Member Info for CaneToad

Guys, guys guys. While I think this will eventually resolve itself, it is without a doubt, very serious. You just have to read the wording:

"the Iraqi Oil Ministry is permitted to pursue nullification of any contracts entered into by the KRG with foreign states and companies for the exploration, production, export and sale of crude oil from the Kurdistan region."

That will scare the market. It already has with Forza Petroleum and it's probably going to impact us. Any discussion about buybacks now is premature and a pointless waste of time.

guys - it's all second-order.

If it resolves as we'd like, the valuation will double. If it doesn't the valuation will halve or worse. I'm not worried about a 7% divi or the technicality of a buyback. It's not the thing to worry about at the moment.

I agree that the mostly likely outcome (75% in my view) is that this is good in the **long-term** for the valuation. What happens in the short-term is the question though. Clearly it will not be good. As Forza (the only company that has made a statement) has dropped 20% on the day that it commented on the issue.

I like the divis, but I like even more that the company has plenty of cash in times like this.

Forza now down 20% after their announcement re: Kurdistan.

Seriously. Buybacks are the least of our concerns. The most important/pressing issue is to resolve the issue of the leases. I would be for cancelling the divi and conserving the cash. Forza (a Canadian operator in Kurdistan) is the only company that has issued a statement - and that caused an immediate 10% drop to its share price. I think this issue will eventually be resolved, but in the meantime, it's most likely to cause an even heavier drag to the share price.

I have a large'ish holding in GKP.

I'm beginning to think it's cum-ex related. More news today from Germany who insists that there will be criminal charges; read fines.

10% down within 15-minutes of the open. I guess GENL and GKP thought it wiser not to say anything...

@jono: Had a look at AXL. Thanks.

Looks overpriced compared to UOG and SENX, with roughly similar production; lots of upside in UOG - *IF* they can stabilise/increase production.

https://www.forzapetroleum.com/data/news/2022-02-17-Iraqi-Supreme-Court-Judgment.pdf

@jono: thanks for the tip. I'll look into it.

FYI: my mention of £50m cap/1,000 boepd is from the recent Zac Mir intervew. I thought it was a bit far-fetched. Not balming the guy - I like his interviews and I understand that he's trying to market the company.

@CCC: Thanks for the post. It took me a while to find it, so here's the link for others.

To my naive eye, this looks like Iraq wants to nogotiate with the Kurds and doesn't want trouble. In the short-term, I see no change. In the medium-long-term it could cause a significant upwards revaluation of all Kurdish oil producers.

Disclaimer: I have a large position in GKP. Do your own research - I could be 100% wrong.

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IRAQI PM ASKS OIL MINISTER TO REACH SOLUTION ON KRG OIL ISSUE
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http://www.nrttv.com/EN/detail6/2591
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SULAIMANI — Iraqi Prime Minister Mustafa al-Kadhimi asked the country’s oil minister, Ihsan Abdul-Jabbar, to find a solution to the Kurdistan Region’s oil issue in a meeting of the Council of Ministers on Wednesday (February 16), according to a statement from the council.

Kadhimi requested Abdul-Jabbar meet and cooperate with the Kurdistan Regional Government (KRG) to reach a resolution, a day after the Iraqi Federal Supreme Court issued a verdict on the KRG’s law on oil and gas sales.

The nation’s top court ruled the KRG’s independent sale of oil and natural gas was against the Iraqi constitution.

An NRT reporter said on Tuesday the supreme court required the KRG to allow the Iraqi Ministry of Oil and the Federal Supervisory Board to investigate and supervise all of the KRG’s natural gas and oil contracts.
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@CHRI55: "Also if @Cane is interested, she's a good un"

Yeah mate, I'm already in here, though only a small position - underwater atm and hanging back until I see the the shorts decrease or the downward trend broken.

@O2B@C, IGEEK: Petro Matad and Deltic are very different fish. They're explorers. The challenge that I offered was to give me the name of a UK company producing 1,000 boepd that has a market cap of £50m. I don't think there are any.

The closest company to UOG is Serinus Energy, which has exactly the same problem as UOG - inconsistent/falling production. The market hates that. I think both are undervalued, *if* they can stabilise and/or add more production. I think it's likely (~75% chance) they both will, but the market will only react once it's happened.

UOG needs to get its costs down though; the management are paid a ridiculous amount of money; especially BL. I don't mind paying for *performance*, i.e. meeting targets, but not when production has declined.

I wonder if one of the majors (already producing in Iraq), could make an offer for GKP. Best do it before the prices double - all of the Kurdistan operators have ridiculously low valuations.

If PSCs with the KRG are grandfathered into new agreements directly with the Iraqi government, this could see a *significant* upward revaluation of the Kurdistan oil producers. The Iraqi government is actively trying to attract and retain oil producers and I doubt they're going to want to frighten away those from Kurdistan.

Brilliant video. Gave me a much better picture of the operation.

@Insider: "I have been correct 100% of the time I have predicted arb collapse so.. ask yourself why."

Simple. BTC dropped. Once it recovers and the ARB funding situation is clear, it's gonna fly. I'll invest more at that time. In the meantime, I'll trade energy stocks.

I agree, there seems to be some decent support around 134. Bounced strongly both Friday and Today back to that region, testing 131p each time. Spent the past hour looking at the fundamentals of this again and I can't see anything alarming, apart from the obvious underperformance. I cannot see any hint of solvency issues though; they look very solid in that regard and have an investment grade debt rating.

The increase from 2020 ($7.1m) to 2021 ($8.5m) is about 20%. If they increase by 20% again, that would give revenue of $10.2m. Ordinarily, I'd say that a 20% increase is great, but considering how they're coming off the covid lows, it's a bit disappointing in my view.

Seems like they're not yet making anything significant from PFAS. I'll hang on, but will want to see good news before buying anything more here. At this rate of cash burn ($5.5m -> $3.2m in 6m), it seems that they'd be in need of cash within 6m. I'd like more transparency on why they're burning so much cash.

"I can't really see CPI going under or anything like that"

I don't know of any brokers or serious commentators who are saying there are solvency issues here. It's unsexy and the turn-around has been slow, but they've undoubtedly improved over the past 2y. The forward pe is now just 4.9. Unless the directors are lying (very unlikely), there are no solvency issues here. I'm hanging on and will add some more shares after hearing good news - ****hopefully**** in the next update or within 6m of that. I'm not in a hurry and I see good long-term upside here.