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Any move to a fixed amount per barrel is a mistake for Iraq. There's a material difference between capex, opex and a return for doing the work (aka until known as Profit Oil). The latter falls well within $8 per barrel. Opex has been $3-3.40 per barrel. Capex much higher still reflecting the development nature of the field. GKP makes no margin on the last two. They're merely the instrument of the KRG, consulting on and implementing an agreed plan (the FDP) on their behalf. The only risk they take with respect to field development is that in relation to being reimbursed for capex and opex and the extent to which it affects their Profit Oil stream.
Iraq would be foolish to move too far away from the present scheme. Under it they reap the lion's share of any value created (albeit they shoulder the lion's share of field development risk). GKP would be foolish to shoulder more of the risk of field development also.
The debate ought to centre around the (gross) 'profit' going to the IOCs for implementing the field development and operating the field - the Profit Oil component. As of our last regular receipt (September '22 production) this was $4.14 per barrel net to GKP or, more relevantly re the proposed $8, $6.73 per barrel to the Contractor (gross of the GKP CBC). Under the present PSC this is a variable number. It shifts higher as production shifts from Cost Oil to Profit Oil and shifts lower as more production is realised and the R Factor rises. But in general the margin is small (and from this margin the IOCs must cover their non-recoverable G&A expenses and GKP pays a CBC also).
If the IOCs are to really bear the risks around capex and opex (which a move to a fixed amount per barrel produced would do) then their required return would have to be much higher. Operating costs were circa $3-3.4 per barrel (one could figure out a more accurate figure within this range) and capex per barrel an amount on top of that. The IOCs would have to earn a margin on these costs, particularly capex given it is investment now for a future return. They'd also need much more freedom (since they bear risks) around the FDP.
Quite a bit to digest here. Looking at it I firmly think now it’s time for a change. I was personally never a fan of Colle Santo so will have to research the coming days in which side to vote for. Down about 60% here which isn’t as bad as other investors so there is light at the end of the tunnel.
More talk but this is funny, stop talking and just change the f*cking law then. “ He confirmed that the Iraqi government will “certainly” agree to an amendment in the law “because we are losing around 470 thousand barrels per day.”
………
“ Kurdish oil exports
The issue with resuming oil exports lies with the lack of an agreement between the Iraqi and Kurdish governments and international oil companies (IOCs) operating in the Kurdistan Region, specifically about the cost of production per barrel of oil, according to Sudani.
“In light of the legal article in the House of Representatives law, we must give companies the cost of producing each barrel, which is $8, while the cost of producing one barrel in their contracts with the Kurdistan Regional Government is $21,” he said.
“Who will pay this difference? Neither the Kurdistan Regional Government has the money nor can we violate the law. This is one of the problems faced by the budget law that was approved by the House of Representatives,” he added, clarifying that IOCs are waiting for the law to be amended to be able to begin oil exports.
He confirmed that the Iraqi government will “certainly” agree to an amendment in the law “because we are losing around 470 thousand barrels per day.”
Prior to the halt, about 400,000 barrels of oil were being exported daily by Erbil through the pipeline that runs to the Turkish port of Ceyhan, in addition to some 75,000 barrels from Kirkuk oil fields controlled by the Iraqi government.
According to the highly-contentious Iraqi federal budget passed in June, the KRG is obliged to sell 400,000 barrels of crude oil through Iraq’s national oil marketing body, alternatively Baghdad would use Kurdish oil domestically.
This operational and corporate update outlines a comprehensive strategy aimed at ensuring financial resilience and operational flexibility. The company demonstrates a commitment to preserving liquidity through measures such as maximizing local sales, stringent cost control, and active management of accounts payable. The fluctuation in sales volumes is acknowledged, attributed to increased competition in the region and seasonal effects on crude demand.
Financially, GKP exhibits strength with a healthy cash balance of $85 million, no debt, and the ability to cover estimated monthly costs comfortably. The company's emphasis on maintaining a monthly capex and cost run rate aligns with their prudent approach to financial management.
The update underscores optimism regarding the potential restart of pipeline exports, citing ongoing negotiations between the Kurdistan Regional Government and the Government of Iraq. Despite uncertainties in local market demand, GKP remains proactive in pursuing opportunities to increase sales.
Additionally, the board's commitment to diversity targets and the ongoing non-executive director search reflect a balanced approach to governance. The pace of this process is controlled to align with the company's current priorities of cost reduction and liquidity preservation.
In summary, Gulf Keystone Petroleum's analysis suggests a resilient and adaptable stance in navigating industry challenges, with a focus on financial stability, operational efficiency, and governance considerations.
That's all for now.
Holding a wee bit stock here has the voting taken place?
Any of these great assets will mean a huge price rerating with the shares in issue and current market cap. This will be a big company once the breaks are released.
https://www.share-talk.com/traders-cafe-with-zak-mir-the-week-in-small-caps-sunday-19th-march-2023/#:~:text=Ajax%20Resources%3A,to%20like%20with%20small%20caps
Took a punt last week added 500 squid today the CEO looks hungry
One tranche sold was mine
Disgraceful behavior by f&f
I am in for a big punt
“ The Company is pleased to announce that it has raised gross proceeds of GBP1million as result of the fundraising announced earlier today (the "Fundraising")
Very good well done Angus !
Zenith Energy takes Africa oilfield stakes from Chinese state giant
Zenith moves to consolidate its presence in Tunisia, says time is right to seek further acquisitions in Africa - and beyond
22 September 2020 10:38
By Barry Morgan
in Paris
Africa-focused Zenith Energy is set to expand its footprint on the continent after signing a deal to acquire asset stakes in Tunisia from a Chinese state-owned giant.
The junior has signed a conditional sales and purchase agreement with China National Petroleum Corporation (CNPC) to acquire a working interest in the North Kairouan permit and the Sidi El Kilani oilfield concession — with more asset deals potentially in the offing.
CNPC Tunisia currently holds a 22.5% stake in the asset alongside shares in the operating entity CTKCP and has agreed to sell this interest to Zenith for just $300,000.
Upon completion, Zenith’s working interest in Sidi El Kilani will yield material production of around 300 barrels of oil per day, in partnership with Tunisian state owned oil company ETAP.
Listed on the Oslo and London stock exchanges, Zenith has interests in Congo-Brazzaville, Italy and Tunisia, where it earlier acquired the 22.5% working interest held by the Kuwait Foreign Petroleum Exploration Company in the same Sidi El Kilani–North Kairouan acreage.
“We are currently exploring further possible acquisition opportunities with CNPC, which has a very interesting portfolio, in Africa and beyond,” a senior Zenith executive told Upstream.
“This is a time of opportunity for oil companies like Zenith to acquire quality oil and gas production assets on highly lucrative terms as they are divested by the oil majors,”
Zenith Energy Ltd. ("Zenith" or the "Company") (LSE:ZEN; OSE:ZENA-ME), the listed international oil & gas production company focused on pursuing African development opportunities, is pleased to announce that it has submitted a technical and commercial bid (the "Bid") with the Nigerian Department of Petroleum Resources ("DPR") for a marginal field in the 2020 Marginal Field Bid Round ("Bid Round").
Highroller as an investor who watches here but doesn’t post much it’s quite sad to see the posters who are not invested here however continue to bash the stock when they know that things are going well and the price is going to move up.
buys coming in now traders must know news for next week.......1p should be smashed soon to 1.5p.......
Point to positive flow IMHO
GLA
Yesterday’s poorly worded rns was the perfect buying opportunity IMO
RIsky might as well be the officiall rns as he gives better idea of what’s going on.
Either way not complaining yesterday those who brought stock in the 10a were very lucky.
Back up this goes,
Very sneaky by the market
GLA
Imagine selling out on the back of a vague rns just for risky to be right and flow results in next couple days
Mop up the shares I say