Member Info for Nobull

Putup, hi. Thanks for that. Yes, I have been locked up in a room at a contentious AGM while an RNS had to be hurriedly drafted, and it was joint effort between a director and the Nomad (sponsoring broker?). However, if you look at the Cellicourt Communications web site, you would think they are geniuses in terms of the value they add. There is even a quote from JF there about how they helped him. I remain puzzled how a non-native speaker can fashion a 52 word sentence such as:

"Faced with these unprecedented challenges, the Company responded swiftly and decisively, protecting our people and those we work with, contributing to the welfare of the communities close to the Shaikan Field, and managing the cost base to ensure the financial health of the Company; all while maintaining safe and stable production operations."

I also wonder if somebody else wrote the stuff about the buy-backs being value-accretive. A PR company who didn't properly understand them? Terry Smith has few critical things to say about buy-backs in his latest book, particularly when they are done at the wrong price.

A post where I ****ged off financial PR companies and how they interfere in the relationship between controllers and owners of a business, wasting shareholder money to make the BoD look better than it is, was removed. I don't think it violated the posting rules of this forum. It was in response to a rant by a poster against another for discussing how the dividend was "rushed out" to mitigate the effect of the disappointment with 55k bopd not being achieved. Just testing to see if this post will be removed.

Great analysis there, Theoryman. Thank you.

" this share price reaction is why A BUY BACK MUST BE ANNOUNCED..."
No, buybacks are fraught with difficulty regarding not destroying shareholder value. The Terry Smith wisdom on the matter is they should never be done above intrinsic value. At present we are trading above intrinsic value according to SimplyWallSt. Sure, you can argue about the size of future cash flows and the discount rate used to compute intrinsic value, and we can all have our own differing estimates of intrinsic value. But buybacks, while it might seem obvious in a low interest rate environment to do them, particularly when you consider the concentration effect on eps they can have, they are no good if they lower the ROE. Our BoD got the last load of buybacks wrong (they couldn't have foreseen the oil price crash and the pandemic), and those buybacks are still not value accretive. The BoD is wise to keep the option open, but I can't see them exercising it at present. JMV. Sure, value destructive buybacks can be value accretive for new investors (they get in lower) but our BoD should care about us, the existing shareholders!

"Very nice update". You've got to be kidding. It kicks the can down the road regarding the uplift in production. I make the increase in net production 2,688 bopd. Sure, many will be pleased about the dividend (I am not but that's my fault).

"Theory no one is interested in debating in with you or Putts. It’s a waste of time as your motives are clear."
And you know what everybody else thinks? Are you God or what? The arguments put by Theoryman and Putup sound too challenging if you have to attack their person rather than their arguments. There is a set way to value a stream of cash flows. You can differ on what those cash flows are and on their quality/reliability, unless you wish to argue for GKP shareholders getting a share of the benefits of a change of control, which is a different valuation basis.

Onepoundfish, if you don't like Putup's and Theoryman's well reasoned arguments, why don't you buy "Valuing oil and gas companies: A guide to the assessment and evaluation of assets, performance and prospects" and read it. It is by Nick Anthill and Robert Arnott. It's about 20 years out of date, but all the stuff in it isn't different to the commonsense way of valuing future free cash flow returns per share. If you want to big up low probability events into high probability ones, then that's your problem: we've had two failed takeover events in about 10 years. What makes you think a takeover premium should be embedded in the share price now? Do you like betting on terrible odds? Do you think a PE ratio of 7 on FY2023 eps is too low?

"Does anybody have a quick answer for how much withholding tax % (if any) is held from GKP dividends upon pay-out?"

We are incorporated in Bermuda, so no withholding tax is deductible.

You may have to pay UK dividend tax if you don't hold your shares in an ISA, if you are resident in the UK and have dividends that exceed the annual dividend allowance.

"These are not the actions of a genuine investor." Total gut rot. They are the actions of a reasonably circumspect risk averse investor who believes in the principle that a promise of £110 in a year's time is only worth £100 today if the going rate of return for the risk taken is 10%. There are advantages in gaining control of a company, but that's a different valuation basis, and until a bidder emerges, the valuation basis Putup argues for is the one that matters, for now. The probability of a successful takeover in the very short term is extremely low. That said, it can still rain if there is only a 0.001 chance of rain. The best reason to be invested in this stock is either you believe oil prices are going to rise (and the eps forecasts are going to be revised up) or you believe acid stimulation will increase our production to over 50k bopd. I believe both are possible (rising oil price and production volume growth and that the latter has a very high probability of success - I don't fancy betting against chemistry). I will love it if there is a takeover, but I am not counting on that. Good luck all LTH.

Putup, thanks. I've saved it all, and it will take a few weeks to get up to speed. Thanks.

Putup, many thanks for all that info. I've saved it, and I'll work through it all, and hopefully with some more reading of the PSC and of Michael Cahill's book (Making the right investment decisions: how to analyse companies and value shares) and with the help of some new spreadsheets, which I'll make myself, I should be able to argue better with the two scammers (and get sh*t loads more ad hominem back), have a better understanding of the company and its prospects, be able to ask smarter questions at the AGM and be able to work out a few things about the consensus analysts' forecasts, all without having to bother to get hold of any broker research notes, and maybe even produce my own research notes. Many thanks.

" It's not them that bare the burden of the capex. " You mean we are free carried? Then why should we get any of the reward for the uplift in production from 55k bopd to 75k bopd?

"Rev recd post period end but b4 accounts preparation/sign off should be included in the period it relates to. No doubt at all."
No. What is the point of a balance sheet with an "as at year-end" date then? The B/S is meant to be a snapshot at a particular time (31st Dec in our case). I agree with Putup about the revenue recognition policy and how revenue can include invoiced amounts for which cash has not yet been received, and with his view that the accounting of it isn't all that important compared with the actual cash receipt. For events that are significant and that occur after the balance sheet date, there is a specific note "Post Balance Sheet Events" where you can draw attention to, say, a huge cash receipt.

Theoryman, thanks. Yes, you are probably right then (case 3), and I've got it wrong (we were just told late). Anyway, it doesn't matter. I am very pleased. Now I hope it is just a case of waiting to hear the result of 2HCl(l) + CaCO3(s) --> CaCl2(l) + H2O(l) + CO2(g) working on the formation to clear a path to the oil. The low forward PE maybe shows the success of that chemical reaction is already taken account of in the analysts' consensus forecast, but that the share price hasn't, so with luck we should get a further decent share price uplift when the result is reported later this month. AIMO. DYOR.

" there is a chance that they will be allowed into the 2021 financial accounts. " Not sure about that, but they can have a note in post balance sheet events, can't they, to call attention to the receipt of this vast sum of money, surely?

What I said before isn't quite right. There is a view that as CPO prices fall, the amount we get stays approximately constant because the export taxes and export levy reduce. To some extent that is true. But we are probably a high cost producer compared with AEP and MPE (no unit cost of production is published in our accounts, so it is more likely than not that we are a high cost producer - otherwise they would be trumpeting their low unit cost achievement, right?), which means we theoretically go out of business before other companies do when CPO prices drop to really low levels for long periods. We have the best CPO yield per mature hectare but that might be because we have fewer young oil palms and therefore an almost flat future production growth profile while the other companies have a more attractive, steeply rising one (e.g. MPE trades on higher price to book ratio than we do - we trade at a huge discount). Yes, the gains on the prefs are capped, so the prefs are a lower risk, lower reward play, whereas the ords are a higher risk, higher potential reward play.

Next news should be a coal shipment or disposal of the coal interests, and possibly a trading/production update. Yes, the prize here is to repay all the debt and redeem the prefs so that the near $500m of total assets mostly belong to the ords whose value is only about $50m at present - yes, some of the assets are financed by minority interests and yes, there is some dilution to come from the warrants being exercised when the share price is above £1.26, but were we able to buy out all that prior ranking finance using funds generated by ops, it is possible to see a multibagger here, but if it happens it will probably take quite a few years, but I am happy to wait! AIMO. DYOR.

The pref shares are now xd, so if you bought now, you wouldn't be getting the 5.5 div (4.5p semi annual payment + 1p arrears) payable on 31 12 21. The prefs have a very different risk rating from the ords. Next year, if all goes well (CPO prices stay high, coal interests generate cash for the first time in about 10 years, or alternatively get sold off, if stone interests start to generate cash - another dud asset that could suddenly help make a contribution) then the prefs will pay out 19p (2 x 4.5p semi annual payment + 10p arrears). After that the arrears on the prefs would be 7p. The inflation rate and interest rates are also a factor in how the prefs are valued. There are 72m prefs in issue, and there is an RE.B thread where people talk about them. The ords have a speculative risk rating, so ought to be quite volatile. Their price performance maybe depends on how well (or not) we cope with reducing net debt using cash generated from the business before movement in working capital. Mr Robinow's purchase of the warrants is a good sign, but there are no guarantees that CPO prices will stay high, and those seem to me to be the most important driver of share price performance, and predicting those is a mug's game. The combined leverage (operating and financial) is high, so the share price should theoretically swing all over the place. Hope that helps. ATB.

Today's consensus forecast
Year Ending Revenue (£m) Pre-tax (£m) EPS P/E PEG EPS Grth. Div Yield
31-Dec-21 240.71 115.24 52.87p 3.3 n/a n/a 26.26p 15.1%
31-Dec-22 311.34 157.97 73.25p 2.4 0.1 +39% 16.05p 9.2%
Last Friday's consensus forecast:
31-Dec-21 238.61 110.11 51.30p 3.5 n/a n/a 25.22p 14.3%
31-Dec-22 299.50 140.86 65.40p 2.7 0.1 +28% 15.70p 8.9%

BroadfordBay, you have found the exact words I must have read to write my post - I just couldn't remember where I had read it. Many thanks.

ValueS, many thanks for that. Absolutely no excuses then on my part for not finding that. I take back some of the criticism I have made of the company. Sorry.

All, thanks to all the posters who take the trouble to post sentiment-changing observations that help to understand our business better, often while having to suffer unprovoked ad hominem from those who only want to pass on their shares for more than they paid regardless of news flow affecting our share price.

CCC,
"what grates me is the fact the company left investors three & half months believing SH-13 was all well when the company last reported that production was imminent..."

I wonder if it is because there are no sanctions against the company for this sort of behaviour. We have a standard listing, not a premium listing, so we have no sponsoring broker to write to, to ask if the company is in compliance with its obligations on price sensitive info disclosure. Even AIM listed companies have a Nomad one can write to, and the sanction is the Nomad can always resign. The standard listing we have seems to exempt the company from complying with rules designed to preserve market integrity, although I read somewhere (in the prospectus?) that the company will try to comply with the obligations in Chapters 7-14 of the listing rules. I wonder if this is why Investors Chronicle talked about "corporate governance issues" in a recent write-up.

Thank you for trying to get the company to be more forthcoming on the CRP, etc. I had to write to them just to find out when the PSC finished, and I didn't find the PSC on the company web site - I found a model one somewhere else (on the MNR web site?). I do feel that the BoD, by keeping back so much info or not explaining it properly, are cutting themselves far too much slack. Sure, investors need to make an effort, but we are only the effing owners of the business, and the BoD could do better. I'd like to see even analyst's 'non-independent' research notes on the web site. I will get there in the end, without the need for analysts' broker notes, but it is very time consuming. Thanks for that great link about Kamal Atroshi. Yes, I see he wants competent and financially sound oil companies, not ones that damage the reservoirs or waste Iraq's resources, so a lot hangs on the success or failure of the FDP, I wonder, and the outcome could make a total nonsense of any share price target based on the current status quo, I wonder?

Guidance note 7.1.2 from Chapter 7 of the listing rules, a chapter we voluntarily comply with, according to our prospectus:
The purpose of the Listing Principles and the Premium Listing Principles is to
ensure that listed companies pay due regard to the fundamental role they
play in maintaining market confidence and ensuring fair and orderly
markets.
I believe Chapter 3 Article 17 of the EU Market Abuse Regs deals with disclosure of price sensitive info. This legislation was 'onshored' by the Brexit Withdrawal Act, maybe as the UK Market Abuse Regs.

"An issuer (e.g. GKP) shall inform the public as soon as possible of inside information which directly concerns that issuer.
The issuer shall ensure that the inside information is made public in a manner which enables fast access and complete, correct and timely assessment of the information by the public"