Member Info for Bravedog

The southern mega-project involves the development of the Nahr Bin Umar and Artawi oilfields and an increase in production from the two fields to 500,000 barrels per day (bpd) from around 125,000 bpd now, Abdul Mahdi said.
https://money.usnews.com/investing/news/articles/2019-05-08/iraq-sees-deal-with-exxon-mobil-petrochina-very-soon-oil-minister

Irak close to signing a huge deal with Exxon and Petrochina. Deal worth $53 billion and said to generate $400 billion for Iraq over a 30 year period.

33 mn ago

No need to nationalise: money is lost by the government which can change. Better have the dividends come directly into the pockets of the Kurdish families and parties from a listed cy in London. The International Court of Arbitration will protect the PSC. Better make a big extension to the PSC.

GKP has 0% insiders shareholders.
GM has 7% and it is new cy.
Not shocking that the shareholders want a management committed to the cy.
The shareholders didn’t want the price to rise before all the parties have been given an opportunity to get some shares cheaply. The management is in.
We now know that PUK and Goran have agreed to take part in the government. According to Rudaw, they are now talking about bringing in Komal. Read http://www.rudaw.net/english/kurdistan/05052019
They must « get share cheaply » before entering the government. All the parties will be united before the announcements and afterward...

And about the length of the PSC, don’t forget that the shareholders from March 2016 are not the same as the current ones. The MNR will favor the new shareholders by extending the length of the PSC and none of the Kurdish political party will complain.

Kurds will be much stronger vis-à-vis Baghdad, Ankara and Teheran if they are a big minority shareholder in the listed company with a stake in the greater Shaikan. And there are plans to have Dana Gas listed in London. M&A to follow: is there a need to have multiple players in Kurdistan.

Don’t forget that MOL is a listed partner in Shaikan which must publish audited reports.
The Kurds & managers can’t sell the it for peanuts only to see some months later MOL report tremendous increases in reserves and production.
I don’t believe in a sale, as they want to keep control on it: otherwise the buyers will agree with ICG and they loose all their leverage.
At the beginning, the KRG had in mind to keep 20% of all the fields. They certainly prefer keeping control on GKP with GKP holding 20% of Shaikan or of the greater Shaikan. In other words, better let the Kurdish families rather than KRG control Shaikan.

Mickey,

99% of II buy shares that belong to an index. As GKP is « unclassified  », it is not part of an index. Therefore brokers and II don’t look at it. Only some big boys with proven track record (Capital, Blackrock et al.) dare to invest in these stocks.

Mickey,

Your screencast link shows exactly what I mean!
GKP is listed on FTSE.
But look carefully : the stocks above and below are included in an FTSE index. GKP not!

That was intentional. They entered the MSCI indexes in order to attract international index funds. Only II follow these indexes as the service is very expensive. If the stock had been in one of the FTSE indexes, much more coverage would have taken place.

Now that they have their shares, news can come out. First, release of annual report so that analysts can study it. Then, disclosure of upgrades in reserves by ERC Equipoise, new FDP and 2nd amendment by KRG, informations about the heavy oil pipeline built by Rosneft.

Together with these news, hints that they will seek to be included in one of the FTSE index. Numerous studies have showed that stocks entering an FTSE index have an absolute positive performance in the 2 months prior to the admission. Pure alpha. And this performance is stronger for undervalued/under researched stocks from the FTSE 250. Right now, GKP isn’t even in the FTSE All-Shares.

Roadshows will begin with two dates to have in mind: May 14 th and June 12 th.

MSCI decides on May 14 if changes are needed in their Indexes. On May 31 2018, GKP entered 2 MSCI Small Cap Index, but the decision was already taken on May 14! https://app2.msci.com/eqb/gimi/smallcap/MSCI_May18_SCPublicList.pdf

June 12: FTSE decide which changes are made in the FTSE index at the end of June.

Another possibility is that they have extended the « 30 days period «  to 32 days to compensate for the 2 Easter days when the market was closed. With one day more at current prices, it means the last day will be even higher. Simple math.

Sorry Straycat, but I was away unable to reply earlier.

We will look how the « actual hurdle market cap* » has changed since 2016, because no options are awarded if the 30 days average is below it. It is the highest of the « market capitalisation achieved » and the « highest market capitalisation at any previous date when nil cost options were banked » for each of the past years.

2016: The « market capitalisation achieved » was 361.5 mio $ because we had a base of 350 mio$ and 920000 options awarded implying an over performance of 11.5mio $.
The « highest market capitalisation » in 2016 was 436 mio $ 150 p (=1.899$) on 14/12/2016.
The « actual hurdle market cap* » became 436 mio $ for the next year.

2017: The minimum hurdle market cap was 350*1.08=378 mio$.
The « actual hurdle market cap* » remained at 436 mio $ for the next year.
No options were awarded.

2018: The minimum hurdle market cap was 378*1.08 = 408 mio$.
The « market capitalisation achieved » in 2018 was 538,24 mio $ for the options awarded in 2018.
The « highest market capitalisation » in 2018 was 906 mio $ (3,949$ or 303,5 p on August 28 2018).
Then the « actual hurdle market cap* » became 906 mio $ for the next year.

2019: The minimum hurdle market cap was 408*1.08=441 mio$.
Then the « actual hurdle market cap* » is 906 mio $ for this year as options were banked in 2018.

The average price from 29/3 to 25/4 is 3.316$ or 254,16p.
Tomorrow the price must be above 15.4$ for the managers to get their options.

Expect big announcements tomorrow (reserves, new FDP, 2nd amendment, news from Rosneft about the pipeline and explanations about the Chinese studies) to have such an increase in market cap.
Don’t sell as trend followers will invest, analysts issue buy recommendations, the CEO start roadshows and M&A start. But the buyer will be GKP !

Look at year 4 and you will see that it is the previous high that counts.

https://content.screencast.com/users/MikeyT110/folders/Jing/media/8b112f2c-8386-4b5b-a4ab-8deb98dab02b/2019-02-26_1916.png

I computed the average price between 12/4/18 and 11/5/18:
It was 169,36 p or 2.326$. The amount in £ is the same as the one published on 20180515. The difference in $ comes from the exchange rate.
My market cap was 538,003 mio$ and their was 538,241 mio$.
The amount $ awarded was 2,346$ x 3363678 options = 7,89 mio $. Divide by 8%, and you get their over performance: 98,64 mio $.
So the hurdle was 538,242-98,64=439,6 mio $
Divide by the number of shares outstanding and you have 1,916$ which you have to compare to the highest close on December 14 2016 which was 150p which I converted to 1,899$.

The point is that unless you take the last high, you can never explain the numbers of options awarded, but if you take it, you have a 1% difference which can be accepted.

So if I am right, the price should be above 16-17$ if the management wants their options.

Isn’t there someone who has realized that the « actuel hurdle market cap* » of the VCP is above 3.949 $ or above £ 3.035 ?

That means that the average price of the 30 days period must be around 4$ for the managers to get their nil cost options.

This should imply very big news tomorrow. It also means that the managers are very confident that it will happen, otherwise they would have leaked some informations via RNS to have an average price closer to the hurdle of 4$.

It takes time to explain correctly what the bod did and why.
On December 13 2016, they announced that on the 12th they had awarded 920000 (+1 for rounding) nil options in 2016.
The base had just been decided on the 8th, after the AG: 350 mio$. So the 8% incremental value wasn’t used, which seems logical: they can’t get 8% in 2 trading days.

The over performance of the stock was 920000/0.08= 11.5 mio$ and the market cap at award was 350+11.5=361.5 mio $ which equals 124.25 p or 1.575$ with an exchange rate £/$ of 1.268.

But why choose 124.25 p when the close was 127p?

Probably because the bod had been informed of the Sinopec rumor and choose a price prior to the rise.

Straycat,

The only problem is that have been able to explain how many options have been awarded and at which price using the 30 days period. There is only a slight difference probably coming from the exchange rates I used as I didn’t have £/$. I used £/€ and €/$ from NY closing prices but GKP used £/$ with London closing prices.

The allocation of those Options in 2016 and 2018 IS related to the VCP participant formula. The allocation between the managers is up to the bod.

In 2016, the rumor about an interest from Sinopec secured the crossing of the threshold of 350 mio$.

Straycat,

Thanks for your very valuable input.
I disagree however with your last post, because the methodology you used (and I was wrong with the one I posted mid March) can not explain why the managers got 920 001 options in 2016 and more than 3 mio options in 2018.
No way. It is not 350 mio$ +8% compounded.

The result is much better for us.

The explanation is perhaps below as PUK wants to be treated better by KDP after having messed up everything in October 2017.

Back to square one? KDP struggles to reconcile PUK, Gorran demands

ERBIL, Kurdistan Region – Almost 200 days have passed since the Kurdistan Region held its parliamentary election. Despite several so-called “breakthrough” deals between the three biggest parties, the Region appears no closer to forming a new government.

http://www.rudaw.net/mobile/english/kurdistan/150420191

Waiting for a 400k bd FDP when Rosneft’s pipe ready.

Surreyscot,

Many US funds aren’t allowed to buy non dividend paying cies.
Many funds aren’t allowed to buy Bermuda registered stocks. As it was prohibited in my bank, I had to find another one.
Insurance cies prefer buying stocks paying a dividend to invest in low yielding government bonds. Unfortunately, GKP is to small and not part of the major indexes.

Question to other specialists: what do they need, apart from a high level of market cap and OGL, to enter the Footsie?

When they enter, the stock will be overvalued which will be a good time to make some acquisitions. We are not there yet, but I believe all the news could come simultaneously.

BB

One year ago on another bb, as you were « a marginal » shareholder not very positive about GKP, I recommended you to buy shares. I saved your reply in a place I can’t find, but among other things you said you would invest when all the problems were clarified.

You are still negative and as nothing is done for free, I can’t understand why you post negative comments here and elsewhere. Are you acting as a consultant for somebody who wants to keep down the price?

If you were, you wouldn’t tell it...