Member Info for Love_You

I don't think anyone rational should ever feel "hate" for a share price or a company …. but markets live in their own little bubble of emotions related to prices …. a pity that NAV doesn't seem an anchor of share-prices anymore ……. just thought that even though asset prices are determined by markets (and therefore what someone is willing to pay) that it benefits everyone to sort of at least keep reverting back to the mean of NAV ...because without such beliefs there is really no reason why share prices couldn't oscillate wildly everyday (such as between 150p and 500p for example for Barclays). Now it would be a nonsense for share prices to do this …. because someone with a knowledge that this was going to happen could become far richer far quicker than previous investors (which would surely anger the other investors). However, all I'm saying is that people who don't believe in NAV because they use the argument that value is purely in the eye of the beholder need to be very careful what they wish for ...because rationally I don't see how they can construct a rational world stemming from that belief system ...if they really think hard about it.

Any oil company actually interested in growing shareholder value should have set up their own in-house training programmes years ago ... there has been a massive shortage of labour across the whole sector for the past decade at least. I'm really surprised that more oil companies weren't willing to train up people coming to them straight from school or college …. you can't complain about a lack of qualified staff when you could have set up programmes to train them yourselves …. anyone with any sense knew that the Western education systems weren't fit for purpose from 1997 onwards.

There seems to be a complete lack of ambition across the oil sector. When one looks at what GKP could be producing in theory....compared to what it is producing - the difference is at least 90%.

However, on a less extreme level, the same thing applies across the whole oil sector …. Tullow Oil, Cairn Energy, Enquest, Apache Oil …. all massive under achievers looking back over the past ten years.

Now what I would like to know is if there a reason why so many companies are under-achieving in the oil sector and seem devoid of animal spirits and ambition to become mega wealthy by producing more oil? Have all of the senior management secretly converted to Greenpeace or perhaps cut off their own testicles?

I can't understand how such companies in the oil sector think it's acceptable to just sit around and do nothing for five years whilst they wait for government approvals or more manpower …. surely government approvals would not be a problem if they spent some extra money on wise lobbying? And as for manpower … oil companies should have learned you can't rely on market forces to provide staff with the necessary qualifications and experience ...hence they should have set up an in-house training programme to expand their workforce ….these things are all obvious that even I (a humble PI) realised in 2011 after observing the way oil companies were incredibly slow-moving even from 2009-2011 (and they seem to have become even slower in the years following). Hence I really think shareholders can sue them or something (just like the AMerican government keeps suing banks for mortgage misspelling that occurred over a decade ago). I mean investors should be considering suing oil companies for not realising that market forces were not going to provide enough qualified personnel at sensible wage levels ...hence had this been foreseen any oil company actually interested in growing shareholder value would have set up their own in-house programmes for training new staff coming to them straight out of college, high-school and university.

Haven't looked in here for over six months. I suppose that GKP are still producing around 36,000 bopd. It's rather odd don't people think that Shaikan was meant to be able to produce around 400,000 bopd minimum for at least 40 years - and the KRG also constructed a new 400,000 bopd pipeline to Turkey. Now I'm not saying that running at only 10% of the production levels the reservoir engineers initially thought achievable, nor losing a Billion dollars in market cap (was it even more perhaps - what was the peak market cap here in 2011/2012?), were related …. but if they were then it doesn't take a genius to work out what has happened, i.e. a bigger fish has created a scene of smoke and mirrors here …. either that or humans just aren't greedy and aren't interested in money …. or how else do you explain why a 10 billion barrel field (which Shaikan is) is only producing 36,000 bopd when it could instead produce 750,000 bopd for the next 40 years (if it were able to produce 10 Billion barrels in total, which is supposedly the amount of reserves in place)?

350 million barrels is pretty large for a company of this market cap - actually it's enormous for a company of this market cap. However - how on Earth have they got the green light from the government when they are giving half of the oil away to the Chinese - if only the irish lads on the council estates new about this plundering of the country's wealth then they still wouldn't give a f*ck would they - just sit around playing on the computer, or serfing the web, whilst the real men (the China men) come and take the oil and use it to fuel to growing economy - how long is it since anyone felt good in Ireland again in terms of promoting genuine economic growth - not the sort of economic growth intended for weak humans such as surfing the net on a tablet or collecting facebook likes on a mobile screen. I guess real men will always prefer a 6 litre Ferrari, a healthy source of home-produced oil, and a pint of Guiness. God I weep as to what's become of the young these days - forgetting that if they go all nimby and green then in the eyes of stronger humans (such as the Chinese jugganaut of economic growth) they will be seen merely as "weak". Oil is power, collecting facebook likes and building an economy based on charity shops is both weak and delusional - if you want a decent future for your children.

I see a lot of technical analysis posted on here - so is it cool to do fundamental analysis these days (predicting the future based on economic rationalism and reserves, cashflow forecasts, politics)?

Why not post that once Mexico, SeaLion and Tolumount are developed the fair value per share here will be circa 390p. Then add on a 20% premium and you are looking at £5 per share for a reasonable takeover price by "big oil" in 2022. Even at that price they would be getting this company a little too cheap - but that's life and I wouldn't complain personally!

Surely there is an onus on companies not to exclude any one group of stakeholders from the profits. (the stakeholders being the people which enabled the business to grow and develop to the current point).
It's been a long time since dividends were last paid by Premier Oil - however there is no doubt that the company is now in a commercially advantaged position in terms of production/debt compared to BP, Exxon, Shell, Tullow, Anadarko, Apache Oil etc. Hence given the above do people think dividends to Premier Oil's shareholders are possible later this year, or next? Also once Tolumount is up and running the cash flow should be more stable and will have been positive for over 2 years - what flippin' excuses could they dream up to NOT pay dividends to shareholders - after all we're the one's who've been through all the shit to finally get the company to be providing a valuable (essential) energy to the UK market - without us UK citizens and politicians would have cold houses (gas shortages) and lower oil production (less travel options possible and more angry voters) ? I really think the politicians are mistaken to keep criticising the oil industry - without this industry there would be no chance at all of them winning the next Election - people might say they would like green policies - but really they love their holidays, their warm homes, their cars - and woe betide any politicians who thinks that just because people say they are "green" that they actually want less foreign holidays, less warm homes, and less petrol in their cars at a higher cost. Fools be they politicians because they criticise those people/companies/investors the most who do the most to keep this country running - energy is essential and I really think it's time that politicians stood up and simply said - energy is essential and we really value and would like to thank all the companies working hard to keep the lights on, to keep homes warm, to keep you driving, to keep essential services running, and to enable travel/holidays as well.

Also oil is a free source of energy (minus the energy taken to drill the oil well, which is negligible) - hence as long as oil companies split the profits between their workers, governments and shareholders then it's actually a lot easier to create growing companies in this sector than it is to organise a piss-up in a brewery!

I think oil must be a good business for the next 10-15 years at least. There's no way that electric cars can penetrate the global market significantly before 2030 I would hypothesise. Currently for every electric car being produced there are many more people turning 18 who need to buy their first car to rive to work and to lead a normal life. Currently governments are just ploughing ahead with austerity - pension contribution rises, national insurance rises, tax breaks for the rich (which actually causes poorer people to have less options and hence this is also a contributor to lower levels of GDP growth). Anyway, at some point continuing to push austerity at a policy level just won't stack up because the people who are being screwed will become so large in number that they will seek legal advice, find wider support, and implement new systems which will enable their lives to grow. Most people given a free choice are interested in the wider world - so I can't see how the demand growth for travel can be suppressed - no free-market economy can legitimately suppress the natural desires of its citizens - in fact companies and banks only exist because they try to serve the current desires of the general mass of citizens - and travel is becoming increasingly popular and this seems to be a growth area.

I guess that if Premier get a reasonable deal then it will benchmark the current market value of oil. Hence if they buy 50,000 bopd production plus 100 million barrels of reserves for $1.5 billion then the main value is in the reserves. Hence if you look at Premier's 2P reserves and the potential to turn their 2C into 2P (which is quite an easy task given the near-term interest of big oil in developing Mexico and the Falklands basin: remember there is also a lot of oil to the South of the Falklands as well as the Johnson gas field to the North). So if you look at Premier's 2P reserves, and the favourable competitive position they are in to convert their 2C into 2P relatively soon, then what is Premier worth based on any potential Chevron metrics. Say Premier has 800 million barrels of 2P and if 100 million barrels are worth $1.5 billion then Premier's reserves by direct comparison would be worth $12 billion. Hence giving a Premier Oil share price of about 750p per share.

Now personally I think 750 per share is rather high - but if Tolumount is a success then the whole country will owe Premier a debt of gratitude for shoring up the UK's natural has supply rather than having to rely on Qatar, Norway and Russia. Now sentiment shouldn't really be important to share prices - but it often is and when a company is seen as being a "national treasure" and "serving the national interest" then it would be hard for the Traders to keep bashing the share price down to suit the agenda of people who have a vested interested in bashing the whole oil sector.

Anyway, if Premier wasn't in the oil sector it would probably be valued at 350p per share currently. It is producing as much cashflow as Kaz Minerals, has a similar length of forward production, and has very similar debt levels. Yet the market cap of PMO is £600 million and that of Kaz Minerals is £2,800 million. The only difference between the two companies is that one is in the much hated oil sector and the other is in the metals sectors - which isn't hated anywhere near as much by traders/investors. However the financial metrics of the two companies are almost identical apart from having a five-fold difference in market capitalisations.

Hence to any new traders take the above onboard - the markets don't really respond to fundamental value, deep value, or financial metrics anymore. I don't know what drives share prices because if I did I would already have used it to make myself a billionaire. However I can advise any newbies not to think that just because a company has large debts it is a problem - it is only a problem when the market wants it to be to bash down the share price. And conversely just because a company has low debts and is generating good cashflow doesn't necessarily make it a buy - because this was exactly the position that BP was in financially before the Deep-Water Horizon hiccup.

I actually think big oil companies were slow to recognise that the economy fundamentally changed in 2009. Ever since then wages has been capped at 1% or in decline in many sectors. Bank lending has been unavailable to most applicants. House building is at about a quarter of the levels it was prior to 2007. All the cars being produced are more efficient, and smaller, than prior to 2008. And the focus of the politicians is on eradicating oil and has from the economy as soon as possible.

Hence shareholders are meant to ensure that companies behave rationally and when they don't the share price of their company falls. I would say that if the government is going to pretty much constantly cut back spending, and at the same time drive prices of everything except crude oil higher (to subsidise renewable energy), then how is it rational of oil companies to invest in new production? Just tell me how is it rational as I can't get my head around the oil companies which keep pouring shareholders money into new projects despite their share prices continually declining. The debts in the oil sector are astronomic because it is over-taxed and no-one will ever speak a good word in favour of the oil sector at a policy level. Hence policymakers see it as an easy target when it comes to raising tax - whereas they see technology and the general economy as being difficult to tax and they leave them alone.

If shareholders had actually taken as much interest in the economic disaster that was Solan as they seem to be doing in this Chevron bid then Premier Oil perhaps would have done the sensible thing and focused on developing SeaLion rather than Solan

(personally regarding the Chevron assets I hope Premier are outbid by Ithaca, ConocoPhilips and Chrysaor). However I am sure it will be a commercial bidding process along with a bit of the old boys club and a few semi-crazy egos involved. Hence the outcome could be anything really …. but I do think if official government policy is make the economy 100% electric then really as an oil company the strategy that will return most value to shareholders is to cease all new investment and just to return whatever cash comes in from the existing assets to the banks and shareholders.

So rationally (assuming they start paying dividends soon) I would say this is a good business proposition that Genel have going on for long-term wealth creation - because the oil won't run out in Kurdistan for another 30-40 years at least, and they'll keep finding more of the stuff in all likelihood in any case.

Anyway compare this to shale oil. In shale oil the average well produces 800bopd initially and this declines rapidly after the first year of production so that without further fracking it is hardly producing anything at all after 3 years.

On the contrary Genel drill a well and it initially produces about 3,000 bopd on average (four times as much as a shale well) and because it is in a conventional oil reservoir the decline rate is only about 8% per year (compared to the exponential decline rate of shale well). Hence after 3 years the well should be producing at least 2,000 bopd. And even after 10 years it will probably be producing around 1,000 bopd (as long as they don't drill too many wells and goose the field in the short-term to the extent of it damaging the reservoir properties and lowering the ultimately recoverable amount of oil).

Hence as Genel is drilling on land then rationally (apart from security issues) each well should also be cheaper than a shale well - as conventional well do not require 30 fracking stages and all the specialised materials that the shale wells in the US require. Hence from the above analysis one can see that Genel is producing far more oil per well, for a far greater length of time per well, and theoretically each well should also cost less than a typical share well.

Hence isf investors are truly rational and self-interested, and believe in following the most sensible ideas which business come up with of how to generate wealth, then why wouldn't you think that Genel would be worth a lot more in future than it is today?

I mean I'm not saying that there aren't lots of other factors to be taken into account - such as security issues - or even Donald Trump getting desperate for more oil and demanding each oil company in the world deliveries an unspecified amount of oil to the American government for free. For when you control the most powerful military in the world you can pretty much demand anything you want to I guess.

However, if capitalism still works to the extent that governments do not make random laws demanding oil companies give them free oil. And if shareholders are rational and self-interested so they prevent the company from allowing wages to get out of control or from allowing the company to give away the entire profit in fees to governments and lawyers - then this seems a pretty good business as fundamentally you are getting a free product out of the ground (oil) and selling it at a profit. And Kurdistan is quite a low cost place to produce as not having to use sea rigs saves a lot of hassle - everything is easier when done on land apart from keeping the site secure from

I've concluded that the market is about money flows made by mostly rational self-interested people and therefore the money follows the most rational ideas or the most rational strategies that individual companies come up with.

Hence this share, on the above basis, should rise in price as long as the company just keeps doing what they are doing - which is very rational behaviour on their part and very value accretive to the business and ALL of its stakeholders from the workers, to the Kurdish government, to funding Donald Trump's wall, to also providing a fair return to long-suffering shareholders.

Basically a good oil business is a good business … it makes sense at the most fundamental levels of thought....the world needs energy.... there is free energy under the ground in the form of oil.....and when a company gets that free energy to market (i.e. produces the oil) then they make a guaranteed profit as long as they haven't gone mad and started paying the workers too much or giving too much away to governments so there is nothing left for shareholders. But a well-managed oil company that spreads its profit between its workers, the government, and investors, can't go wrong in terms of growth - as long as it keeps finding enough oil to replace what it produces each year.

Genel meets all of the above criteria currently and hence should be a very sound investment (logically if some imbecile in the Kurdish, American or turkish governments doesn't poke their finger in and c*ck up a pretty-well run business that is dividing up its wealth creation in a pretty responsible manner currently - assuming they start paying dividends pretty soon that is - otherwise shareholders need to ask are they the fall guys who will start to be cut out of this money-making pie to finance someone else's schemes in the Kurdish or American governments).

What a fool she is to think that she would know what the biggest challenge facing humanity is - how arrogant can a person be.

Yes I like a good pheasant WGR. Good food, cooked well, adds a lot to life.

I'd say you were spot on …. Waitrose was going to cut Ocado adrift next year as they no longer need Ocado and think they're a bunch of greedy spivs. Fortunately for Ocado they found a bigger fool in M&S shareholders.

So after hookup HUR will be producing 20,000 barrels per day with a few hundred million dollars of debt and reserves of about 1.5 Billion barrels.

Well Genel Energy is currently producing about 50,000 barrels per day, is targeting 75,000 by next year, has almost zero net debt, and has reserves of about half a billion barrels of oil plus at least 2 billion barrels of gas reserves (in oil equivalent terms). Although the reserves are lower at Genel they are still enough for about 20 years of production at current rates, 50,000 barrels per day. And in twenty years time the economy might be 100% electric and there might be negligible oil demand which could be satisfied 100% by low cost fields in Saudi Arabia and Russia.

Yet Hur has a higher market cap than Genel - is this fair in the opinion of the posters on this board?

But neither can you ignore the effect of the SPR release on the oil market. It may well have been legally mandated that repairs to the strategic oil reserve had to be paid for by selling some of their strategic oil reserves. However, the reason for the sale has not bearing on the effect of the sale on the oil market. If oil is released into the market it makes it harder for the oil price to rise surely?