Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
"any fixed fee for reimbursement by federal Iraq is problematic because it doesn't adjust for changes in oil market prices and is inconsistent with the manner IOCs are reimbursed in federal Iraq or around the world."
Yup. As he said.
Even if this is "the deal", there's still lots of questions. Who pays the IOCs in Kurdistan? If it's the KRG then they are heavily exposed versus the contracts with the IOCs. For example, $20.60 per barrel is still too low to pay GKP/MOL what they are owed when they are recovering historical costs (assuming $80 Brent and a $32 discount) - how do they fund the difference? - and offers very little room even thereafter for payment of arrears. And, of course, it's even worse if the oil is sold for better than $48 a barrel down the pipeline.
Likely quite some time before this is resolved.
"This company is pure Gold. Unfortunately it is ripping off the people of Iraq. They have paid out more in dividends to share holders than the current value and that does not include payments to the government."
They've just been paying out the money pre 2016 stakeholders put in...
And while it's a distribution of value and not a creation of value it's the bid we desperately need in this stock. On top of that, it might squeeze the shorts in a way the inzy winzy tiny weeny top ups from those here cannot.
Volumes are good news as it helps keep the field ticking over. Pricing is a shocker. Current cash flow still flattered by historical cost recovery. But good (modestly) to slowly whittle down the CRP balance and keep the lights on. Current share price still demands a return to exports in the very near future. Shame there's no update in that regard.
"It happens when the total payments is equal to or larger than twice the costs, R factor = 2 or more."
Well, yes. But with investment capex the rate of change in the R Factor slows. We are a long way from the baseline level of volume required for tipping point.
"given payment stability and reliability, GKP should load up with capex and follow the self funding premise of the business model"
That's the point innit? It works only if we can recover costs. If they crush cost recovery we can afford commensurately less capex. Funny how costs are being debated heavily in Iraq at the moment...