Member Info for Nobull

"Morning nobull, new here and probably naive, but interested in your view. With EBITDA running potentially well above $60m usd this year, interest costs of around £25m, capex running around $10m annualised, surely the company is self financing at least at this juncture? ". Sorry, I can't keep up with all my reply obligations. Yes, it is self-financing now, but I would have thought the market needs to convinced the company is self-financing for the entire cpo price cycle over say a ten year period. The market cap. for the ords probably indicates there is a lot of dilution risk priced in already, the reason why the price to book and price to sales is so low. Obviously if a dilutive equity issue of ords can be avoided, those ratios can normalise pretty quickly by the ords rocketing, I wonder, but the ords aren't going to rocket until the company is really seen to be starting to get the net debt going down on a permanent trend. Of course they need debt headroom at present to maybe get some necessary replanting done, to hold out a bit longer for coal mine sale (no cash coming in from those $38m of loans to the coal mine?) and maybe other things, but things do seem to be improving. If all that dilution risk comes out of the ords price, I would have thought the price to book ratio can double, but WDIK, I'm only a learner investor. You will see on the palm oil price curve here, there is a backwardation with front month considerable higher than back month, probably because soybean harvests are expect to improve in the coming year, but still future palm oil prices are still not bad despite that.

https://www.bursamalaysia.com/market_information/derivatives_prices?code=FCPO

At the AGM I queried whether the company was being run for the benefit of the investors in the prior ranking finance, and was told politely that the directors were more exposed to the ords., which is true of course. Anyway there is scope for a virtuous circle of falling net debt and rising market cap if palm oil prices stay reasonable. Stockopedia has given us a risk rating of speculative and an investment style of "value trap". The last is a lagging indicator in my view, so I expect that to change to "turnaround" due to their algorithm, which probably only kicks in after the share price has risen to 70p, so I'm not put off by that. Their investment style on GKP has flip flopped with small movements in the share price. Not long ago after the big rise turned to pull back, it became a "momentum trap", and then a period of sideaways movement became "neutral style" and then last week after good H1 results that sent the price up about 30% it became "super stock", so not a great deal of good as a predictive indicator. I will have to re-work my forecasts for REA in the light of the results, but I can't at the moment see why they can't make a small profit attributable to the ords. for FY2021. Wigwammer, you are right about everything else in your post.

"You assume wrong as always" I agree Highlander on this occasiion, I am wrong. I've read through you r lse posts. Sorry.

"It's like the copy and paste gang.."

Boiler room scammers don't like essays that join up the dots, they don't like well reasoned argument and they don't like maths arguments. A PE of 7.2 seems about right to me for this stock, so I like Peel Hunt's price target of £3. I look forward to eps of at least 43p for FY2022 and that price target being achieved by April 2023. What's your view ?

Surreyscot, "You assume wrong as always"

So maybe it's highlander1970 and not Highlander_1970 as I mistakenly typed. Comparison of syntax patterns, punctuation style, choice of lexis, use of idioms and literary devices used (or absence of), spelling, subordination and coordination patterns used, typical propositional content etc. are often very idiosyncratic so I can recognise Surreyscot's mate on ADVFN no matter what moniker he posts under. I'll have to look through your past posts then.

FDP approval is potentially very share price sensitive news, so failing to RNS it, as Surreyscot alleges, albeit qualified with his "IMO", is against the continuous disclosure reporting requirements, requirements designed to stop directors exchanging unpublished share price sensitive info on the golf course, etc. with their mates. The rules are designed to out the price sensitive info in an RNS as quickly as is practicable. FDP approval (as long as the capex requirements to get to 75k bopd are not excessively onerous, something the MNR has influence over) potentially changes our anticipated eps growth rate, the one thing out of the three things that maybe have the greatest impact on our share price in that a change in growth rate can allow our shares to trade on a higher multiple of earnings temporarily until the higher eps predicted by the higher growth rate actually materialise. The Peel Hunt target of £3 quoted in the Evening Standard article last Thursday is probably based on eps of 43p and a multiple of 7, 7 being the PE ratio that gives an earnings yield of around 14%, the minimum amount a risk averse investor will want for investing in a business that is a price taker (not a price maker) in a country near the bottom of the TI index on corruption perceptions.

A higher growth rate might mean our shares could trade on a PE of 9, giving a price target of £3.87, say, all other things being equal, which they never are. Don't ask me which time period Peel Hunt have in mind for us to have eps of around 43p - no idea, but their price target does allow one to make a guess about the eps they have in mind.

Surreyscot has made a post under his highlander7 moniker on ADVFN today that displays good oil and gas knowledge. This is to be expected from a competent boiler room scammer operating out of the UAE or Thailand - some of their posts will earn respect, others need to be called out for the *******s they are. The one on the FDP is a *******s one. JMV.

Boiler room scammers are nothing new with GKP (thanks to K4NK for the link to the article below)

https://www.theguardian.com/technology/2012/may/17/twitter-court-fantasy-oil-firm

Surryescot's multiavatar mate has highlighted a tweet from Twitter's Oil and Gas Tracker which implies profits after tax for FY2022 of about $220m, which could imply a share price target of about $7 on multiple of 7, a target that could probably be achieved by April 2023 when FY2022 annual results are published, if the assumption of $70 oil price is correct and none of the risks I've previously mentioned, the ones that upset people, go bad. Not all their posts are *******s, but the £25 takeover crap definitely is.

It is to be expected people with multiple monikers tick up their own posts. I assume Highlander_1970 is another of Surreyscot's.

Rhena, you made some very good observations in your post yesterday. JMV.

It's still a long way off being self-financing for the whole of the CPO price cycle. The move of the prefs to near par provides some safer (from the point of the view of the ords) new financing options compared with just replacing debt with more debt, I wonder? Disappointed they haven't sold the coal interests - these sky high coal prices may not last long (see the coal price chart I posted on the RE.B ADVFN thread). My forecast, on the same chat thread,(for the full year doesn't seem miles out, but I'll have to work through the numbers again in the light of today's result. Pleased about the lower interest rate, if it isn't the usual "overgilding of the lilly" stuff of all CEOs. Yes, I think the ords have bottomed; I was stupid not to buy the prefs first. Now, it's the turn of the ords. The sale of the coal interests should provide the next, as DG says, "whoosh". Good luck Devonplay.

"Nobull I'd say your family r pretty chuffed with that divi"

Armas, it has no significance to them at all: it's all going to HMRC in IHT. And then there will be a further income tax bill to pay on the divs on 31 01 23 at a Corbynesque rate of tax. I can’t kill myself in protest about it; that will mean the IHT bill will have to be paid twice over instead: forced to stay alive and face being called a Allbull by Surreyscot for another day. How terrible.

At a guess, 2,500 bopd: previous plan was to produce 55,000 bopd; no guidance was given for SH-G; debottlenecking work was intended to allow a total capacity of 57,500 bopd, a combined total from PF-1 and PF-2.

"As ought to be obvious, the recovery of a $1 incurred today over time in the future is a negative NPV event. So the value of capex and opex without the gain from 'profit oil' is negative."

Very well explainied, PUTUP. A big thank you. Yes I know if you discount a dollar by 14%, divide it by 1.14, that it only has a present value of 87.7 cents, if it is repaid in 1 year's time but I never thought of calling it a negative NPV event as you have. A light bulb moment. Thanks.

Yes, our small share of the profit oil is all the more important then to make up for that loss on the capex and opex, and is not a reason to go splurging nil cost options on newly hired Human Resources Directors. JMV.

"The Kurds will decide when , who , and how much. "

Yes, I agree with you Surreyscot, not that you are anywhere near Surrey. Sadly, that means the takeover premium, if a takeover ever happens, probably won't be very generous because we are limited by the KRG as to who we can sell it to (their approval is required, right?). Charlie Sharpe's price target is a more sensible one than your £25 nonsense. He knows how to divide by 1.14; you evidently struggle with the concept. A prudent buyer would probably want the exploration upside thrown in for next to nothing, I wonder? The KRG are not one of the top 10 shareholders. Are you suggesting that "40% gone AWOL" nonsense and undisclosed concert parties nonsense because the Bermudian Companies Act does not have rules on notifiable interests?

"55k by 70 dollars is 3,850,000 a day, by 365 is 1.4 billion a year alone!" Yes, that's what I thought too when I told my relative to buy these in April/May 2020. Sadly, you forgot to multiply by 0.16 to get our share of profit oil. While profit oil isn't our main source of revenue at the moment, it will be when the cost recovery pool is lower, and you need to be very clear when the "cost oil" element of our revenue is going to drop off suddenly. You should read the model PSC on the MNR's web site to get a better understanding of it all. All the best.
P.S. because we are a Bermudian company, no stamp duty is payable on purchases; this attracts boiler room scammers, so not all posters are trustworthy, particularly Surreyscot and his multiavatar mate on ADVFN. JMV.

"The valuation I gave , is not mine", Oh dear. It's all somebody else's fault; Surreyscot isn't a boiler room scammer.
"I dont have the skill set...[to calculate the value of GKP to a bidder]"

FFS how hard is to divide by 1.14 to discount a cash flow due in a year's time, and by 1.14 squared for a cash flow due in two years' time? The 14% discount rate maybe is a tad low for a business model with cash flows subject to permitting risk, exchange rate risk, oil price change risk, title risk, production risk, exploration risk, liquidity risk, dilution risk, customer payment default risk to name but a few, but you can divide by 1.15 instead if you want a 15% discount rate.

Another thing about boiler room scammers is that when they big-up the probability of improbable events such as a high value impact event occurring imminently, e.g. next week, is that their predictions invariably tun out to be wrong. Nothing surprising there, but the problem is to retain their credibility to pull in new victims and sound worthy of respect they have to lose their posts containing the predictions that were wrong. One poster on ADVFN alleges Surreyscot has deleted many old posts, and deleting posts is one way of dealing with the problem; alternatively, Surreyscot's multiavatar mate does it by ditching his old avatars every week and replacing them with new ones, making the same claim that you can bank on a takeover at £25 next week or whenever.

No extradition treaty with the UAE? What a surprise.

On a rough back of envelope calculation, using $70 oil price (a bit unlikely for a whole year), SH-13, if it adds 5,000 bopd (I have no idea how much it will add), will add about $20m to annual revenue, at least that is in terms of profit oil revenue. The return of the capex associated with the cost of drilling SH-13 , say $25m, will be spread over a lengthy period I wonder, so I've ignored that, but it is a small additional dwindling amount that can be added to annual revenue.

I am fairly certain a bidder is not going to bid £25 a share for a stock that is priced at under £2 currently. The investment conditions in the KRG make a competitive bidding process by IOCs, all trying to outbid each other, very unlikely. Takeover premia even in hostile situations, even with multiple bidders, rarely exceed 200% between vwap before bid announcement and the price offered by the winning bidder.

For a more assured way of calculating how much a bidder will pay all you have to do is discount the cash flows by about 14%, using a sensible long term oil price, using sensible estimates for the capex, using the existing PSC as the basis to decide how swiftly capex is returned (no nonsense about how the MNR will unilaterally change the terms of the PSC in the bidder's favour) and work it out yourself using the same maths that tells you a promise to pay £110 next year is worth only £100 today if you can earn 10% in the mean time. The lower a country is in that Transparency International Index on perceptions of corruption, the higher the discount rate a sensible risk averse investor will want to use, all other things being equal, I wonder? (Iraq is near the bottom in that table). The high discount rate required can't be totally unconnected from the high risk rating this stock has: Stockopedia still gives us a speculative risk rating. Even Investors Chronicle has alluded to "corporate governance issues" a euphemism for...

CCC, as indeed anyone else, is entitled to discuss water and gas issues. Surreyscot, what's your problem with that? It isn't share price sensitive info. I can see that a boiler room scammer operating out off the UAE might find these discussions inconvenient. The MO of a boiler room scammer surely is to operate from a country that is far too preoccupied with the development of its own country than with foreign boiler room scammers cheating foreigners, but contributing to the local economy. An effective boiler room scammer is one who posts knowledgeably in some posts (like you do on some oil and gas matters) to gain a following but misleadingly in other posts (like you do on £25 takeover offers). The problem with this is that when the misleading posts get challenged you have to chuck out a lot of ad hominem ( "Hello Allbull") at those who call you out, as the misleading posts are hard to defend. The model works because investment analysts needed to identify and help police prosecute it are expensive.

Bucephalus, ****eye's views are just as valid as LongStrong's. I ticked both up. None of the views here contain inside information so they won't affect the share price, will they? It's the oil price and the prospect of production increasing and the change in the payout ratio that has probably moved us up today, I wonder? Why shouldn't ****eye be a genuine shareholder? We don't all have to be rabid mad fawning BoD sycophants, do we?

LongStrong, many thanks. Great post. I missed the webcast. Is there a recording of it? Thanks?

Kurdman was right about the production level. The amount of ad hominem you chuck out at posters who refuse to believe in your "this is a low risk stock with a £25 a share takeover offer imminent" nonsense and the nature of some of your more plausible posts means that you and your multiavatar mate on ADVFN may mean you are fraudsters. Do you operate from the UAE? There is nothing wrong with being delusional, but fraud is different.

Groundling, yes but it is inefficient for me. The divs go into a bare trust: no div allowance, no personal allowance and a disgusting tax rate too to boot. I'd have preferred buy backs. But I am relieved the 55k bopd looks do-able. I am pleased overall.

Pleased with this:
"Drilling activities progressing well following early restart in June; SH-13 expected to come onstream imminently; "

Not so pleased about the div, because of the sky high tax rate I will have to pay, although more cash is nice and should mean the share price doen't bomb except when we go xd.

Off topic.
TM, thanks for that. I am warming to charts, especially after reading Brian M Nelson's experiences as an analyst at his former employer, Driehaus Drucker. He is probably CFA qualified of course (like our Papineau Legris), and has a talk on Youtube "Value Trap: Theory of Universal Valuation - Los Angeles AAII (November 2019)". The fact people like him use charts at all makes me think I am missing something about the value of charts - he maybe uses them to avoid value traps, among other things. Meanwhile I've got to get on and get through Damodoran on Valuation, which looks like a 900 page book on present value! All the best.

“I see NOBULL ON LSE lying again.GKP is not a speculative share.”

Operating in a guided democracy, aka de facto autocracy, like in the KRI (Iraq is the 160th most corrupt country, according to Transparency International), there are risks to GKP that are different from say those to Wentworth Resources (a gas producer) operating in Tanzania (94th). Wentworth resources gets a risk rating of “adventurous” while GKP gets one of “speculative”, as I said before, in the case of GKP’s risk rating.

Usually, the more corrupt a country is, the more problems journalists have:

https://www.hrw.org/news/2021/04/22/kurdistan-region-iraq-flawed-trial-journalists-activists

It is a sensitive topic, so I will leave it there, and it’s not in our interests as GKP shareholders to discuss it in great detail on a public notice board.

The modus operandi of a desperate ramper will always be to downplay the risks and to hype up improbable events (takeover next week at £25) as highly probable, and it is reasonable for people called out for doing this to chuck out a lot of ad hominem at those who call them out, what SurreyScot and his 150 multi-avatar mate on ADVFN do to me, and maybe to some other posters here.

I hope for a super ops update on Thursday but I recognise I can be disappointed: things don’t always run smoothly in this sort of business.

A risk rating is something that can be objectively calculated just like the London Business School used to in its Risk Management Service: it used to publish alpha and beta risk values for every UK listed stock in a quarterly bulletin. Some posters here have the maths skills to produce these figures themselves; I don’t, but I expect I can acquire them quickly if given a couple of months.

Inclusion of a stock in an index does not necessarily change its risk rating, especially the MSCI World Small Cap index covering perhaps quite a large no. of stocks. For all I know, the whole index might have a speculative risk rating! Just kidding.

The proof that I am not lying about GKP’s speculative risk rating is an image posted on ADVFN (post no. 639226.) It also demonstrates how the investment style has flip flopped; just what you expect if share prices move randomly, a feature that would make charts right 50% of the time too, I wonder, but then you have the problem of knowing which times charts are right.