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As for dividends (or buybacks), yes maybe they pay out a little of their excess capital. “But the hint is in the words "pay out" - the value of the company decreases when funds are paid out and all else being equal the market cap reduces accordingly.”
Ah yes PUTUP but the market is not entirely cold blooded. Even the most sanguine accountant would see some value in the sentiment of capital returns, through dividends or buybacks.
As I said to you previously I now favour a buyback. The share price is low enough to offer the prospect of value accretion through capital expenditure in that direction (unlike previous occasions).
PUTUP I now agree that buybacks at this (low) point would would be a welcome initiative towards some share price recovery. Surely value accetive at this level. $25m would be enough to spark the apothecary’s magic. And let’s face it, if the company is doomed we will never see that cash anyway.
Buybacks and then a positive statement from AKIPUR on the ITP would bring springtime sunshine, like the clocks going forward in Wales.
PUTUP, theoryman, Bigdog across the road, and a few others provide realistic views and analysis (a little too unvarnished in Bigdog’s case).
Don’t get offended just because they’re not waving “takeover tomorrow” flags. There are severe risks here, pointing them out with a purposeful sense of realism should be accepted without faux indignation.
PUTUP I agree that buybacks would now be a positive step. Surely value accretive at this hollowed out cost and a strong signal of business longevity.
Some of the cash in hand would be well used. In the present state of things we will not see it being returned to us any other way.
I’m not a share buyback fan unless they are likely to be value accretive. There seems nothing to lose here. Buy the shares. Or lose the capital anyway if hope drains away.
RNS
No surprises. With local sales, treading water financially.
Debt slightly reduced (could/should have done more imo)
Morocco/Somaliland continue to progress at glacial speed.
Bina Bawi court hearing set for 2 weeks in February. The KRG has a history of fighting hopeless cases (see Dana £2b successful action for the same sort of thing).
BUT, here’s the big point, talks on ITP have seemingly made dramatic progress in the past few days (outside scope of today’s RNS, hence yesterday’s dramatic sp rise).
So fingers x’d.
PUTUP yes those are the immediate questions which have cratered the sp., but are the culmination of payment defaults extending, on and off, for several years.
I mentioned the debt-free status because it gives the company intrinsic strength to weather a storm which all-but wiped out shareholders in 2016.
I see the sp rallied late in today’s session. I’m hoping the professionals have sniffed good news before it gets down to our level.
PUTUP I agree with your sanguine analysis.
Baghdad cannot immediately cancel the IOC contracts in N Iraq, to do so would lead to stultifying legal proceedings and damage its reputation even further.
In the long term they will want SOMO controlled consolidations. And with it, contracts to their liking.
In the meantime I think the IOCs will get paid, but maybe not everything. How much is a calculated gamble from our point of view.
The company is debt free. It can produce 55k bopd and the pipeline will re-open. Soon.
This news should, I think, create a relief rally on Monday. Good for those brave souls who bought the lows last week.
Bravery which may however be further tested as KRG liability for the $6b debt pile owed to Vitol, DNO, GKP, Genel, Shamaran etc is debated.
Fingers firmly crossed, hopefully the KRG aren’t just waving two of them at the IOCs.
Opu spouting rubbish again, after another 10 dollar top-up presumably.
Iraq exports only 75k bopd through the pipeline to Ceyhan. The rest of Iraq’s circa 4m bopd goes through Basra.
KRG sends its entire 400k through the shut-in pipeline.
So the loss is shouldered almost entirely by KRG.
Plus, who do you think holds the budget purse strings?
There will however be some pressure on Baghdad to resolve this impasse, but they seem to have played their hand deftly thus far.
PUTUP thanks for the calculations.
But you must admit that further share-buybacks, as called for on numerous occasions by yourself, would now be proved to have been utterly disastrous.
We have had on huge dividends, invested sensibly elsewhere, to ease the pain of the slow, now steep, share crash.
As I pointed out previously, share buybacks are value accretive device for solid blue chip companies. Not this one.
Anyway enough of the I told you so’s. I agree with you in all other respects. Particularly the question of arrears payments for which the KRG may not have any incentive now, and certainly not the means, at present.
But at least the company has no debt overhang to bring it to its knees now, unlike 2016.
https://www.rudaw.net/english/middleeast/iraq/26032023
Rudaw claims Baghdad and Erbil have agreed oil exports through Cayhan will resume "in a day or two" with KRG continuing to sell its oil until federal budget law is passed, then the mechanisms set within budget law will be used to resolve this issue.
"We will definitely reach an appropriate solution with Baghdad and this issue will end."
When?
Soon.
Either through a collapse of the KRG or agreement on the national budget, oil revenues and IOC contracts.
It’s too late to sell.
At least, as PUTUP says, the shares are worth a quid using banked cash. But keep an eye on the b.o.d. fleeing with bulging suitcases.
Alliance News
Gulf Keystone Petroleum said that higher oil price and production allowed it to generate "record" profitability in 2022. The Iraq-focused oil field operator posted a pretax profit of USD265.8 million in 2022, up from USD163.7 million in 2021. Revenue for the year totalled USD460.1 million, up from USD301.4 million the year prior, as the company's average realised price per barrel jumped 49% to USD74.1 from USD49.7 the year prior. Gross average production for 2022 totalled 44,202 barrels of oil per day, up from 43,440 bopd in 2021 and in-line with annual guidance.
I don’t usually indulge in pumping up the prices forecast but will allow myself the liberty on this occasion in light of the excellent RNS;
Increased Field Reserves,
Final $25m dividend totalling $50m for year with possibility of further shareholder distributions (if the KRG behave thenselves),
Recent production in excess 53000 bopd,
Recent narrowing of KBT discount,
Production to increase towards long heralded 85,000 bopd (if the KRG behave themselves),
If this doesn’t reverse the depressing share price trend I’ll have to give up and invest (what’s left) in a mom’s and pops general tracker.
Alliance News;
Crystal Amber Fund Ltd - London-listed activist investor - Net asset value per share at December 31 falls 9.2% to 130.05 pence from 143.19p a year prior. Total return is positive 4.4%, reflecting total dividend payments of 20 pence per share during the six months. Looking ahead, expects that Hurricane Energy PLC will be successfully sold. Hurricane is the owner and operator of Lancaster field offshore Shetland, in which Crystal Amber Fund is an investor.
senseman’s message has a clear message. I don’t usually bother voting but I’ll put my 600k in the No box in some personal recognition of his work. I understand his angst. Perhaps I will eventually recover my 9.5p per share.
Regarding tax. My shares are in an ISA. Surely any post-takeover payments will be sent to the same account and therefore tax free?