at the top of this week’s leaderboard and at its strongest v Brent for over three weeks:
https://invst.ly/s3lim
The refinancing RNS was obviously well received and G may even be back on a positive trend, although that’s a seriously optimistic reading of the runes:
https://invst.ly/s3ljz

Yes bunks - an interesting and positive RNS.
' The Company maintains a positive outlook, a strategy of maintaining a robust balance sheet through cycles, and is proactively managing its liquidity runway and debt maturity profile.'

Newspaper Eliminates Articles but Retains Headlines…...Origami Experts Predict that Paper Will Fold….Shell To £45.00 By EOY ….GLA

Will need to crack 580 first.
https://invst.ly/s369c

There's nothing new, Leem, in that article regarding Baghdad v Erbil and the Iraqi budget and Oil production quotas:
Iraq isn't complying with OPEC+ and ICG cites lack of control over KRI as an excuse - yet have they proportionately cut production elsewhere?
ICG don't pay the full budget allocation to KRG forcing KRG to sell oil directly giving Baghdad an excuse not to pay full budget - a circle that neither is capable of breaking...
The bottom line is this - no global recovery then no G recovery.

Yes, bunks.
I don't pretend to understand fully, but I assume they'd have to show the relevant AT (an 'Ordinary Cross at same price' - like yesterday's first trade - shouldn't qualify, as I understand it, because it's a transfer made outside the market).

Support gone, Leem?
I hope you didn't misunderstand anything I said about 115 in the last day or two: those comments were based on very 'long term', 5 year, views (like I just posted) - where, +/- 5p would be within the range of those comments.

Well today was a pleasant surprise: OP sees a recovery of sorts and G was popping this afternoon (has Hasiba stopped selling yet?):
https://invst.ly/s2nle

This article expands on the mixed messages re OP, best read for amusement as no-one seems to know what’s around the corner (situation normal): https://uk.investing.com/analysis/will-oil-bears-take-crude-below-35-200446412

Here’s a taste of it: The wheels finally came off the market last week when OPEC kingpin, Saudi Arabia cut the selling price of its oil, ostensibly to preserve or widen its market share…...Those ominous actions were followed by U.S. refiners slashing their crude utilization by 5% in just a week, as the peak summer driving season drew to a close. The return of the Dollar Index to its bullish 93-handle and the stocks rout on Wall Street completed a perfect storm for crude longs…..The question though is has the selloff been exhausted? And if not, how low could it go?

The weekly EIA report is delayed till tomorrow, of course, due to Labour Day, so the article was killing time really.

Meanwhile the five year chart makes a pretty picture and seems to narrow down G’s immediate prospects with just four simple red lines: https://invst.ly/s2nol

I don't think it worked like that bunks - not that it affects the great scheme of things.
It seems G opened at 111 - as a result of the opening auction process - then the five shares were logged seven minutes later as an 'ordinary cross at same price' , so they should not, and did not, influence the market price at all.
It all feels very fragile right now, doesn't it?

Never mind GKP.....I thought yesterday was gloomy enough but today is a reminder that things can always get worse. Brent cratering now and will take a lot of stuff with it unless it steadies up really quick. https://invst.ly/s23ks
Earlier I said G would not slip much further provided Brent stays above $40.....

Looking back over nearly five years of G, since its rapid tumble from £10, it’s apparent that there are just seven key levels of support - nominal levels where the sp tends to resist falling further but generally fares badly if it eventually drops through them. 115 is such a level. It’s nominal, of course, so not penny accurate. How much tolerance you give it will probably depend on context and your aversion to risk.
https://invst.ly/s1-sd

If we look closer and add Brent (green) and Chevron (blue) to the comparison the picture can look something like this (depending on your re-base point):
https://invst.ly/s1-fo

‘Glass Half Full’ investors will presumably see the potential presented by G currently at a price low relative to OP and the price of a major.
‘Glass Half Empty’ investors might see the relatively flat and unchallenging performance of the major and the inexorable gravitational pull of OP towards today’s price, driven firstly by overproduction and now by long-term falling demand.

G recently made it to the 150 price line and very briefly flew above it. That line also represents $50 for Brent on this chart. For me the message is that G probably won’t drop much from here unless OP falls back below $40 but I don’t expect to see a return to 150 until OP is firmly back above $45. I doubt that 170+ will become sustainable until Brent is above $50, override payments resume (favourably adjusted to compensate for recent payment shortfalls) and Sarta begins to boost production levels.