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Director Garrett Soden (previously with GKP) sold 11,113,667 shares of the Shamaran's stock on Monday, February 3rd. for an average price of C$0.15.

Total value of the deal was C$1,667,050.05 (ca USD 1.16M)

Confidence, realism, resignation?

For the umpteenth time, here are the contract terms:

GKP made a Declaration of Commercial Discovery on 1st August 2012.

The Development Period is defined as 20 years. Without an extension, the contract therefore ends on 1st August 2032.

There is also an “…automatic right to a 5-year extension”. Not defined, however, is whether or not this “right” has to be officially requested and, if a request, when such request must be made.

There is another possible extension, of another 5 years, which can be requested at the end of the 20+5 year period. If so requested, and granted, the contract would then end 1st August 2042.

Such request to be made at least six (6) months before end of the development period.

These Trigger Points will require careful consideration by company management well before the mentioned dates.

Appears on the enerdata network 4th Feb-25:

https://www.enerdata.net/publications/daily-energy-news/iraq-approves-budget-law-resume-kurdistan-oil-exports.html

"...For several years, the Kurdistan Regional Government (KRG) has been engaged in a political fight against the central government over its oil resources. It started to export oil independently in 2013 through a new crude oil pipeline delivering locally-produced oil to Ceyhan (Turkey). In 2022, the Federal Supreme Court ruled that Kurdistan's 2007 oil and gas law was unconstitutional. Consequently, Kurdistan will be obliged to deliver its entire oil production to the federal government. IN ADDITION, THE GOVERMENT HAS THE RIGHT TO CANCEL OIL CONTRACTS ENTERED INTO BY THE KRG WITH EXTERNAL PARTIES REGARDING OIL EXPLORATION, EXTRACTION, EXPORT, AND SALE."

CAPS are mine...

It's not really "profit" sharing - it's Revenue Sharing.

"Today's signing is an important STEP TOWARD a fully termed contract," BP executive vice president William Lin said in a statement. The company said negotiations are EXPECTED TO COMPLETE EARLY IN 2025."

(CAPS are mine)

Stiil a way to go...

@starsalign,

I have heard that the KRG (supported by APIKUR) want ERC Equipoise to conduct the Costs of Production verification. For obvious reasons, the Baghdad authorities baulk at this and are sticking their heels in on this one.

Reports coming in of Iranian Irregulars accessing N. Syria via Iraq; think convoys of armed millitias with heavy weapons - not exactly easy to hide.

Despite Sudani's guff about Iraq having secured its borders, it appears nothing much has changed.

Expect the US will react in due course.

@pauline,

do you want an honest exchange of throughts on the real reason why - or do you just want bromides?

1. Although the company has reasonable cash reserves, something has happened "downhole" (i.e. in one or more of the currently producing wells) that gives it cause for concern, and that translates into holding back a bit with cash outlays. Water breakthrough or sudden decline in pressure come to mind.

2. As 1 above, but relating to the expected / budgeted cost for the refurbishment of the PF-1. Expect the unexpected.

3. Discussions with the central gov have indicated that Gas Management plans will now be fast-tracked, and that too translates into holding back unnecessary cash outlays.

Thoughts....not assertions.

Carpatthis,

at the risk of appearing unbalanced, can I raise the issue of $16/bbl for all - or just for some?

SH heavy crude (API17) has a lower value than Atrush medium-heavy (API25) and a much lower value than Swara Tika Light (API38). Top dog HKN (Swara Tika) will want top dollar - GKP (Shaikan) recognizes that their SH crude will have much lower vlaue in any export blend.

How to reconcile these differing expectations with only an omnibus value of $16/bbl currently being floated?

The $16/bbl has to be taken in context / understood that it bears a certain relationship to the current price of oil.

In the event that crude prices fall back or collapse to between $50-$60/bbl then you can forget the $16.

In the event that the Ukraine ATACM missile issue continues to escalate , the price of crude could of course go through the roof.

Overly simplistic perhaps, but maybe they decided to hold back and retain the cash for any unforeseen PF-shutdown eventualities?

@putup,

an important issue that everyone here seems content to ignore is the Grade Stability that SOMO are intent on marketing.

SOMO want to market the historical Kirkuk Grade - a great deal of national pride is involved here.

High volumes of SH Heavy (14API - 17AP)I will play havoc with that desired grade stability and I believe that volumes of such heavy crudes (mainly SH and Atrush) into the Ceyhan pipeline will be limited. What cannot be accepted will be directed by SOMO to local consumers (refineries, power stations) whose buying prices are determined centrally.

****eye:

one difference between iraq and the uk is that when the masses (whose who strongly identify with one or other of the religeously-dominated groups) hear such numbers, their misunderstanding is magnified (deliberately) and all hel* breaks out on the streets.

Starsalign,

I believe the main difference is the rate at which Capex is returned to the contractors. I'm sure the current contractors would like to retain the very fast rate of return offered by the MNR PSC - but that won't be possible IMO.

All of these numbers have to be swallowed by the Iraqi public and the power lords of Baghdad.

Misunderstanding, deliberate or not, is and will be widespread.

Do not forget that all the KRI contractors have different cost structures - partly due to their business models but mostly(?) because of their formation drilling costs.

Example: DNO/Tawke has been a very successful exploiter of the shallow Cretaceous formation - using mostly horizontal drilling. Their well costs have been a fraction of GKP's and their drillling times have been very fast in comparison.

Shamaran and GKP have been concentrating on the much deeper Jurassic levels - longer and more expensive to drill, more technically challenging too, sour crude and lots of gas, HP kickbacks, major drilling fluid losses..

HKN (Swara Tika, Sarsang) have penetrated not only the Jurassic but also the Triassic and have a lot of much lighter and more valuable oil to show for it.

My point is, there will be a range of claims of "this is how much we need", and until SOMO and NOCo get access to all relevant data they appear to have made a stab at what they consider a good compromise number. This number, if acceptable to the various contractors, is conditional on final agreement being reached as to the actual costs involved - with corrections up/down being implied.

BSmonitor: I generally include a question mark on items that can be debated or questioned. The pipeline costs I gave, for example, do not include the Atrush-Shaikan - blend station - main tie-in point -pipeline to FK. Although much shorter than the Kirkuk-Ceyhan line, these sections were installed and are run by greedy people and I expect that ca $3/bbl will be expected by them as their cut.

BSmonitor,

forgot to add: It's highly doubtful the state marketing authority SOMO will want 85,000bopd of Shaikan Heavy being put into the Ceyhan pipeline with other better grades. They want to offer a stable grade of, as near as possible, 32API.

I believe SOMO will want some SH crude sent to local refineries such as Baiji, KAR.

BSmonitor,

did you see the question mark? There are 2 pipelines to be paid for - the one to Ceyhan and the one from Atrush-Shaikan fields.

The $16/bbl is also not set in stone - this will be field-specific, or more correctly expressed, will be field development plan specific, and will incorporate the Risk Element estimated for the particular field.

Also, the Kurd PSC will be scrapped and brought into line with the new Iraq Revenue Sharing Contract - that means the calculation parameters for CO and PO recovery that you have assumed to reach such a figure go out the window. From what I hear, the payment of Iraq Tax is also on the cards.

$16/bbl to include all production and transportation costs.

New BOTAS Tarif needed for new 2025 Pipeline Agreement - the historical tarif was far too low, we need to assume a higher tarif of $5/bbl ?

$16 - $5 = $11/bbl to cover ALL production costs - that means Profit Oil and Capex Recovery (Cost Oil).

If the board truly believe this, why are they not piling in and buying as many as they can?

The Q is somewhat philosophical, as I believe the board understand very well just how sensitive the market rating (SP) will remain until the export pipeline- and revised production contracts issues are settled.

Put your money where your mouth is...

So, the KRG continues to receive heavy howizers from the US - a legacy from the days when Peshmerga were fighting ISIS.

Ex- Iraq iParliament Speaker Mohammed al-Halbousi recently highlighted the dangers of the KRI's "going it alone" activities, noting that KRG is responsible for internal security but that external security, incl the configuration and use of miltary assets other than for internal use, remains the responsibility of the central government.

As the US forces withdraw completely next year, how will Baghdad bend Erbil to their will, to accept that they are just a region? This has already started with the Oil File.

The idea that Iraqi forces turn tail and vanish when the going gets tough might appeal to simple minds on this board, but Baghdad has modern, advanced weapons that the Peshmerga still do not have and it would be unwise for Erbil to provoke too much.

Would the US want to get involved in an internal spat between the Kurds and the central gov? I don't think so.

In the event that Iranian proxies in Iraq continue to contribute to attacks on Israel from the Nineveh Plains, with Israel responding in kind, the whole raft of issues will continue to boil. Targeted attacks on foreign (not limited to US) assets would then be a distinct possibility. The overflying of Iraqi territory by foreign warplanes is an affront to the sovereign nation of Iraq and cannot go on with some sort of reaction - 2 wrongs don't make a right.

It's not a good place in which to be invested at the moment.