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Rog
I agree more patience is still needed & we appear to be slowly edging towards a resolution.
In the meantime I have calculated what I believe our monthly net current cash generation is as follows:
30,000 BOPD x 36% (GKP net share) x 30 days x $30 = $9.72m
Monthly cash outgoings $6m (as recently reported)
Estimated net cash generation $3.72m
This can be flexed according to your view of BOPD & the price of oil.
The reported cash position at 20th March was $86m.
Accordingly we should have approximately $100m in cash in about 6 months time.
Until we have a final resolution of all outstanding issues & given the risks associated with supplying into the local market it would be imprudent & far too early to re-commence distributions either via buy backs or dividends.
At a price per barrel of $25 & 30,000 BOPD the above calculation produces net cash generation of $2.1m per month.
The company has told us break-even is a touch over 22,000 BOPD & I would therefore imagine if we dropped below this it would be a reportable event.
All in all far from a disaster.
Despite some optimistic talk of buy backs & dividends I simply can't see the board contemplating this until everything has been resolved.
The most significant information in the RNS, in my opinion, is the excellent management of cash.
Accounts payable have reduced from $44.1m at 31st December 2022 to $26.0m at 31st December 2023 to approximately half the 2023 year end figure currently i.e. c.$13.0m.
This has been achieved whilst slightly increasing the cash balance without debt.
At the current level of local sales (nearly double break-even), a very considerable reduction in accounts payable & lower monthly outgoings (under $6m per month) the prospects for near term cash generation are positive.
All, of course, subject to maintaining the current level of local sales.
Obviously the company is still facing considerable challenges but appears to have coped admirably since the closure of the pipeline.
It is obviously very frustrating. Unfortunately when you have multiple parties, all with their own vested interests, in attempting to arrive at an acceptable long term agreeement for all it is going to take time. Much more time than we would all like. However, compromises will eventually be made as ultimately it is in everyone's interest to reach an agreement. More patience required.
This is indeed a very disappointing situation.
A company that produced 50,000+ BOPD, got paid on time & with GKP's cost of production & reserves in a stable environment would be worth many multiples of today's market cap.
Unfortunately that is not the case & therefore makes GKP a high risk - potentially high reward gamble.
If (a big if) the many hurdles can be overcome then GKP could have an excellent future.
If the local sales are maintained at the current levels & payment is received in advance then it would appear that GKP has enough cash to survive indefinitely.
It is also understandable that the company cannot give any reassurance about the continuance of the local sales as these are obviously being made on an ad hoc basis and could stop at any time.
How long it will take for everything to be resolved, if ever, is the significant unknown & massive risk.
I expect there will be a few more 'bumps in the road' before everything becomes clear.
Hopefully the potential benefits to all will drive a sensible resolution but it could take a considerable time.
Very frustrating.
If THG got to £2 I would estimate the Kelso share price would be around 4.7p if they haven't invested the cash. If they have invested the £3m cash & got a return on that investment this could be reflected in the share price & so could be above 4.7p.
Just my rough calculation & takes no account of sentiment.
There isn't that much of a discount. Following the placing there are another 120 million shares in issue, not the 197 million shown on this site. Add the 5m shares in THG to the profit on the CFD & £3m in cash = the approximate market cap on 317 million shares at the current price.
Note the point about customer accounts, but won't Metro still make a contribution from each account?
Still trying to calculate an alternative value based on the number of customers/customer accounts.
Is this valid?
Any thoughts?
Metro Bank has a stated 2.8 million customers. If each customer was valued at say £100 then the market capitalisation would be £280m which is a considerable increase over the current value of approximately £200m. This would suggest that Metro is potentially undervalued. Obviously the unknown element is whether another bank would contemplate taking over Metro for its customer base and perhaps more importantly at what price per customer.
Although the news was not good perhaps it wasn't as bad as expected?
In 1974 the top rate of income tax was 83%. In addition there was a 15% investment income surcharge making a total charge of 98% on unearned income. Many wealthy individuals with high investment income left the country as tax exiles.
Dave you do realise that if you own 20 million shares you have over 3% of the total share capital & as such should formally disclose this holding.