Member Info for Boyobach

Malcy: Genel is still ticking all the necessary boxes in particular that of serious cash generation….
…. Tawke ticks 70% of those boxes (which include the overrides).

Thanks Cashburner.

It’s a pity that RNS’s intended to clarify, calm and reduce suspicions about the KRG and payment issues have sometimes had precisely the opposite effect. This part of the response you got from IR explains a great deal after some reflection:
‘The change to being paid a month later than production came as a way of sweetening the pill last April ……’
[That’s April 2020 btw]

So, looking at the payment schedule, it appears that the effect of that ‘sweetening’ was to advance October and November 2020 production payments, worth about $21.8m, into the FY 2020 cash flow, when they would ordinarily have appeared in 2021. What was not properly explained was that this was temporary and the two advanced payments would subsequently be compensated by a reduction of two in the number of payments made in 2021, as the normal payment schedule was reintroduced.

Unfortunately, the May RNS didn’t make this clear and there was no subsequent explanation. Because it was bundled in with the unrelated change to the receivables arrangement, G's stated response to the KRG's letter left the distinct impression that the KRG were acting unilaterally , unexpectedly and without G’s approval on all matters within it when, on the matter of payments, they were simply reverting to the normal schedule and spreading the remaining ten due payments for 2021 over the full year.
The resulting inconsistencies of payment dates, which were left unexplained, simply served to fuel inevitable investor concerns regarding KRG reliability.

.....reached 1740 on 11th Oct at the current OP... doh!

Yes Barrie - rescued by Brent? A happy coincidence that doesn't necessarily validate the support level. Ha! Still let's hope it does hold, even through ex-div.
Another observation from the same chart is that RDS reached 1740 on 11th Oct at the current sp, so if we filter out the variations in OP, RDS has lost about 75p, or about 4.5% in underlying value since then. It's not a big deal for LTH's like me - but a meaningful profit/loss in trading terms.
https://invst.ly/wi9yb

Roperace: fair point but presumably the CO2 already existed - so it's effectively making jet fuel that can then be used without creating more CO2? Effectively re-cycling CO2.

From 13th May RNS:
The KRG has stated that the amended payment schedule will be applied to the March 2021 invoices onwards, and that payment terms will be 60 days after the submission of invoices…..The proposal has not been discussed with, or accepted by, Genel, and we look forward to discussing it with the KRG shortly.

From to today’s RNS:
……...despite the expected industry-wide reversion to payments three months in arrears by the Kurdistan Regional Government.

My first questions would be: When did 60 days become three months? And What indication did G give that they were expecting the reversion to payments three months in arrears? Their RNS’s gave the distinct impression that they were not expecting the payment changes, nor had they accepted them. Have I missed an RNS that clarified the position?

Good!! I 100% agree with Ben.
I suspect Dan Loeb is motivated by something more self-serving and, consequently, of much less benefit to both the environment and RDS investors.

I actually agree with both N0mad and NBWallace, if that seems possible. I think it was way too soon for the sp to hit £20 but, equally, I think there's a lot further to go. I'm back to 'equal weight' after reacquiring another tranche today. It's too early to say whether the support at nominally 1630 will hold, but I'll happily go overweight by buying back another tranche if it enters bargain territory near my next target around £15. The upcoming ex-div means there's effectively a 17p cash-back for buyers prior to 11th November. Trading has enabled me to reduce my net average cost to below £9.50 from over £15 at the outset, so the highs and lows have served me well.

I have just returned to PFC after taking profits back in Feb, and do not qualify for the offer.
The sp seems attractive at present and, I think, is probably dipping along with the wider sector as Brent falls back. PFC always seemed to track OP to some extent: https://invst.ly/whw67 (15' view). I'll progressively add if it falls towards 115.

With OP easing back, it’s perhaps worth recalling how this went on the three most recent similar occasions: https://invst.ly/whu-c
This illustrates that the underlying trend (blue) will continue intact if Brent generally remains above $75 for the next month and is above $78 at the end of the year. Whether the $86 ceiling will yet be breached remains to be seen but it is worth bearing in mind that OP often, though not always, sees a seasonal price cycle that takes it through a low point during the December to February period.

My own view is that cheap oil is counterproductive in terms of transition to renewables, whilst expensive oil is bad for economic prosperity and society in general. So, between the two there will be a sweet spot which will move over time. I have no idea exactly where that currently is but my hunch would be mid $70s for Brent. During the US Shale ‘booms and busts’ of the last ten years, it became clear that the market sweet spot was lower, with Brent in the mid $60s and WTI averaging about $5 lower. Things seem to be different now - the shale companies that pumped to survive in order to pay back debt, despite further squeezing their margins, have either gone bust or finally achieved capital discipline. However, the WTI discount to Brent has narrowed dramatically and the US has consequently experienced a sharper rise in OP since Trump sought to keep WTI below $60. I think this will probably cause downward pressure of a more political nature as the Biden administration continues to see an apparent decline in popularity.

To be fair - does Sarah ever say anything about RDS - whether illuminating or not? I recall that 100% of his/her input is personal derogatory wind-up. Along with Rach666 (an obvious char333 spin) and a couple of others it's just toxic and isn't even amusing.

I'm sure we are all glad to welcome back the troll formerly known as sarahsutton1 .
I wonder (but not much) why the name change was necessary and why the profile got erased (although posts still remain).
It's been quite a while since I had to filter someone but needs must....

Were they terrible? They obviously didn't meet market expectations but the tone of pokerchips article seemed ok.
A messy day chartwise, leaving gaps to fill above and below. tut tut...
https://invst.ly/whl6r
Hopefully a temporary glitch.

As N0mad says, adeg1, Shell is still buying back shares - unfortunately it seems we can't rely on the London South East website to publish all RNS's.

Quite plainly, fossil fuels must be priced at a level that discourages their use - the obvious mechanism being taxes/duties of some description, with the funds raised being directed at easing the cost of renewables. It's not difficult for a government to fix the market to achieve this. But, the later they do it the sharper the adjustments will need to be.

Fair observations about the sp char. The price of RDS - like all shares - cycles up and down whilst also following longer term trends. In the case of RDS the cycles are often of around £2, so the current swing down from £18 isn’t out of character. I think there’s a good chance that RDS will find support in the 1600-1630 region (where I’ll be topping back up) but, if it drops through that, the speed of the recent rise didn’t leave many clues except for the obvious marker down at around 1520, which would now represent bargain basement level in my view.
https://invst.ly/wheqe
Pokerchips just hasn’t posted here recently - I’ve seen his comments elsewhere.

The relationship between OP and the sp is not entirely straightforward and it is variable: As you’d expect, it averages out over time, with the ratio between the two over any given period being dependent on many other factors, including exchange rates etc, which influence the market value of RDS.
For example, for the year to date, RDSb has averaged around 21x the $ price of Brent/bbl with the deviation from this ratio being indicative of the relative market strength of RDSb at any given time:
Here’s a plot of RDSb against 21x Brent $ price (last 12 months) https://invst.ly/wh266
As can be seen, RDSb is currently relatively weak by this measure.
However, during 2018-2019, when the dividend was higher, RDSb averaged closer to 36x Brent $ price:
Here’s a plot of RDSb against 36x Brent $ price (last three years) https://invst.ly/wh2bo If that ratio prevailed today then the sp would be in the seemingly absurd and stratospheric region of £30!
The elastic nature of the ratio shows that the sp tends to smooth-out reactions to sharp and transient changes in Brent whilst its deviation from the long term average can provide a good indication of the sp’s relative performance.

What a difference an hour makes N0mad! https://invst.ly/wg-b6
effectively a breakout in the opposite direction.

The price of Brent has continued to soften by about $1 since the stock market closed on Friday, which implies a further 20p off RDS can be expected. However, whilst Brent’s highs have got lower, the lows have been getting higher - resulting in a wedge pattern that must ultimately be resolved (15’ view): https://invst.ly/wgz94 .
It currently looks like the downward trend is dominating.

... and where next for Brent?
It will be interesting to see how Brent moves when that market reopens tonight following the front-month switch from the December contract to January’s. Having fallen for the middle three days of last week, Brent steadied up on Friday, ending the December contract at $84.38, 85 cents above the January contract at that point:
https://invst.ly/wgsxq
The sharper rising trend since late August (green) may be over but the established trends for OP are still upwards and $86 was likely to be a challenge..
Here are the last 11 years for context, where the significance of $86 becomes more apparent: https://invst.ly/wgszg .