Member Info for Boyobach

Ha! I see what you did there Lemm, you should be a magician. Your opening line deftly reveals how the trick works 'Ignoring the technical accounting move for Miran (-$424 moving from our balance sheet to P&L).' because it fools the audience into thinking there must be another answer. But you can't just make $424m of assets that would have been profitable for years disappear without any mar cap consequence can you?

Likewise 'aren't [G & GKP] quite comparable companies?' Heck no they are not. GKP can just sit where it is for a good few years making money for its shareholders with no need to explore or expand - with all the associated costs and risks those endeavours entail - until, maybe, gracefully winding itself up in an orderly fashion and returning any accumulated capital to its investors.
And when GKP says it'll double production, maybe the market thinks that's a bit more convincing and achievable than some of the things G has said in the past.... Mmmm, why am I not invested in GKP?......

For Thursday 2nd May 2019:

Brent was dropping off the prevailing trend before yesterday’s EIA report, so today’s more significant drop was an inevitable consequence of the unexpected inventory build at GOM.
https://invst.ly/aorqq

This could be the second time that the Iran sanctions issue has wrong-footed the global oil market. OP may be just pausing, it may be levelling out or it may be set to fall back (despite what most pundits have said). So watch it and then watch it some more. G could land anywhere down to 196p at $70 Brent because, whilst the chart suggests 210/212 p and G (p) = 3x $Brent has been a good general rule of thumb, when G is weak it has recently dropped to about 2.8 x $Brent. You’ve been warned.
https://invst.ly/aos0j

All the others are down except RDS, of course, after headlines today like : ‘Royal Dutch Shell pumps better than expected profits’. A different class dear boy! When/If you’ve made your bucks in G you might do worse than going well with Shell (showing my age) and sticking the proceeds there:
https://invst.ly/aorfn

For Thursday morning 2nd May 2019:

G investors seem to be a bit edgy don’t they? Today’s price drop not unexpected but certainly, I think, anticipating rather than reacting to OP.
It’s worth bearing in mind that this year’s worst ratio of Gsp/OP is 2.861 - so, although I don’t expect to see us below 210, we could theoretically see 203p at $71 Brent if the nervous mood deepens.

I assume you are talking primarily about US tight-oil producers, Love_You ?

I understood that the main problem there was servicing debt, so that maintaining/increasing production as prices fell was their only hope: keep producing or go bust. The large IOCs did cut exploration activity, which could cause a sharp increase in OP at some future point (some said about 5 years) as the lead time for replacing exhausted resources is quite long.

As I understand it, the sudden build has occurred at GOM rather than Cushing - ie seaborn imports rather than US produced. Perhaps an over compensation for lost Venezuelan supply and a reduction in refining? The US might also have increased strategic inventories ahead of Iran sanctions tightening because they will provide some of the export capacity to fill the gap.

Anyway, it’ll be interesting to see how the inventories look next week and if the trend continues.

For Wednesday 1st May 2019:

A pity G slipped back today. I guess 230 will have to wait for another attempt. There’s an old wive’s thing about ‘must knock three times on the resistance’ - total bullox most of the time, just like the ‘sell in May’ thingy - which may have worked when ‘debs were coming out’ but not in your 24x365 ‘internet of things’ world. But there must be some logic behind the thought that enough volume of trades needs to accumulate at a resistance/support before it will give way. As someone here pointed out, volume was lowish yesterday. Lot’s of folks in the running for FC by the look of it, Withoutt’s price gets a mention below.

Todays chart is a stripped down version of the usual ‘runners and riders’,
https://invst.ly/aocec
just to demonstrate that you can glean a fair bit of info from this simple version of it, like:
OP at today’s close was about $71.5 and G closed at 222, much the same as it did on November 11th when both were on their way down - so quite weak. G was also down to 210 (ie weaker still) just three weeks ago at the same OP. The trend and support lines don’t give much comfort, so the message is: G could drop further with 215 or even 210 not out of bounds as far as the chart is concerned.

I’m assuming this is all self evident but If anyone isn’t sure how I read that off the chart and wants to know tick the recommend - which appears to be anonymous - and I’ll explain.

230 Resistance held after all. G opened on the line and the sellers decided to take the money rather than wait and see. With OP slackening off, it's probably 'game over' for a while - back to the sideways shuffle. On the bright side, G about 10p up relative to a fortnight ago and I'm back 'on' for the FC thing.

Not that Genel needs high oil prices......

It's often said here that the forecasts are good at just $45 but the fact is that the sp is utterly dependent on OP.
Given G's current performance, you'd be lucky to see G at 135p if OP fell to that level.
There are days when G does not appear to track oil but don't let this obscure the very obvious dependency.

Ooof Lemm, trends are indicative rather than predictive and they don’t go on indefinitely. They are often more useful as indicators of change than they are of targets or limits. I tend to think that G could level out in the 250-260 range because we are just back to the price bands that G was in late last August - OP is just about getting there, the resistance levels will still be there and G is only a little stronger as far as the market is concerned. It must also be said that the chart has been awfully symmetrical up to now hasn’t it? Time will tell - perhaps by July at this rate.

Do some of you sell and buy back or hold and hope?

On occasions you might detect that the sp is on the verge of a pull-back that just needs the divi drop to trigger it. Or maybe it has ramped up a bit too much beforehand. On those occasions I might sell but maybe not the whole shebang! I've sometimes been lucky enough to sell shortly before ex-div only to buy back in time for it, because lots of others selling - got a profit and the divi. Sweet but... If in doubt stay in.

For Tuesday 30th April 2019: Final round-up

Unlock! G appears to have closed at 231 thanks to a good (relieved?) market reception to the latest Bina Bawi chapter, which maybe because it removes the threat of greater than expected cap-ex. In the end OP faded away, merely staying about level. G/OP was at 3.19 a fair improvement on recent days but well short of 3.49, its best this year, indicating that there’s room for better if 230 stays conquered.
https://invst.ly/ao1fi

If 230 remains secure for a few days, with no close/open below 229, the next target can be considered. Here’s a wider view of the same chart:
https://invst.ly/ao1g3

The good news is there seems to be some fresh air above 230 until around 248p - perhaps coincidentally the price G was at when Brent peaked at $86. Above that, there’s the bogeyman of 258. Bunks will probably remember that from last year. I reckon that passing 258 will make the last couple of resistances look easy.

Then there’s the rest. I earlier posted the April ‘runners and riders’ comparison. The long term picture since peak oil is, of course, different but no less encouraging, as G is second only to DNO, which is frankly, for now, a rather stronger horse: https://invst.ly/ao1es

For Tuesday 30th April 2019: Bina B reaction.

Obviously a good day for oil cos in general but for G in particular. It may seem hard to separate the impact of a stronger OP from the market’s reaction to the Bina B news but, as I said yesterday, the G/OP ratio does the job - it increases if G gets stronger against OP but does not react to the changes themselves. Today it hit 3.2 after being down at 3.1 or less recently. Also, a 15’ chart of the last few days pretty much tells the story: https://invst.ly/ao0fz
G didn’t fall with OP and was cushioned at 221 support. The OP recovery alone would not have driven it back up much - the cushion absorbing much of the upward OP movement. Today’s rise was smartly away, Finally, GKP’s increase today was more muted.

The crucial point will be if G closes above 229/230 and opens above it tomorrow.

And in related news, the ‘April Only Handicap’ winner is….. Genel !
https://invst.ly/ao0ih

It maybe a bit premature ahead of today’s close but G, already the likely winner by a clear margin last night, has left the field standing today. PMO had led at the start of the month but was challenged by G for most of the race until running out of steam in the last stages. GKP was never really in the running from the start, whilst RDS is racing in a different class and DNO is resting on laurels for the moment:

Who would’ve thought it eh? A couple more months of that and we’ll be laughing...maybe.

A bit more after the close.

Rangor is correct Hasiba. Yes energy companies are up but G is disproportionately so and has achieved a higher sp/op ratio than it has managed for quite a while. Last week it was struggling to hit 230p with an op of $74.5, today it's doing so with ease at just $72.4. The full round-up later, but a good day so far for G, boosted further by OP.

Yep. Let's see where she goes at 230....

Thanks guys. Those answers do it for me.
I was wondering a) at what point the tax 'benefit' of the write-down would get balanced out and b) what a potential purchaser of G would actually be paying for the gas asset once it was producing.
I guess the latter is irrelevant - the mar cap should go up as the resource gets to the point of exploitation.

The Miran write-down has been portrayed by some as smart accounting, which makes some sense but can someone explain what happens if/when the gas is about to be developed? Does it suddenly reappear on the books as a non-impaired asset or does it remain as a low value asset which simply generates a bigger margin as it is extracted and sold?

Klassic: The purchase of the GLA’s by Hayward’s mob was a colossal miscalculation.

Well it was based on their main miscalculation of 200,000 bbl/day production at Taq Taq by end 2014. Tawke was supposed to do likewise. Funding gas development was not going to be difficult with the revenues G anticipated from its share of Tawke + Taq Taq.. Add to that the period of non-payment and G was effectively stuffed. The gas is still there though.

Yes Hawkey- could be a monster alright - but in which sense of the word?

One thing about Bill, it seems, is that he probably isn't the sort of chap who goes round drilling loads of holes just because that's all he knows about. Qara Dagh looks like it needs to be 'done on the side' ie with spare resources that could poke around without draining too much cash. Although, that approach may be somewhat scuppered by the apparent complexity the project presents.

Vast and their fellow Canadian chums, Niko Resources (operator) were quite possibly out of their depth. There's more stuff from them in 2011 here:
https://www.rigzone.com/news/oil_gas/a/108874/niko_makes_oil_find_at_qara_dagh_block/

I imagine Chevron ultimately did not want to continue to commit resources to the KRI - I'm assuming they will have no other operational interests there - so not necessarily a bad reason for the deal.

H asks for thoughts about Qara Dagh:

Few parts of Iraqi Kurdistan are as lovely as Qara Dagh. Its chain of jagged, serrated peaks runs southeast for some seventy miles……
I’m sadly quoting introductory words from a Human Rights Watch piece. It’s a story which due to the terrible events of that time, makes G’s prospects in the area seem totally inconsequential.

By contrast , the story of Vast Exploration Inc. and its consortium partners is lighter reading. They apparently found ‘550 barrels of oil per day and 800 mscf/d of gas, although these rates were not sustained for the entire duration of the test. The oil produced is 48 degrees API with no H2S’
However it was not to be commercially successful and they were equally unsuccessful in trying to find a farm-in partner before the consortium ultimately relinquished the block. Vast Exploration, which may not have been as big as the name suggests, was apparently transformed into a holographic biz called ARHT Media and swallowed by Delebrity Inc in an RTO. I’m not making this up. In other words, Vast ain’t vast no more.

Perhaps it was simply lack of funding, expertise or resources etc that caused Vast to fail.

Then Chevron came along but IS and, later, the KRI Independence dispute with ICG severely interrupted work - for a total of around three years it appears.

Their people produced a paper ‘Unravelling the Qara Dagh Anticline’ which maybe you can read and understand. However, the title alone (I read no further) leads me to conclude that the block may not be a straightforward proposition:
http://www.searchanddiscovery.com/abstracts/pdf/2017/90310aapg/abstracts/ndx_phelps.pdf

I believe Chevron said of Qara Dagh: ‘ the results from seismic acquisition and evaluation in 2015 improved our understanding of the prospects, and we are evaluating next steps,”

They subsequently decided to offload to G.

It’s near Taq Taq apparently, well 60km apparently...

Looks like a winner to me - maybe, well....

Given G's track record on exploration.....

‘there is also not much to differentiate sagacity and foolishness’....

Yes Lemm - A smart guy can think outside the box, an idiot leaves the box without thinking.

For Monday 29th April 2019

Let’s face it, with Brent dropping back, G has done well to stay above the magic 220 - apparently cushioned by the support level on this occasion. Just over a week ago G touched 211 at this sort of OP. It’s easy to forget that $71 is a respectable price for oil and that it has risen pretty solidly from $50 so far this year, although that trend has experienced a wobble over the last week. This chart sums it all up: https://invst.ly/anqah

Some of the folk who get upset about G versus GKP and PMO obviously never check the next chart, where three runners and riders are bunched up on the inside rail ahead of Brent, whilst the other two are maybe running in different races. Yes, it is selective - but if an individual Oil Co wasn’t on reasonably representative form when Oil Peaked then you’ve got to wonder why: https://invst.ly/anq9k