Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
at this price the dividend yield is 68%.
people say the market is never wrong but for that to be true you have to have the right calibre of investors who won't panic. this maybe a contrary view but i think the majority of shares are being held by private investors and their ****ting the bed has led to the huge drop in the share price. i'm not complaining as i now hold a reasonable amount of shares.
the key thing for me is that there has been no selling by the institutional investors as if there had been then they would have to notify the market. my understanding is that any increase or decrease which goes over or under a % needs to be reported.
prior to the pipeline being closed gkp was trading around the £3 mark which is ridiculous when you consider it was producing 50k bopd. this was mainly down to the fact that although gkp have a legal contract with the kurds, the iraq government believes it should have a say. the friction has kept large iis away from gkp.
what people need to bear in mind is that the court did not say the contracts were illegal but the fact that turkey had no right allowing kurdistan oil to flow through the pipeline without agreement from iraq government. the impasse between turkey and iraq has led to the pipeline closing and the position we find ourselves in. to be clear the uk courts have already rules that the contracts are legal.
now, this isn't great news for gkp at the moment but stop thinking short term and look at the bigger picture.
if and it is a big if iraq and turkey can come to an agreement and iraq and gkp can come to an agreement on the contracts even if it does mean giving a slightly bigger slice to iraq then what do you think will mean to this share price. the previous £3 will be peanuts to what gkp could be worth.
for me the big rewards are well worth the risk. at current price market cap is £200m. iraq will not be want to be seen as a pariah in the financial world so worst case they may buy gkp and pay us £250m to avoid any length legal battles.
as usual on aim put in only what you can lose as in this wild west people actually do lose all of it on a regular basis lol
atb and dyor
Https://www.gerceknews.com/amp/diplomacy/iraq-turkey-oil-flow-on-pause-awaiting-erdogans-october-visit-221468h
I guess we find out in a month.
Atb and dyor
Last week the company announces it has increased sales of oil from 5K to 23k meaning that the monthly expenditure was now covered from GKP share of the profits. The do gooders spread their FUD on here last week with the help of the Reuters article (courtesy of a writer from that great city renowned for its knowledge of finnancial matters - Bangalore) causing some PIs to sell. It was all bad news apparently and the market doesn't like it.
Today the market has had a change of heart but according to these do gooders the market is talking nonsense and we should listen to them.
As usual DYOR and ignore the FUD. I.m sure those who sold on Friday will also now join in hoping to get back in at a lower price :-)
@theoryman - I am not saying what KRG has done is right. All I'm saying is that we are getting paid. What I do see though is that GKP have a good relationship with KRG and have shown understanding for the late payment.
It's now time for KRG to reciprocate and help GKP liquidity issues by allowing GKP to keep the revenue from local sales and offset against the $150m.
I couldn't agree more Armasmaximilian.
Assuming we don't pay KRG their share and we increase sales to 40k bopd - this will bring in about $36m a month. $6m goes towards our monthly spend and say $5m to Mol that leaves $25m each month with the company. I don't think the market has taken any of this into account.
Even if production stays at 23K bopd - this is still $20m - less $6m monthly spend less $3m for Mol. Even this gives us a cash flow of $10m each month.
As long as we keep trucking we are in a good position.
For me the high reward here is well worth the high risk.
As usual DYOR,
The KRG are not our enemies and they have not stolen the $150m from us. That little thing where Turkey closed the pipe is the reason we have not been paid.
Look at the investor presentation KRG had paid us all money due up to august 2022. It’s unfair to say they have robbed us.
We won’t know for sure until we get the cash balance as at end of September but if it goes up by $10m assuming sales at 23k bopd then irrespective of whether the pipe opens or not the company will be making enough not to not worry about liquidity issues.
This is still high risk high reward scenario but I think short term we are okay as long as they can keep selling locally.
@Putup and Anfil - regarding our discussion on Friday about the revenue numbers. I've read the rules for calculating the GKP share and I agree your numbers do tie in with the profit sharing contract.
My confusion arose from the fact they managed to increase the cash balance to $82.1m from $80m by end of August which obviously is impossible because as the RNS states averages sales was 16K bopd for August and average price of $30. I recommend listening of the retail investor presentation from 34 minutes onwards , you will note that GKP have actually not paid KRG their share off the money as yet and this could explain the increase in the cash balance. It looks like while GKP are selling in the local market they are intending to keep the KRG share as well and offset against the $150m owed.
ATB to all shareholders.
PUTUP - "At 25k production and $30 per barrel GKP covers cash costs (+/- screwed down as they are) and makes about $1.6m"
EH? Read the RNS the average was 16K bopd for August. they only started shipping 23K bopd from 19th August - prior to that it was 13K bopd. Even with 16K bopd they ended with FCF of $2m. So roughly FCF is $4m per 800K bopd. This means we should have FCF of over $5m in September if average is 23K bopd.
Some selective reading going on here.
ATB to holders.
Next month GKP have FCF of $5.3m based on 23K bopd. If you listened to the presentation you will know they are going to try to increase to the maximum of 44K bopd via trucking. This will give them about $18m FCF per month.
Even if sales stay at 23K then they are still raking in $5.3m and equates to $60m a year.
A couple of months ago we had shutdown with no sight of opening and the price jumped around £1.10 and £1.30.
We are now a profitable company and the Markey thinks we are only worth 95p. Most of the damage has been caused by the Reuters article by one of their experts in Bangalore lol. I recommend you look up that individual on LinkedIn and see what her career pre Reuters.
There is no way about it nervous PIs have been robbed today.
Trucking and being profitable has negated the pipeline shutdown. The main risk is now how Baghdad will react. Can Baghdad stop the trucking? if you think yes then you should sell. In my opinion the international court only found that Turkey should have not allowed the oil to flow through the pipeline without agreement from Baghdad. The contracts are valid and Baghdad will make themselves a pariah within the international business community if they tried to cancel the contracts.
Going forward Baghdad needs to either put forward a more acceptable proposal to the IOCs or buy them. The IOCs have the valid contracts so even worse case scenario I see Baghdad would pay £500m to GKP when you consider they are losing $1bn a month.
As usual DYOR and good luck to all holders.
And yes I have bought more today. Time will tell if this was a genius or stupid move.
Reading some of these comments makes me wonder if we should have a mandatory courses before people invest.
Let's look at this in simple terms: free cash flow increased $2.1m by end of August. Average sale of oil in August was 16300 bopd. We know their monthly costs are $6m so if they ended up with $2.1m then we can work out that they got paid $8.1m for 16300 bopd. This means they are getting paid about $4m a month for about 8000 bopd.
They have told us that they are now selling 23100bopd. This means from next month they should get an additional $3.33m added to free cash flow.
This means from next month they will have free cash flow of $5.4m- which equates to about $60m+. If they increase local sales then we get more.
There is risk here but the company is now making money again - what is there not to like?
@JAdams500 -Seems to me you have selective reading.
They mentioned considering additional sources of liquidity under following condition:
While there appears to be significant local demand for Shaikan Field crude, volumes and prices remain difficult to predict
If sustainable local sales do not materialise and absent other revenue sources, GKP would take further actions to preserve liquidity
If you read the whole RNS you will see sales have increased from about 5k to 23k - so all good mate.
Key highlights:
Production & trucking operations started at PF-1 in July and expanded to include PF-2 in August to support increasing local sales:
1. c.4,900 bopd gross average sales for the period from 19 to 31 July increased to c.16,300 bopd for the period from 1 to 29 August
2. 1-18 August: c.12,100 bopd; 19-29 August: c.23,100 bopd
3. Cash balance of $82.1 million at 30 August 2023 with no debt
Let this sink in:
1. They have increased sales from 4900 bopd in July to 23100 bopd by end of August
2. They had $80m cash end of July - they now have $82.1m. The thing to note here is that the majority of the sales in August were at 12100 bopd. With costs covered around 12000 bopd any sales above is pure profit. They must be coming out with at least another $1.5m so they will have free cash flow about $3m as a minimum each month. If they manage to increase the sales then more profit.
Good news all around as far as I can tell.
Plenty to
Https://www.bloomberg.com/news/articles/2023-08-25/turkey-seeks-iraq-revenue-sharing-deal-to-restart-oil-exports?in_source=embedded-checkout-banner
Turks want KRG to pay the fine - some much for international court decisions lol. The ball is in iraqs court - time to forgive the fine and move on.
This is interesting:
Tawke output is currently averaging around 40,000 bopd, of which one-half is delivered to the Kurdistan Regional Government as its entitlement and the balance is sold to local trading companies
The half sent to KRG must be what’s being sent to SOMO. The fact KRG are not selling and keeping the cash shows cooperation with SOMO which will better for GKP in the long run even if our share is slightly diluted.
Look at it this way even if our share is halved we will still probably make $100m a year not bad for a company with mcap of 200m.
ATB
Https://www.arabnews.pk/node/2272041/middle-east
Let’s hope for some positive outcome.