The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
that the company is not performing well; it is treading water.
The only thing that is doing well, and colouring your perception of "performance", is the crude oil price.
At least try to acknowledge that.
Be wary too when every "expert" calls $100+ crude for the next N years.
One additional well plus the debottlenecking/optimisation/stimulation of three other wells (SH-12/-13/-14).
...all for an additional output of what, 1,600bopd?
Or as DRB83 put it, the "insignificant issues" !
LOL
Leaving aside the dividend, the results were disappointing - flatlining performance and a sense of drifting. No further mention of the reworked wells' performance, FDP still up in the air, traces of water getting bigger now.
Only thing supporting it is the OP.
Dec 2016 rumour
Try again...
As published by The Jerusalem Post
https://www.jpost.com/international/article-715888
A series of rocket attacks on a gasfield in northern Iraq has sent the US contractors working on its expansion packing, dealing a blow to the Kurdish region's hopes of boosting its revenues and offering a small alternative to Russian gas.
A series of rocket attacks on a gasfield in northern Iraq has sent the US contractors working on its expansion packing, dealing a blow to the Kurdish region's hopes of boosting its revenues and offering a small alternative to Russian gas.
.
Uncertain future
Last year, the Kurdish government signed a contract with domestic energy company KAR Group to build a pipeline from Khor Mor via the regional capital Erbil to the city of Dohuk, close to the Turkish border, running parallel to an existing pipeline.
Delays could cost the debt-ridden Kurdistan Regional Government (KRG) a sizeable penalty and will leave Kurdish gas export plans on hold.
If the infrastructure is not ready by a May 2023 take-or-pay deadline, the Kurdish government will have to pay Dana Gas $40 million a month until it is ready, the government source said.
The setback to the gas plan comes at a time when the oil sector, the region's financial lifeline, is also in trouble.
Oil reserves are getting depleted at more than double the global average and a Federal Supreme Court ruling in February that deemed the legal foundations of the Kurdistan region's oil and gas sector to be unconstitutional, forced some foreign oil companies to leave.
Exclusive: Iraqi Kurdistan's oil output could halve without investment
The region's oil output has already slipped from about 468,000 bpd in 2019 to 445,000 last year and 434,000 in the first quarter of 2022, according to reports by Deloitte.
"The reason that the current oil production is going down is due to the inability of the ministry of natural resources to bring timely additional investment online to overcome the natural decline of 15% to 20% each year in production for each well," a source in the KRG said.
The Kurdish region has proven oil reserves of less than 3 billion barrels at most, based on the most optimistic forecast, according to the KRG source, only a tiny fraction of Iraq's overall proven reserves of more than 140 billion barrels.
"(Kurds) are living a dream and don't want to wake up," the KRG source said.
A slightly different take on it, and one which slates the Barzani crowd:
https://ekurd.net/iraq-threatens-legal-action-2022-08-25
BAGHDAD,— Iraq’s state-owned oil marketer SOMO has threatened fresh legal action against buyers of crude oil originating from the semi-autonomous Kurdistan region, according to a letter dated Aug. 23 seen by Reuters.
The letter is the latest in a series of moves by Iraq’s oil ministry to try to control oil revenue from the Kurdistan region.
...
..
Iraqi Kurdistan region considered as the most corrupted part of Iraq. According to watchdogs, Kurdish lawmakers and leaked documents billions of dollars are missing from oil revenues.
According to local and international analysts and watchdogs the lack of control mechanisms in Iraqi Kurdistan makes it a paradise for illegal financial activities by the Kurdish ruling leaders.
Iraqi Kurdistan-ruling Barzani clan, known as the “Kurdish oligarchs”, have been routinely accused by critics and observers of neptunism and amassing huge wealth from oil business for the family instead of serving the population.
Massoud Barzani, remains the most powerful leader in the shadow according to analysts. Massoud’s son Masrour is the Kurdistan region’s prime minister and his nephew Nechirvan Barzani is the president of Kurdistan.
"What a buyer would be wiling to pay for GKP" can only be someone's opinion.
What SNM paid is fact.
Why would you pay for unproven resources?
Have a look at what Total received for their Sarsang operation when they sold their 18% stake to Shamaran. in mid-2021.
That is the only recent and relevant price pointer we have.
You will be surprised at how little, expressed in $/bbl, it was.
Not counting expected revenues for June and July, Net cash as per today is approx. $120M.
From today’s Daily Telegraph:
Human sewage may be needed to fertilise crops as global sulphur shortage looms.
Sulphur production has dwindled as a result of the global move away from fossil fuels, a new study shows.
Human sewage may need to be repurposed to fertilise crops as the world moves away from fossil fuels, scientists have warned. University College London (UCL) has warned that a looming global sulphur shortage could dramatically cut the amount of phosphorus fertiliser available for farming, threatening global food supplies.
Currently, more than 80 per cent of the world’s sulphur supply comes as a byproduct of oil and natural gas production, both of which need to be “desulphurised” before use.
Sulphur is not only required for the production of phosphorus fertilisers, but also for extracting rare metals from ores essential for the switch to a green economy, such as cobalt and nickel which are used in high-performance lithium batteries.
Heh, toppy-uppy!
au contraire - I see a number of positives for GKP...but I also see a number of negatives.
As only the positives seem to get emphasised here, I'm very happy to point out some other things.
My dear chap,
you said "...will have ca. $250m in the bank."
You did not say "...will have $250m in cash and outstanding invoices."
You are sloppy with your numbers and inconsistent in your use of language.
"...nevertheless by the end of September GKP will have ca. $250m in the bank."
What on earth are you on about?
Assuming the May- and June Revenues are both received before end-Sept, the cash at bank will then amount to about $160M.
In the (unlikely) event that the July payment is received by 30th Sept, increase the sum to just over $200M.
TM,
I would say "obliged" equates to an instruction, wouldn't you?
Part #2 of the ruling stated:
the Federal Supreme Court has decided:
2. The regional government is obliged to hand over the entire oil production from oil fields in the Kurdistan Region and other areas from which the KRG Ministry of Natural Resources extracted oil and delivered it to the federal government, the Federal Ministry of Oil, and enable it to use its constitutional powers to explore, extract and export oil.
Part #4 of the ruling stated:
the Federal Supreme Court has decided:
4. Obliging the Kurdistan Regional Government to enable the Iraqi Ministry of Oil and the Federal Board of Supreme Audit
to review all oil contracts concluded with the Kurdistan Regional Government regarding the export and sale of oil and
gas for the purpose of auditing it and determining the financial rights of the Kurdistan Regional Government as a result of it and to determine the region's share of the general budget and in a way that ensures that the rights of citizens of the Kurdistan Region provinces are delivered from the federal general budget and not delayed after all paragraphs of this decision are implemented by the Kurdistan Regional Government. The Federal Government and the Federal Board of Supreme Audit have been notified.
At this moment we don't know just how front-loaded the FDP investment might be (how much will have to spent very early on vs how much later). We can be sure, however, that the Capex involved will be substantial - so I agree with Cookie that a substantial cash holding should be on hand when the FDP is announced. Even if the front loading is minimal then a nice cash holding will calm nerves when the sums involved are finally laid out.
All of your dividend- and free cash scenarios mentioned so far assume nice, stable outputs and omit the danger posed by a crash in crude prices - don't you think that should be mentioned as an important qualification? I certainly do.
Another thing not being mentioned is dealing with the gas issue; if the MNR decides that this has to be moved up the list of priorities then the rosy scenarios might evaporate.
I have the Bond Terms in front of me.
Clause #14 (Events of Default and Acceleration of the Bonds) details circumstances that could accelerate early repayment.
In view of the awaited Supreme Court ruling and expected or possible consequences, any one of the following could be relevant:
#14(e) Insolvency and Insolvency Proceedings,
#14(f) Creditor's Process,
#14(g) Unlawfulness,
#14(h) PSC Cancellation Event.
Bondholders worried about the expected Iraq Supreme Court ruling could easily pressurize the company into an early repayment.
The earlier than expected April payment might also result in a later than expected May payment.
Cash remaining in the business around 2nd August should be very interesting, especially if the May payment is delayed a little.
It shouldn't be forgotten that the first cargo of Kurdistan crude sold / sent to the USA wasn't unloaded at the Texas Refinery as contracted, remained offshore, and was finally sent to another country - only for the same thing to happen there, finally being transferred "at sea" with transponder turned off.
The support for Baghdad court action within the USA was enough to cause that.
There is a good and healthy for-and-against lobby in the Unites States and you shouldn't take complete support for Kurdish actions as guaranteed.
Some sort of foul compromise may well be on the cards.
@putup,
thanks - missed that Apr volume indicator!
Correlates nicely now.
The revenue generated cannot be reconciled with ca 46Mbopd output and with Apr Brent at $104.58.
Either output was much less - perhaps as little as 43Mbop.
Or the $/bbl SH discount applied has been increased.
Or one or more wells were offline for some time.