Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
CCC - whilst I agree a lot of what JH has done in his short tenure have been open goals, he has still delivered which JF continually failed to do.
JF consistently over promised and under delivered and his lacklustre leadership and lack of trust in the market place clearly weighed on the GKP share price.
I agree there is still a long way to go before we can declare JH a success but his start is at least very encouraging in my opinion. Judgement on him should be made further down the line when we see delivery of value creation through hitting targets e.g. the 55kbopd expansion plan, approval of FDP, additional shareholder distributions and ultimately an increased market cap.
Promising start but a lot for to come which at least makes things a lot more exciting than the dour approach of JF.
Agree it’s not a huge amount bought by JH approx 50k worth but it’s 50k worth more than JF ever bought and it sends a strong signal to the markets.
The reality is it’s no more than a token gesture but I would much prefer JH approach thanks JF. Since starting his position he has made all the right moves including:
- publishing updated CPR
- restarting 55kbopd to project
- restarted dividend payment (quite wisely I think at a low level with the option to offer more later in the year)
Even the RNS are not as cryptic as when JF was at the helm so all in all great start from the new CEO
Jon Harris making all the right moves at the moment, really can’t fault his start at the helm. Let’s hope it continues and thank god we are rid of JF.
Frustrating all the recent positivity is wiped out very quickly with the delayed payments. This isn’t only a GKP problem as none of the oilers have been paid yet.
No doubt payment will land shortly typically not long after a dip in share price so maybe tomorrow?
Still lots to look forward too, the CEO has made a decent start, can’t fault him at the moment so let’s hopefully build on this by delivering to the timelines for the ramp upto 55kbopd.
Fully expect the rollout of vaccines to ramp up across Europe and economies opening up over the coming months which will drive demand. The timing of the uplift to 55kbopd could be perfectly timed to capitalise on this in Q1 2022.
Hugely undervalued let’s look forward to the upcoming dividend and hopefully more to come.
So wonder what this week brings us? We should receive our monthly payment by the end of the week approx $20m added to the coffers with approx $180m making a significant cash holding.
Suspect oil price will be under pressure this week with slow rollout of vaccines in Europe and travel bans remaining in place.
GLA
Hi Toonman - just took the total $50m paid for 2019/20 which was 0.2297p / 2 = 0.1148p
Link on website below:
https://www.gulfkeystone.com/investors/share-price-information/#dividends
Very pleased with the update and especially the $25 dividend (at least this figure). Which works out approx 11.4pence per share.
Nice to see a much clearer communication too compared to previous ambiguous statements from JF.
Confirmation of cancellation of shares, confirmation of plans for Gas management. I like the approach from the new CEO he has made a very encouraging start long May it continue.
GLALTH
Looks like a good week ahead...
- year end results Wednesday (dividends/buybacks?)
- oil price steadily rising (opec+ agreement)
- February payment due end of week another $20m+
- USA vaccine rollout pace picking up, EU will get there at some point all pointing towards increasing demand for oil
- dare I say it budget approval?
A lot to look forward too.
GLALTH
Meaning exactly what?
This is a discussion forum I have put my valuation differs with yours and what? The reality is we are massively undervalued in my opinion.
Putup - let’s see the game isn’t over yet is it :)
My biggest concern is not low ball valuations posted on a chat room but GKP getting taken over on the cheap.
Fortunately GKP is no longer a distressed seller, has a very healthy balance sheet, on the cusp of producing 55k bopd and in all probability will announce a dividend next week and you are suggesting a valuation less than £1bn I really don’t think the large institutions would be happy with their return.
Let’s beg to differ!
Kaaran - wrong the reserves do matter in relation to the PSC effectively GKP can extract all the oil of it chooses too in the life of the PSC. The reality is this field will grow as most large fields do so it’s unlikely GKP will run the field dry.
If a large E&P was to take over GKP the likelihood would be they would ramp up the production considerably faster and also realise the yet untouched ‘potential’ in other parts of the field not included in the CPR.
So reserves matter, the ability and will to extract the reserves is a different topic.
Putup - my money and my mouth are firmly aligned thank you very much. I have been a long term holder for quite some time and stand by my personal opinion of a target valuation. Nothing fancy a straight forward $/barrel based on reserves which is a legitimate mechanism to value an oil company (there are many others as you maybe aware!). Below is a rough cut:
Reserves
1P reserves = 240 @ $3 = $720m
2P reserves = 505 @ $2 = $1010m
2C resources = 293 @$1 = $293m
Total = $2023m
Plus cash on balance sheet (approx $200m) less debt leaving approx ($100m)
Plus arrears £73 Sterling
Plus monetary value attributed to cost pool ($500m) although this is debatable.
A £3 share price would value GKP with a market cap of approx £625m lol now your having a laugh. Who is trying to kid who? Show me another oil company that is so undervalued.
Putup... this is my opinion and for your information I am heavily invested in GKP currently underwater like a lot of long term holders.
The valuation is based on applying a $ value to reserves nothing complicated just a straight line valuation.
Do the same and see where you get too!
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
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