The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
CCC thanks for the Washington institute article and congratulations on your well-executed exit.
Baghdad’s failure to cough up the KRG’s monthly budget allowance and consequent delay in IOC payments means a return to the old mantra “it’s all about the payments”. We’ve seen this so many times before. History repeats itself but the results are never exactly the same. There are so many wide ranging interests at stake, a compromise must be reached.
PISTUP has been doggedly arguing for buybacks ever since he first showed up here (quite recently).
As has been pointed out previously by myself and others it makes no sense to buyback shares unless the BOD can be sure that the company is undervalued. The last $50m buyback in 2019-20 was done at £2.07p average. Where are we now?
Tax efficiency? Yes income tax is payable on dividends unless held in an ISA. But buybacks, if successful, will increase the residual share pool value with a consequent possible CGT liability.
He is a pompous arrogant fool. But despite that I agree with him that an invasion of Ukraine will be an ill wind that brings nobody any good. It’s immediate effect would be an oil price spike, but quickly followed by the demand destruction inevitable in business disorder.
The Iraqi Supreme Court judgement on KRG oil contracts? The market doesn’t like the perceived uncertainty and so the bears will be in ascendancy until there is some rapprochement. These things can drag on for years. But the KRG needs the IOCs in it’s long term quest for independence and, in the short term to maintain it’s autonomy.
Keep your nerve. I believe we will have further good news on dividends in the end of March Full Year results.
****up’s boasts of 450k here, representing only 5% of his net worth, seems unlikely for reasons already stated. His intransigence in the dividends v buybacks debate is unattractive to those of us invested here for long enough to remember the ineffectiveness of previous buybacks. But really it’s the gobbledygook he spouts with increasing regularity which is the greatest irritation.
Let’s keep things simple ****up. Production is heading for 55k boepd. POO is in a rising trend. Regular payments are our lifeblood.
Stop being such a pompous arrogant bully.
I’ve capitulated at 1.28 for my last 10k shares. At one point 3 years ago I held 100k+ and rode the express to the £3 Nirvana, which lasted a few short hours. Being a true amateur I failed to sell at that point.
Anyway, best wishes to the old crew Boyobach, bunks, JL.
Genel Energy (GENL GEGYF) (127.2p) in its last trading and operations update disclosed net production averaged 32,005 barrels of oil per day in the first nine months of 2021. Drilling operations at Peshkabir, Sarta, and Qara Dagh remain ongoing. Market capitalisation is £354 million, but following last week’s announcement of the Somaliland farm-out to CPC Corporation, the state-owned energy company of Taiwan, there is now a big drilling event coming up in 2023, targeting multiple stacked prospects with over 5 billion barrels of prospective resources. The well cost will be around $40 million, however, the technical case for drilling is compelling. One prospect alone could target over half a billion barrels.
Bunks yes I’m still here. Being a true amateur I was so dazzled by my success with GKP that I failed to cut my losses here, so I find myself marooned with 10k shares at £1.74. Definitely not lol.
Daily volume is pathetic.
The new KRG oil minister Atroshi seems determined to make a name for himself by squeezing the IOCs, and Genl is the ugly sister there.
So I’ll just hang on and wait for the gushers at Sarta and QD to make us rich. Or maybe Somaliland will become a stable progressive society where G’s investment appears well advised and profitable.
See you at the party.
I agree with the others. It’s good to hear from you. No need to apologise. We’re all responsible for our own decisions. The first 3 months of last year was very depressing for IOCs, particularly those dependent on the perfidious KRG. Hopefully we’ve all recovered. But remember, whilst history often repeats itself, the results are never the same.
bunks yes it does appear to be our old friend H over there on the BP board. Albeit in the guise of another irrepressible optimist, but with the familiar yet unmistakable tone of our old, rose tinted spectacle wearing, crimbo party absentee. I would have thought the BP crowd too high brow to indulge in his Friday Club frivolity, but neversayshell22 seems to have them Dad dancing to his cheerful tune, although “Reasons to be cheerful” has yet to be reborn. However I suspect that would be too much to stomach for the blue chip high priests of serious investing.
PUTUP you’re still spouting the same gobbledygook. Buybacks, again and again you say it, we understand the mechanism of converting shares into cash and the flat line echo. Those of us who’ve been here longer than you remember the $50m spent on buybacks at £2.06 avg in 2018-19. We’re still not there yet, just like your capex diminution theory bollax. I remember your boasts about having 450k in GKP, representating 5% of your net worth -£12m. Funny though that you’ve only ever posted your pompous drivel here.
Maybe we’ll have buybacks when the BOD considers it appropriate. In the meantime, remember, they’re not the only key to unlocking the substance cash reserves.
This was announced earlier today. Views please?
https://iraqoilreport.us1.list-manage.com/track/click?u=13d058ed214708c66bc5170b2&id=8d261ac514&e=5d5beb1af7
Although at the time of the Iraq conflict shares of Gulf Keystone (GKP) understandably divided the market, even then there were those who judged the company something of a cash machine.
By Zak Mir
This point has been underlined by the latest news from the Kurdistan producer. The latest is that it has received a gross payment of $35.8 million ($28.0 million net to GKP) the Kurdistan Regional Government. Following this, the current outstanding arrears balance is $54.8 million net to GKP, so perhaps more to look forward to financially.
Uncertainty on Oil price
Simmering tensions in PUK threatening civil unrest
Baghdad wants review of IOC PSCs
Perpetual payment worries
But
Production increase towards 55k bopd promised by end 3rd quarter will provide a consequent leap in revenue
It’s complicated. Pick an exit price. Mine is higher than today’s.
Straycat yes I agree. But buybacks were done at a significant loss last time, as the company’s value continued to slide. However the strategy may work now, into a rising share price. I think the market would be more immediately impressed by a record of reliable KRG payments and a smooth increase to the long awaited 55k bopd.
In 2019 GKP purchased $50m shares at average £2.06.
Does that seem a good investment?
Putup is fixated on the idea that buybacks are a return of capital to weak holders. That’s correct in the case of small illiquid companies, but not in the instance of larger companies like GKP where sellers can offload shares at anytime through the open market.
Buybacks are great if made by undervalued companies at the right price.
GKP’s record in that respect is not good. The true value of a buyback is in lowering the number of issued shares and the consequent increase in value of remaining shares (if the buyback is done at under value).
The obnoxious and arrogant Putup boasts of having 450k in GKP representing only 5% of his investments (£12m) lol. Odd though that he never posts anywhere else and has such a poor understanding of some basic economics.
Bunks ok fair point. Still, hard to understand why the KRG have paid GKP for March when they could have given themselves 60 days.
It’ll be a long time before the IOCs recover from this latest debacle.
Get Hawkey47 on the line, he’ll have some reasons to be cheerful, even if the invoices are fed to the camels.
Boyo yes I understand your views on this but how can we explain last week’s payment to GKP for March? I still think the terms of payment amendment applies only to the arrears and that the present delay is due to the usual cause—the KRG has no cash.
The payment to GKP is perhaps an indication that the management there has (euphemistically speaking) more “influence” with the sand dune Quarter Master.
The mantra is as always “It’s all about the payments”
But other factors such as the deeply disappointing failure to make progress at Bina Bawi are also significant factors.
I’m still holding 10k shares here at 1.74 so share the pain.
Boyo yes of course you’re correct. The missed/inconsistent payments have been disastrous for shareholders. Still, if we’re correct in thinking the amended payment regime applies only to the arrears then we should still have 12 payments this year. However the reaction to yesterday’s GKP payment is disappointingly muted thus far. Payment to Genl is, no doubt, on a camel’s back somewhere.