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Happy Christmas all hope it’s a healthy and wealthy one :)
So competing market cap valuations of GKP and Genel and bear in mind up until more recently valuations have typically been comparable even though GKP has a far superior asset.
Given Genel are currently valued at 400m straight line across to GKP would value GKP at £1.90 so a long way to go yet
Sticking with my target prices posted yesterday:
GKP valuationsTue 10:26
This is getting ridiculously cheap now:
First target £1 achieved
2nd target £1.50+ upon MNR/KRG repayment plan agreement
3rd target £2 upon appointment of CEO JF replacement
4th target £2.50-£3ish reinstatement of dividend and/or buyback
5th target £3.50 restart of 55k bopd upgrade
6th target £4.75 ish upon delivery of 55k bopd
Amazing how much excitement builds when we get a little upward trend which shows how much the sentiment has been battered by poor management and MNR/KRG failed promises. Having been a holder for a good few years now I finally feel things are turning. But as always nothing is ever in a straight line.
GL
Not funny at all the current valuation is silly. Previously had valuations of £3b+ Ok single field now but producing consistently lots still to go for in Shaikan with upward revisions on CPR figures expected. Even based on current CPR expect valuation £2bn however sentiment due to poor management at a low hence why targets are based on achieving £1bn target
This is getting ridiculously cheap now:
First target £1 achieved
2nd target £1.50+ upon MNR/KRG repayment plan agreement
3rd target £2 upon appointment of CEO JF replacement
4th target £2.50-£3ish reinstatement of dividend and/or buyback
5th target £3.50 restart of 55k bopd upgrade
6th target £4.75 ish upon delivery of 55k bopd
In addition upward curve of oil price may lift target prices.
GL
I blame the BoD for a lot of things however hand on heart I don’t think I can blame them for the buyback as at the time it seemed a good idea. The whole environment changed very quickly with the pandemic so the average purchase price during the buyback is probably around twice today’s SP. I can also understand having the option to cancel them could come in useful as a defence to any hostile takeover.
If anything I would like to see buybacks happening now and dividend restored.
Ok so there is £150m difference in the market cap of GKP and Genel. Let’s look at why?
GKP has a much better asset, will be producing more in 2021. But development to 55k bopd on hold, arrears of 73m and importantly no dividends
Genel smaller asset reserves, however management routinely provides updates, providing dividends and has confidence in the market. Has approx 120m arrears.
So the fundamental difference in valuation is because of??? For me the difference is how the companies are being run and the management teams behind them.
https://oilprice.com/Energy/Energy-General/Oil-Markets-Are-Finally-Ready-To-Recover.html
Baz - we have previously had valuations of £3bn+ albeit when we held licences to multiple fields however the value was always in Shaikan. Given the previous valuations it’s not unrealistic to think of similar numbers which would put us at around £10-15 a share.
But and it’s a big but with the share price so low it leaves us extremely vulnerable to a low ball takeover
Should receive another payment tomorrow too!
Even if there was a fall in the consumption of oil to support travel (road and air) there are a multitude of other reasons why oil isn’t going anywhere fast. Least not the manufacturing processes of millions of products require oil.
Needless to say even if the UK ‘leads’ the world in banning sale of petrol/diesel cars in 10 years time you have at least another 5-10 years before the majority of cars would be electric so just in UK approx 20 years. Then look at China and USA clearly the biggest markets are probably at least another 10 years behind so 30 years?
So safe to say oil isn’t going anywhere fast and demand will probably continue to rise for a few more years yet!
So when is JF finally going to sail off into the sunset with his fortunes, hopefully soon.
Oil price is looking good if I remember the illustrious MNR stated they would think about paying back their debts to us and others once the oil price reaches $50....here hoping as that would be a nice boost to then coffers
£7 values GKP at around 1.5bn so easily achievable in my opinion. The issue with GKP is could reach £20 plus or go to 50p and it could happen very quickly.
£7 values GKP and around £1.5bn so easily achievable given had previous valuations of 4bn plus. The problem is it could also go to 50p.
Timescales dependent on internal politics I think and a good appointment to take over from the ferret.
Reading the utter nonsense that is posted not only on this BB but others as well why o why do people have such high opinions of themselves.
Seriously anyone invested in GKP surely did their research and made the investment based on their findings. Rightly or wrongly things so far haven’t been a bed of roses for long term holders including myself. However one thing for sure I would never make financial decisions on information posted on bulletin boards, by all means listen to the bolloc&& posted by some of the complete tools but for your own safety don’t invest based on some information fed to fuel either their own ego or self interest.
All being equal GKP will reach a fairer evaluation in time but that is purely my opinion.
GLA and have a nice weekend!
OwenJones - the strangest thing is that after the first CPR the BoD at the time were fuming about how conservative they had been, the company that undertook that was ERCE given the questioning of accuracy of the first CPR why on earth would you continue to use the same company.
Surely if you are not happy with the findings of the first the obvious option would be to use another company to get a 2nd opinion or undertake future CPR’s.
Inv they will all probably have gagging orders as part of their pay offs.
Let’s be honest while Todd Kozel could sell he also caused a lot of problems for GKP taking on debt that wasn’t sustainable.
I don’t think there have been many innocent parties who have worked at senior level within GKP
That would value GKP at under £1bn which is ridiculously cheap, remember we have had a share price that valued us at over £4bn previously.
I think fair value at the moment would need to be £2bn+ So in answer to your question I would not want to sell at £4.
JF has been a disaster for LTH whilst he runs off into the sunset with millions in his bank from his failed management of GKP let’s look forward to a new era.
The share price reaction says everything let’s hope we land a heavy hitter CEO who can sell the GKP story and build confidence and value in our company.
GLA
https://www.cnn.com/2020/06/18/investing/oil-price-spike-jpmorgan/index.html