Member Info for LongStrong

Well it’s arrived well ahead of most forecasts, the price of oil touched $60 a barrel.

We are massively undervalued as almost everyone agrees. One would hope once the new CEO settles in he can start to shape future direction for us.

Should be approaching £2 shortly

GLA

https://oilprice.com/Energy/Energy-General/Europes-Unforeseen-Renewables-Problem.html

So another payment landed leaving approx 160m in the bank...would expect the next few months payments to be higher still given the oil price and increase in volumes.

Not expecting anything to be announced this week as handover still in progress between JF and new CEO but would hope over the coming weeks the new CEO can send out a clear message about creating value for shareholders with the commencement of dividends and/or buybacks.

So much positive news building up in the lamp the genie has to escape at some point. I mean seriously tell me another oil company with 1bn reserves (based on a very conservative CPR) with a market cap of approx 290m with 160m in cash!

Beer Matt calculations 290m less 60m cash (100m debt) valuing oil in place of 1bn barrels at 230m less 73m owed in back costs which leaves a valuation of approx 157m for 1bn barrels of oil.

Ok get all the risks and noise about that payments, single asset etc etc but seriously this is hugely undervalued and the new CEO needs to be let of his reins to realise the true valuation

GLA

So the inevitable dip seems to have happened before payment news lands this Friday. So looking at this we are currently in a period of handover taking place between JF and the new CEO running through until the end of the month (this week).

Therefore I wasn’t expecting any news or announcements until JF has left the building, however once that has happened I think we are in for an exciting few months.... the oil price is bearing up, discussions about back payments, improved macro environment with vaccine rollouts and opening of economies. Discussions about back payments, uplift in bopd produced, whispers of oil and gas law...to name but a few positives.

Sniff of dividends and/or buybacks should propel us towards £2+

GLA

While it’s nice to see some positivity and a decent rise in share price let’s not forget we’re we currently are even is the post debt for equity restructure and massive dilution for shareholders we have had a share price £3+

Once the shackles are off this and JF finally leaves the building hopefully the new CEO can start to get this shifting to a much higher valuation that JF ever managed to achieve.

Remember for all his faults TK reign GKP had valuations of almost 4bn we are currently around 400m!

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

https://polaris.brighterir.com/public/gulf_keystone_petroleum/news/rns/story/w6qe47r

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!