Member Info for pondlife78

Anyone got any idea if there is something specific causing the big drop in value? It’s a small MV so understand it can move a lot over not very much but it’s fallen off a cliff in the last few months.

This is currently trading at slightly more than their net cash value with market cap £160 million and net cash around £130 million. They are making a profit and would continue to make a profit even without getting in on the available contract deal. Their field allocation was also before the Kurds started issuing their own licenses so any ideas why the discount is so high? Just disappointment that none of the previous upside had materialised?

Did Gazprom get a big stake in the export pipeline that Genel uses at some point? I seem to remember they did but can’t find anything as it is all buried under sanctions search results.

Surely the chance that we get some sort of return is worth it at the current price? Money might be locked away for a long time but short of nationalisation (admittedly a real risk) the mine should continue to operate and make money until some indeterminate time in the future. It’s not even affected by sanctions yet.

Honestly, yes I would see this as great news. They have a history of losing when it goes to court and we aren’t in a position to develop the fields for gas anyway so turning the assets into cash (even at a big loss against original purchase price and investment) is fine.

The initial delay to payments was part of the deal between Kurdistan and the Iraqi government for Kurdistan to supply up to 500000 bbl/d oil in exchange for a 12.x% share of the national budget. They would have been waiting for the central funding to come through. It's not clear whether this deal will be honoured now though considering the turmoil that is the main government. We can expect payment at some point though even if the deal does fall through, as the Dana legal process demonstrated that they cannot get away with it indefinitely.
The cost of production is incredibly low and they will still be making money at these prices. Personally, I think the balance sheet should be strong enough to see them through even a lengthy period without payment (helpful to be sharing Tawke with DNO so there is more support). I wouldn't expect much in the way of developments though. Bina Bawi will not happen at these prices since it was only profitable with tax incentives in the first place and they will be reluctant to keep drilling wells unless the money comes through.

Looks like confirmation that the previous board were doing just fine. POX plant on schedule for Q4 2018 as promised and concentrate that they built up could have been used directly in the plant rather than concentrating it for sale and then looking to third parties for more. IRC facility derisking is pretty confusing as well - $120 million guarantee will be lifted given good opertational results, but then comes back in the last 2 years (so it's not actually lifted?).
Either way, looks like POG has turned a corner and it seems pretty undervalued.

Carrying out the share sale openly like this is actually a pretty good way to protect the share price from a prolonged period of downward pressure. It’s just a shame there are shares left with them that will be sold in 3 months time instead.

Taq Taq production would have been affected by oil pipeline planned outage as well - I would expect a boost next month.

GKP have a big discount to the oil price they receive, so any increase in oil price means a bigger proportional increase in revenue for them than it does for Genel. They also have a lower market cap but similar production so if you ignore the value of the undeveloped gas fields they are quite a bit cheaper.

So it looks like al-Sadr is going to be the kingmaker in Iraq. Does anyone have any ideas on how this will affect Genel and Kurdistan overall? I can’t find much info on relationship with KDP/PUK or what the future is likely to look like.

I struggle to see how they could possibly win this case - they knew all the financial information was dodgy at the time, and conducted their own audit over months to arrive at completely different figures. They also looked into test cases to ensure that the chances of success were as expected. Unless information was deliberately hidden from them during the audit (and the numbers they ended up with were similar to the restated accounts after the pwc audit) it is hard to see how they can make a realistic claim.

What are they doing buying what looks like a pretty new company, well outside the core business market, for far more than seems reasonable? Maybe connected to CEO retiring?

Excellent results considering the circumstances, only 40% rig use and still break-even after depreciation. With conditions improving dramatically this could be worth a lot more than it is at the moment. The short term target should be the asset value, which is a 33% upside. Longer term it is going to depend on how much profit they can make and hoping there aren't any currently hidden write-offs of rig value still to come. Either way we are looking at a 10% dividend yield from this at the moment and I am surprised there hasn't been an even stronger price reaction.

Pretty nice reading! EBITDA number could support a share price at more than double the current levels and expecting improvements in the coming years as the cheaper production ramps up. Nice consistent dividend too.

Wow, Ruble is dropping like crazy at the same time as gold is skyrocketing. Couldn't be much more perfect for HGM!

Someone asked about why this had fallen so far after peaking. I'm fairly sure the reason was that they restructured debt including convertible bonds at 100p. This basically doubled the shares issued, with institutional investors that prefer debt (so they have preference in administration) and didn't want to be holding such a big percentage of the company so were willing to sell at lower than the conversion price. This pushed it down to around the 80p level and took the momentum out of the recovery. Any rises from there were met with strong selling into the rise until this point where it seems most PIs have given up. I still feel it will struggle to break through the 80-100p region for a long time purely due to the number of these converted holders who will be looking to sell up and take their profits.