Member Info for Boyobach

Ha - bunks - excellent! Yes, on sp and therefore Mar Cap, GKP stonking away. Which is understandable when you knock nearly half a billion dollars off your assets (slight exaggeration).

One man's buy point is another's sell. Break down or Bounce up? https://invst.ly/acmx8

Well, I thought we might have seen this price on Wednesday but had to wait till today to top my trading stock back up at 201. Hope it doesn't go below 197 though.

For Friday morning 22nd March

With this morning’s fall it seems worth dropping a note.

I’ve been hoping that, as G’s FY report has set the revenue, resources and strategy position straight, the longer term progress of the sp will continue to stay within the broad rising path it has been on since early January. This is represented by the straight grey/green shaded tracks, overlaid with Bolly bands (pink) for added interest and information, here: https://invst.ly/acm3i

The FY obviously did cause a glitch on Wednesday but the long term upward trajectory has not yet veered off course and could tolerate a price as low as 200-203p over the next couple of days before a more profound change of direction is being indicated.

Ocelot: Some rounding issues with my numbers - but essentially agree with your 350 number using Rangor's suggested ratio of 8.

But being the 'negative' member of the team, think that could be top end.

sorry Ocelot - missed your last post, was replying to previous.

OK Ocelot, that's a fair point.

So let's say 10% growth (production guidance), E=42p and Rangor's conservative and reasonable ratio of 8,
Theoretical sp = 335p. Seems high to me - but if sentiment shifts?

Meanwhile, based on your 5.7 ratio, theoretical sp = 238 - which is very close to what my OP based spreadsheet currently tells me is mid price to expect for G if Brent is $75, and absolute max sp if Brent is $68 (today's price)

Fair enough. let's see - the market may not adjust for a while and OP historically peaks September/ October (although that can't be guaranteed). We possibly have a realistic 2019 range there?

Yes Rangor: .... With a P/E of about 2.6, when it could be expected to have a PE of +8.

That's true isn't it? I put it down to the market's confidence with G. It should normalise over time but it'll probably take longer to restore than it did to loose

For Thursday 21st March

A reassuring day for any anxious G watchers, here’s yesterday and today in slo-mo (15 min clicks) against Brent:
https://invst.ly/acen6
As you can see, today G has settled to broadly follow Brent (in green + the two parallel lines), which it does when nothing else is dominating - suggesting that yesterday’s turmoil over the FY has calmed down and that the market may well have come to terms with the message. The fact that Brent has remained pretty firm has undoubtedly been a help.

On the day view we just have to hope that the 209 line isn’t now breached and that the sp sees some highs in the 224-228 range in the next week or two:
https://invst.ly/acep9

If the highs over that period get progressively lower from today’s 220 then brace yourselves for a possible step downwards, though there’s no sign of that currently. Given the fairly straightforward guidance given, the price may well stay fairly level in the 209-220 or even 209-228 range for a good while.However. it has to be conceded that G has so far lost a bit of ground following the FY, 9p in fact, which the other runners haven’t felt:
https://invst.ly/acex5

Negative Rangor? Moi?

I think I've always been one of the cautious ones here when it comes to over expectation - it's not like G holders are a religious cult is it? It often surprises me how trusting and believing investors can be. We can be suckers, basically.

After nearly eight years of watching 2.78 Billion USD plus many 1000's of bbl oil and, not least, a few 10's of k of my own GBP disappear with nowt to show - I'll try to be objective about G, determined rather than cheerful.

The results yesterday were a mixed bag at best. The jury (market) is obviously still out with the multibaggers presumably first to jump having seen that the gas resource, used as investor bait during the IPO and enthusiastically talked-up until quite recently, is almost certainly dead. I'm just waiting for 'KRI gas assets' to be dropped from G's website Operations front page - and replaced by KRI Development.

For the rest, Taq Taq limps on - never to produce the 100000 barrels/day once suggested. The Chevron assets have been quickly ushered in to provide some credible fill - how credible remains to be seen (more trust required!).

The RSA may eventually pay back all the receivables before it runs out. Many people blame ISIS for this but it was already a problem before the Mosul invasion and was mostly caused by KRG/ICG budget disputes. G kept pumping whilst the debt piled up and no formal agreement to pay seemed to be entered into. Very accommodating.

G is a company with one very demanding customer that totally calls the shots (literally sometimes). To think otherwise is to be deluded. They've talked of diversification out of the KRI but it hasn't happened - I wonder why? There could well be a good return to be made here (as there was for a nanosecond last year) but it may not be the virtuous, naive, trusting and patient investors who get to see it. Malcy's comment about 'Miran being well trailed' amused me. It was the one asset not mentioned in his interview - so much for 'well trailed'. Worth reviewing it for body language, coughing and shuffling.

ATB

Correct Whitehat! in my view.

The market will not price Bina B in for a good while yet - if ever. I don't think the KRG are in a rush to develop it as they appear to have pi55ed off their only customer for it, Turkey, who now have a terrific relationship with their long term and more powerful supplier (who, in any case, has them by the short and curlies). Meanwhile, KRG has all the gas it needs via Dana. The KRG simply wants cheap export oil of suitable grade and what the KRG wants from G the KRG gets.

It's just that as Pareto have DNO and G as clients and also, I believe, have hosted events in Erbil, they are likely to give the most positive assessments. So not a source I would quote if I was trying to ensure an unbiased view.

G's cashflow is good (relative to the reduced size of its assets), which is just as well given their track record of losing money and writing things down.
The company is a shadow of what it was, production 40% of what it was three years ago, assets decimated and retreating from once prized and supposedly imminent projects. As investors we should be patient but mindful that success is the only measure that ultimately matters. G has an unbroken track record of failure to deliver according to the expectations it creates - read any of the FY statements and then the following one. The write down at Miran is being interpreted by some as a smart technical move, few seem to consider whether the resource was overpriced/overvalued to start with and that, actually, the promise of being a major supplier to the Turkish market seems to have evaporated. Yes, G is a success story in the making, if that's what you want to believe.

You guys think that Pareto are a totally independent source of advice regarding this?

From a press story relating to the Bond deal at the end of 2017:

Genel – which has retained DNB Markets and Pareto Securities to manage the deal.....

For Wednesday 20th March

Following today’s statement the sp bounced between trends, down to 203 (blue) but eventually perched on the rising red trend line at 213, only 12p down on the previous close. https://invst.ly/ac11m

The swift bounce up from intra-day 203 is encouraging, given the volume traded, and the inference is that it will move upwards from here. This would be a pretty good result given a declared operating loss of quarter of a billion USD. Jewels in crowns are not cheap things to drop, even temporarily, it seems. But the market has read G pretty well of late and, by today’s moves, appears to have largely written off the gas side of the biz. Needless to say the prospect of continuing to follow the orderly trend up towards 250 is now in some doubt but, for the moment, it could still be ‘on’ because of where it closed. The next few days will tell.

So, the market may well be content with G’s immediate ‘sans-gas’ prospects: Cash generation looks solid enough provided G can stop writing stuff down at an equally impressive rate. The plus here is that there isn’t as much left to write down. G’s accumulated losses, a testament to the company’s past story, apparently stand at 2.78 Billion USD, having only increased by $280m this time. Total equity was diminished accordingly but shareholders are apparently to be rewarded for their generous support in a year or so with annual distributions commencing at $40m. There was much talk of future jam, as there was 2.78 Billion USD ago. G has now turned a number of corners and consequently may well now be back at the starting line, albeit minus the 2.78 Billion and all the oil that’s been pumped in the meantime. There’s so much to be cheerful about.

December article ?

Thanks Sparky. Yes, I do get your frustration - and that of a few others here. However, you sum up the reasons yourself when you say 'a whole raft of potential which isn’t priced by the market.' The market has priced in G's potential before and the result has been steep losses, so it's not surprising to me that there's not much enthusiasm

I guess that maybe you were not one of the many (including me) who lost thousands as G slipped progressively from £10 to sub £1? There was always a story - something to keep folks 'on the hook' but the often used phrase 'turning the corner' only began to take substance about two years ago as things started to look vaguely promising. Frankly I thought the market had blundered prematurely again last year when the price got up to 290p + as there was little of substance (ie cash in the bank and gas/Bina progress) at that stage to merit the price. The market has been bitten a few too many times by G and there'll be a sharp intake of breath tomorrow if Miran turns out to be yet another jewel that has fallen out of the crown. G has done more disappearing tricks in its time than Derren Brown or Paul Daniels, so you can't blame the market for being sceptical. We need to see some solid progress rather than pretty graphics and artists impressions tomorrow, I think. And, by the way, eight years is a long time to wait for a divi. ATB for tomorrow.

Elcapitan: I think that it's almost a coincidence that the two market caps happen to be so close - ie of the same scale. The sp tracking is almost inevitable given all the common factors.

They would naturally tend to track together and, indeed, as you suggested, DNO is very similar in shape over the period since G collapsed from £10 and GKP got restructured, ie from Jan 2017 onward. The three will pull apart when the main factors common to them (production levels, resources, KRI situation, OP) vary in significance or new factors affect one but not the others. DNO now has interests elsewhere - so its price (and therefore the Mar Cap) has progressively pulled away over the last few months. Very noticeable from January if you look at the comparison chart today (the second one). ATB and GL tomorrow!

What makes you think G is being held back Sparky?

Elcapitan: What does this look like if you put Dno on it? Is it the same?

I hope you are joking - Ha! That's a job and a half which I'm not about to do because DNO is quoted in Danish Kr or Euros and is, in any case I believe, about 2x the market cap of the other two. But basically it tracks pretty much like DNO's sp on my usual comparison chart where they are all expressed in percentages. So a 1% change in DNO's sp = a 1% change in Mar Cap. You just need to remember that DNO is worth about twice as much as G or GKP and a bit less than RDS (Ha! - a lot less).

For Tuesday 19th March

Just ahead of the FY tomorrow and, in market terms, is G up or down compared to last year, before oil crashed but after all the hype had dissipated?

Well, on the 3rd Oct last year, oil peaked at $86 and G closed at 248p, like it says on the comparison chart which appears here regularly and at the end of this. Today oil is back up to $67+ and G is around 225p. If G had remained pro-rata oil then it would be 193p today so, if OP is ignored, G is about 17% up on where it was on 3rd October. Hopefully tomorrow will not disappoint like last August’s H1.

In the 5 day run up to the FY, G has risen a little more than OP. How significantly? I’ll let you judge for yourself:

G v Brent 15 minute clicks: https://invst.ly/abo6s

The usual suspects since peak OP in October: https://invst.ly/abo60

Earlier there was some chat about Mar Cap for G v GKP and I produced this chart which is basically a comparison of the two sp’s but locked to 28th August when, I believe, the two Market Caps were virtually the same. The gap between G and GKP is only about 3% different to that of the chart above, locked to peak oil, so you only need the first one to get a rough idea: https://invst.ly/abo5a

Yes it does Sparky.

And why not?

One big resource that'll go on forever but a massive restructure that cost investors dear at the time.
v
A claim to hold the largest reserves & resources in KRI (still ?), a track record of write-downs but plans to grow.

Take your pick. And here's a Mar Cap comparison chart (as best I can get it) so you can pick your moment to jump from one to t'other if you want to (or beat yourself up about missed chances to do so).

https://invst.ly/abli3

There's not much to choose between 'em in my view.