Courtesy Oil Investor12 Jan 2018 12:03
on ADVFN
was a reply to Broadford Bay
"Broadford Bay: I am inclined to agree with GKPhero in that �we will soon have more money in the bank than our current market cap�.
You usefully derive a figure of $194 million as at 31 March 2018.
On an accrued basis it wouid be more, because the most recent payment from the MNR as announced in the 21 December 2017 RNS was for the September 2017 Shaikan production. By the end of March, GKP would have produced oil for a further six months. I think you have assumed that four cash payments would have been received by then, hence your $48m figure ($12m net per month x 4 months).
If we include the other two months - noting that you have included the corresponding expenditure entry - there would be a further $24 million �due�.
In conventional P/L accrual accounting that revenue would be included. So your figure of c. $194 million then becomes $218 million, although not all of that would actually be in the bank.
In addition there are the other amounts which GKP have said are payable by the MNR and which GKP have quite often published and updated.
These relate to (a) the unrecognised revenue arrears and (b) the MNR Government Participation back costs.
These were stated by GKP to be $25 million and $71 million respectively, as at 31 December 2016, being a total of $96 million.
Adding that figure onto the $218 million figure above, we get $314 million before any possible entries �the opposite way� are included.
This massive figure excludes the amount due to GKP, going forward, under the Shaikan PSC Cost Recovery facility. As you know the rate at which the enormous Cost Recovery sum, due to GKP for the building of the production wells, PF-1 and PF-2 (the facilities are paid for by GKP and MOL, but they are owned by the MNR, so the money is repaid by the MNR) depends upon the oil price.
The higher the oil price, the faster the money is repaid. Hundreds of millions of dollars are involved.
Jon Ferrier told Mees Magazine, exactly one year ago, that connecting Shaikan to the pipeline was his #1 priority for 2017. The 36-inch diameter 750,000 bopd capacity feeder pipe from Shaikan to KPS2 on the main export pipeline is currently carrying 27,000 bopd of Atrush crude. It is reported on Twitter that Shaikan is currently being connected to the feeder pipe. That was in any case the public domain position, as announced by ShaMaran: the 36-inch feeder pipe was built to carry Atrush, Swara Tika and Shaikan crude. In my opinion achieving the pipeline connection is potentially a key. Whether GKP will be operator going forward, or someone else, who knows? So we wait."
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