Member Info for damofarl

Cerievans; I started my working career verifying payments for Brent options, which often contained 20 parties through the chain. Recall one moment when a Co, Drexel to mind, cornered the options, to the point where all the majors, including the one I worked for, strong armed them to relinquish, on the threat that one big profit would mean no business/profits for them again.

My concerns over DECs use is not of ignorance or fear, being fully aware of their value/impact, but just believing they should use such to guarantee costs/dividends at the minimum level and let the remainder ride.

The previously explained ability to lock in prices seemingly detached from spot prices (but above cost) is reassuring, albeit It does reinforce my concern that actually we are more reliant on DECs success in options mgmt than we are of field mgmt, cost efficiency/economies of scale mgmt in their own right.

Still a fan, just my unstinting belief dented somewhat by the manner of the listing.

Good luck to holders

Not looking like a multi bagger today....

Highlander1970; spot on again.

If there was certainty, I'd happily sit here, without any improvement in production/oil price, knowing that it will only take 6 years of such certainty until the full mkt cap was realised. As it is, we have neither growth or certainty.

Putup; it's precisely because the KRG probably don't care about GKP's small portion of pie why we should diversify. They can have any company produce their large slice for a small slice.

Oppyuppy doubtless would want more dividends, I'd rather we took that small but not insignificant uncertain slice of pie and used it to generate more slices......

Cerievans; I think your Brent options experience is totally relevant to gas, as is your post.

A quick glance shows that averaging over that 18 months $3 is attainable, which is well in excess of the price attained in 2021 which was more than fine to sustain, indeed raise, the dividends then.

Really helpful.

Minusbat; you pose an interesting question with what is the exit strategy, one I'm pondering too, albeit I don't think it is near plateauing. I think there is much value still to be realised here.

And I say that as someone who is primarily a yield investor albeit with a contrarian value bent.

Having read the recent results, the following come to mind -

Cash at hand plus BGEO stake are greater than market cap, disregarding other investments and the remaining 20% of the sold water business.

Most of the businesses are generating dividends, yes driven by BGEO, but my rough calculation put them as an effective 3% yield on mkt cap.

The ongoing BGEO buyback means they are selling down their stake, but only because it is rising but they are quite specific about retaining around 19%, which I like as believe there is more value in BGEO itself particularly as a yielder.

So I'm no clearer than you as to an exit. I think the nature of the beast means it will never pay a dividend (which I'd prefer to the buybacks here), but I can see , would quite like Ike to see, it morphing into a kind of investment trust holding minority stakes in private equity stocks it backed and floated, which like BGEO could grow and be more positive about dividends.

I don't really see the Ukraine resolution as being a consideration - if anything Georgia as a a country (and BGEO specifically) must have benefitted from inflows of capital from Russians able to seek a relatively speaking more stable governance.

There is still a large discount to NAV here, and despite rising 10% in a month, I don't think I'll form an exit strategy until this has risen another 20%, be that a month or a year.

Said before, but thanks for the quality of posts on here today, irrespective of standpoint. Great to see such a disparate range of considered researched viewpoints in tandem with an absence of personalisation.

Such contributions are so so helpful. And I thank you all.

Highlander1970; post of the year so far that. Short, sharp, accurate

Legache;.............."Most investors act on what is, not what may be. A proper CPR would be good news."

Most investors/the SP is acting on what is - pedestrian production.

Looking again at the numbers, the presentation mentions $64mill due for 2022 oil. If we say thats $16 mill a month that shows the reducing impact of the fulfilled override and reducing production. That extrapolates to rceipts of $192mill for 2023. Lack of diversity/KRG politics and pymt delays aside, not a bad place to be.

What does a new CPR amount to? Didly squat really, as investors here are already confident of the potential.

I'm not confident of them delivering that growth
potential.

Irrespective of any Mobil news (which obv isn't settled as would have been RNSd), the underlying assets should deliver a positive update. Interesting to see any impact on volumes of theft crackdown efforts, and the pipeline. If only business as usual could see a small divvy increase here.

Put up; ,...."It is perhaps unsurprising, given very limited production growth yoy, that there's been no rush to let the Contractor have a long leash."

Interesting thought that, that did make me think very much is it the chicken or the egg .

As you say, why would the KRG give GKP a long leash based on pretty much constant (not rising) production. One could equally ask, have GKP not increased production significantly because of lack of ability, or diligent mgmt of the uncertainty that the lack of a long leash brings.

Personally, I think the KRG have more to gain, by granting that long leash, not least because they aren't paying upfront, than GKP.

It's continual absence, suggests less about the politics/validity of authority in the region, to me, than KRGs belief that GKP aren't upto the job.

Broomtree; yes it did, drop and recover; I ignore the gyrations too.

And yes, the business model is complex (niche, clever), and that may concern many. That doesn't overly concern me, but that model needs astute attentive focused foreward thinking mgmt. The recent issue raises concerns over the surefootedness of such mgmt to deliver that model, as promised.

Andy144; thanks your excellent contributions recently, which I agree with wholesale.

I totally agree that a second issue, of a never to be repeated issue, was an unforgivable mgmt decision. My first thought on announcement was that they must have had a too good to be true oppurtunity to acquire assets, hence speed. My more considered view was, variously, if the Co is so cash flow/earnings/profit positive, and the acquisition so accretive, why it wasn't purchased from existing cash/credit lines, why a new credit line wasn't arranged backed by the new assets/wider DEC assets.

To those newly looking at current headline yield, it does make it look a bit of a basket case, as does previous eye catching hedging costs/losses (albeit that looks to deliver an equally eye catching gain this time).

I've long been a fan of DEC, but this raise was out of step with DECs normal sure footedness. That, along , with to me, the excess use of hedging has made me examine my investment belief here, and seemingly, looking at the SP reaction many others. The question I am asking myself is, is this a fleet of foot gas producer that hedges to protect margins or a financial trading product backed by gas production. Some might say what does it matter, if it produces the profits.

The mgmt backtrack was unforgivable. The apparent need for speed to acquire, highlighted long suppressed concerns that effectively this is a grown up listed pyramid scheme (replace the new investors with new acquisitions), and that this acquisition was desperately needed to reinforce it's house of cards rather than being able to stand alone on it's existing assets.

Tag57; welcome

US Midstreams. You raise a good point, that for brevity I didn't cover previously when mentioning them. Yes, sadly is the quick answer. About 2 years ago some of these were yielding 12 to 15% so took the deduction on the chin, believing they would still yield around 8% with a potential uplift after tax, which isn't sheltered even within a SIPP on the LP versions. I now have no LP versions, partly for the reason you mention, but mainly because they appreciated SP wise and I sold the value realisation (SHLX amongst others was taken back in house by Shell). Yes do avoid the LP versions, because you can't avoid the chunky tax deduction, and look for those that aren't LPs. An example is Antero Midstream (AM) (not to be confused with AR from which it was spun off and is contracted too) which has zero deduction in a SIPP. Hope this helps.

But thinking about your question, maybe suggesting midstream wasn't a good idea as the tax deducted versions are few now, so their attractiveness is less, albeit there are still many LP versions that after deduction yield 7% - which whilst not insignificant, doesn't meet the point of being here (FAIR etc), the discussion here, of 10%ish yields.

Good luck whatever you choose. If it's here, my no 1 caveat would be, not for a trade or short term, think 5 years plus.

I do think the optimum window for us Midstreams was about 18 months ago, when even after taxes 10% could be garnered.

Agricore; yes I definately think a softer landing, and that is reflected in that NAV uplift. FAIR themselves have long been saying slightly higher defaults expected albeit lower than planned for, and below their expectation, and low against historical rates. To be fair it has been dropping slowly but surely for a while (NAV), but I think this is because these sort of investments, even more so than mainstream stocks/markets, are pricing eventualities well ahead. Having priced in a harder environment than has materialised, the income is materialising without the drag of defaults (previously priced in), hence the uplift in NAV. As such agree with you totally, that that income received, and lesser quality underlying loans themselves, are being recycled into longer/higher quality yield.

I feel very comfortable about their mgmt of such here.

Whilst ordinarily not a fan of buybacks, interesting to note that FAIR's buybacks have been at an 8% discount to current SP, and a 25% discount to NAV, which I have to concede, seems to be enhancing both too.

Really looking forward to next update, and yes where is the divvy announcement? Be interested in their commentary (once deciphered!), and particularly interest in flows, cash at hand, confidence in dividend cover.

As an aside, I think how the realisation shares are performing demonstrates your point - they seem to be doing well precisely because they are not reinvesting /recycling (for continuance of income/yield), hence are receiving income unencumbered to rundown unencumbered by potential loss.

Hi scandiexpat; what was the jist of the call? And are you suggesting the presenter(s) was a bit dry/robotic. Anything of note that wasn't in the preceding excellent investor update?

I'm waiting for the conclusion of consultation - whilst some kind of realisation share would give a spread/fee free out where NAV discount/value could be collected over a couple of years I'm sort of, of the mind, to carry on as is, delivering a 10% yield with a NAV discount to comfort future volatility.

My first CLO type stock, and all things considered, my best.

Whilst we await the divvy/January factsheet, I revisited the December factsheet.

I feel the level, regularity of updates/reporting in this arena is exemplary. Don't get me wrong I don't understand 70% of it, the technicalities are WAY above my head. But there is much to be understood, learnt. For instance, I note the preponderance here of loans in the B quality rated area, and I only mention this because in BGLF's recent update (and I do consider them the creme de la creme in this area), they highlighted, whilst positive generally, they highlighted a heightened default rate in B and below rated loans, in which FAIR is predominated, albeit FAIR has stated a lower than expected default rate. Also in FAIR'S factsheet the income yield on some of FAIR's loans are astronomical, frequently 20 upto 30% , and an outline of whom some of those loans ultimately are to. Those company's include Virgin Media, Ineos, and Refresco (think Ben Shaw's pop/every supermarkets own brand pop), so not exactly obscure small struggling companies. My quick calcs showed their income yield was about 2% above what we receive as investor yield. Indeed, I noted a seperate statutory declaration on distributions that showed the distributions were less than income received, which reassured me greatly that dividend was earned rather than churned. Also, interestingly I thought, they referred to the use of buybacks to reduce the NAV discount, to PAR. Irrespective of my dislike of buybacks, that statement, 'to PAR' instills confidence in me that they believe this discount is true based on current considerations.

I think that is quite some statement of the validity of value, certainty of continuance of yield, considering it is on the back of the last three years of COVID/Ukraine/rate rise uncertainty and volatility.

Quiggers; base seem to have good relations and have extended the field life twice recently, so another year extension not impossible, but ultimately it is a depleting/diminishing return/resource from that field. I personally think you are looking at this the wrong way..if you think the mine is an imminent dodo, the cash at hand and income to current expiry equals the market cap, so arguably if Toliara is a failure/no go, the worst you could expect as an investor is your money back.

If Toliara is a go, the SP appreciation will be enriching long term as will the income (dividend) stream.

Effectively, I believe this is a no lose bet, with the only consideration being that dividends will be minimised/nullified in that transitory period from one mine closing to the other opening, indeed I feel we will see that in the next, and subsequent dividends (or not). I may sound negative on BSE, I am far from. I believe that Toliara will be a golden goose, that you will have to wait patiently to pluck.

He's not getting 10% yield a year either.....