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NUFC - previously held valuations in excess of 3.5bn when no route to market and not producing. However we did have three fields then!

So my penny’s worth is we should be looking at 2.5-3bn using price per reserve status I.e. 1p, 2p, 2c etc.

Cutting to the chase well north of where we are 2bn values us at approx 9.5/share

https://wp-gulfkeystone-2020.s3.eu-west-2.amazonaws.com/media/2021/03/25091749/GKP-Corporate-presentation-Pareto-Conference-25-March-2021-vfinal.pdf

So looking ahead to next week any predictions from anyone? Here’s mine none of which should be any surprises:

Negative:
- revenues down
- still no approval of FDP to 110k bopd
Positives:
- reinstatement of dividend
- resumption of buybacks
- further details on 55k bopd programme
- further details on repayment plan of $73m owed

So overall I think quite a positive update but with some negatives but overall surprises. I just hope JH can start to build some confidence and positivity into GKP instead of the previous dour and lacklustre displays JF used to provide.

GLA

So as final results approach us at the end of the month what are the predictions?

- announcement of dividends
- buybacks
- recommence works to 55k bopd

Personally my preference would be dividends given that there was a ‘commitment’ of at least $25m dividend payment per annum I would expect that to be a minimum, hopefully more with a special dividend paid early.

It would be good to get the details about the repayment too I.e. what is terms of any have been agreed and what timeline we expect full payment to be finalised.

Haven’t been in as long as a lot here but still over 5 years. You have to remember we are only producing from the Jurassic and even now have ‘only scratched the surface’ as once quoted by one of the senior managers at the time.

We are sitting on a proven world class asset with massive untapped potential. Poor management, politics and corruption have prevented value being reflected in the share price here, whether that changes who knows.

One thing we do know is the quality of the asset in an environment when finding proven oil producing wells are in decline due huge cut backs in investment.

What’s the value who knows but has to put the share price in double figures so I would guess £3bn plus whether we get there?

Let’s hope the new CEO can make a statement at the end of the month of his intentions to deliver value to stakeholders including shareholders!!

GLA

If the pandemic has shown is anything about our use of fossil fuels is that are reliance on oil is not going anywhere fast. Even with the huge push towards EV’s and alternative ways of working due to lockdowns.

https://oilprice.com/Energy/Energy-General/Fossil-Fuels-Will-Continue-To-Dominate-For-Decades-To-Come.html

https://www.ft.com/content/66fe5644-00dd-41db-8802-ea3278f29007

Pleasant surprise in today’s RNS is that repayments are beginning to be made but further still on-going discussions about how these repayments are continuing.

Fair play to Jon Harris his first few weeks at the helm have been encouraging and I also like the clearer RNS released today compared to the cryptic RNS we received under JF.

Grossly undervalued everyone knows that so time for JH to unleash yet more positive news at the end of the month with reinstatement of div and/or buybacks that should get the rockets going... should be trading at 2.50 plus already so lots to catch up on even without the additional positive news incoming.

GLA

Was expecting to see RNS land for the Kurdistan’s Oilers this morning so little surprised that no payments to any of the companies has been made. I guess at least the ‘late payment’ isn’t purely a GKP issue or is there something bigger arriving?

NUFC9 - agree the PSC 2nd amendment negotiations have been going on for many a year. I also remember us seeking approval for us to be able to market our own oil although not sure that is still a goer given the situation with Baghdad.

I actually think M&A could be on the table with the new CEO at the helm, we are not a million miles away from completing the 55k upgrade once that has been done decisions need to be taken around best use of excess money given that as it currently stands the ramp up to 75k isn’t approved yet. Also is it best use of money why not acquire another field as an alternative revenue stream?

Another wild card event could be the approval of a budget agreement and future oil sales. Got to be closer now than at any other time.

Like I said lots of positives to come and we haven’t heard our new CEO set out his stall yet.

Hi put-up

A few things to look forward too IMO:

- agreement on repayment plan
- dividend payment
- buyback announcements
- reinstatement of development to 55k bopd
- wild cards - FDP approval, other M&A activity

So with the monthly payment due to land on Friday will we get the usual drop off in share price ahead of Friday or will we keep above the 1.70 level?

Given the current oil price I am struggling to grasp that we haven’t jumped much higher already. Lots to look forward too over the coming weeks

GLA

Hi Theoryman

Your correct apologies approx. 18m gross and 73.3m net arrears.

Cheers

Ok we all know this is still undervalued massively at the moment but given the low base in the SP we have had a good run over the last few weeks so think today we are just taking a breather.

Next week another payment will land probably in the region of £18m, we then have positive updates to come from repayment plans around £75 back payments. All this positive news flow should get us to well over £2 in quick time.

That is without reinstatement of dividends and/or buybacks (prefer a dividend myself) and recommencing work on the 55kbopd uplift which we are led to believe isn’t a million miles away.

Get the feeling a steady flow of news as above is going to put us well above recents highs of £3....

First major target for me is £1bn valuation which seems a million miles away from where are currently but there is only so much that can be done to keep a lid on this.

GLA

So hearing all the right noises about restart of 55k bopd project with only around 20m capex remaining.

In addition resumption of dividend sounds like it’s on the way so given previous guidance of distributing at least 25m per year (half of last year as there was an additional special dividend) looking at around 11.5p a share, approx a 7% yield on current share price.

Looking very good in my opinion.

https://wp-gulfkeystone-2020.s3.eu-west-2.amazonaws.com/media/2021/02/17103045/GKP-SB1-energy-conference-17-February-2021-Ian-Weatherdon.pdf

In a time when majors have significantly reduced exploration to focus on green energy, rising oil prices where resources become more scarce GKP is well positioned to capitalise on this.

Hugely undervalued, when the money starts to roll in this will rerate.

You got to laugh, I mean seriously how the hell can anyone take anything serious when they state that an oil producing company pumping out 44k bopd sitting on 1bn reserves (conservatively on an outdated CPR) with minimum capex to get to 55k bopd.

$75m arrears owed, $18m landing next week and 500m cost pool is only undervalued by £100m lmao.

The current market cap is approx £330m even with a 1bn valuation which significantly less than its peak valuation of around £3.5bn in GKP’s short life values us at approx £4.75 a share. Based on most valuation methods it’s a £2bn plus company

A lot of the things holding the company back have gone I.e. baggage of previous management, new CEO, new CFO, emergence from a pandemic, rising oil price, dividends and/buybacks, repayment agreement on arrears, improving political environment.....tell me another company with revenue and profits equal to GKP that is valued so low.

Bring on the SP rises GLALTH

Good to see some actual decent discussions taking place when comparing to some other boards. When putting the SP targets in place it’s best guesstimates based on what I believe could happen.

Things to consider are:
- the $73m arrears is unlikely to be paid in full as a single payment and no interest is due given the current PSC terms unfortunately
- the current market cap of GKP is roughly 100m less than Genel with an inferior asset and not to long ago we had a higher market cap (so 100m / shares in issue
- the impact of the new CEO appointment hasn’t really kicked in yet and probably won’t for some time, given it will take time for him to set out his vision/strategy etc and get this communicated. Let’s hope it’s more engaging and inspiring than his predecessor!
- current oil price trend is very positive and looks like improving further still going into spring/summer when given wider vaccine rollout demand should significantly increase as the world begins to reopen

So lots of other factors in determine that SP trajectory.

GL

So a few weeks ago I posted an attempt at predicting future share price performance based on upcoming events, thought I would provide an update:

First target £1 achieved
2nd target £1.50+ upon MNR/KRG repayment plan agreement - need to swap this with the CEO appointment
3rd target £2 upon appointment of CEO JF replacement
- swap with the KRG payment plan for back costs
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

Be interested in hearing others views.

GLA