Member Info for PUTUP

Straycat, given you're a thinking man you might want to look at the following approach, a sort of 'sum-of-the-parts'. GKP currently has 3 basic assets: its net cash on the books at any point in time, the CRP which it is monetising at a rapid rate now, and the free cash flow it makes from Profit Oil. You can add in the arrears but that's insignificant now (about 3p per share) and fully recouped via February's production. I expect the CRP will be fully recouped by Sep/Oct of this year but it is important to model its level between now and then according to your own oil price and production assumptions. After that you've just got the two items. It's easy to pro forma net cash as of March 29 (last disclosed figure) for the receipts since, the dividend and the receipts due for Feb and March production (given they can be estimated with high accuracy). You can also model the CRP relatively easily with a degree of accuracy that will suffice for a valuation target. Then figure out what you think the company makes from Profit Oil at a production rate of, say, 50k per annum and PV that free cash flow stream. (Don't forget to account for lifting costs, direct Shaikan G&A, corporate overhead expenses, a declining WI in profit oil over time etc.) Add all that up and divide by the fully diluted share count. Definitely a worthwhile exercise.

Good luck!

Given few here can figure out when a stock is ex dividend versus cum dividend, and how to adjust for said dividend, I very much doubt too many people can read the tea leaves of a dividend adjusted chart. :)

Nope. You have to subtract the dividend from yesterday's closing price. That's the base to be compared with today's close.

Up 6.5% is a good day in anyone's books. I hope it sticks tomorrow.

"Thank you everyone for your replies. I am better educated now"

I suspect a lot of people are going to be very disappointed to find they don't get the dividend when buying today and find they're buying 6% above yesterday's close. Will likely be a good lesson to learn.

https://www.google.com/finance/quote/GKP:LON

https://www.londonstockexchange.com/stock/GKP/gulf-keystone-petroleum-ltd/trade-recap

28% short

The bet was regarding GKP making $65m a month. You had said (in March I believe) you expected them to be making it "for the next 12-18 months". When, on 11 April, I asked you to clarify when exactly you expected this 12-18 month period to start you back pedaled to "November." I'm expecting Brent to rise to circa $130/bll this year. Even then, GKP don't receive $65m a month. If capex took an almighty boost in the second half receipts might just clip through $65m in the last month of the year but only because they're recouping money spent a few months prior. Free cash flow is much lower. I'm confident in my view.

Since previously I've been asked for and have provided my price target, here's an update. I adjust my year end price target to 275p (so circa 15% above current). This is my personal view. This reflects (amongst other things):

- the stock going ex div today (the target is still cum dividend for the announced YE div)
- an increase to my assumed long term average price of Brent to $85 ($80 previously)
- a lowering of my assumed average WI in profit oil down to 20% (22.5% previously) given the R Factor will pull it to about 27% even by YE 22 (the 20% is likely too high)
- a sharply weakened £ of late
- production of 50k versus 55k previously. The target does not reflect yet the value of grinding production above 50k.
- increased nil-cost stock option issuance

Good luck!

"So anyone choosing to sell today does not own the shares in real time as far as their account is concerned BUT they will still appear to own them when the Company checks the records tomorrow, so they get the dividend."

You own them until settlement. It's that simple. Settlement is two days after trade date. Sell today and you own them for another two days. Buy them today and you don't own them for another two days. Why is this so hard for people? At 241.50 the stock is up 5.82% today. (Even Google gets that right.)

"Sorry I had the same question.
But it seems some say yes, some say no.
Anyone in the Know can actually confirm? Thanks"

How about the London Stock Exchange's view. They have a little thing on their quote page for GKP. It says Special Condition XD. XD stands for ex dividend. If you buy today in ordinary trading you don't get the dividend. Quite obvious given T+2 settlement and a record date of tomorrow.

Depends on your view of production and the price of oil (obviously) as well as how the guided $85-95 million 2022 capex is spent. (For now I have assumed the latter is equally spread over the year.) It's not that far away, although there is a near 3 month delay before the payment RNS hits and it becomes clear to all. Woohaha!

Basically the same as the FY results presentation.

It takes time to do build and do stuff. It's not (just) a matter of money. It's not the company/contractor that pays for most of it. It's the KRG/MNR as they forego profit oil (of which they get the lion's share) as production is divreered to cost oil (contractor cost recovery). The company doesn't need a war chest nor bonds. They just need working capital.

Barely (if at all) keeping pace with the declining, ****ty £. Shame this dollar producing/dollar cost asset is quoted in pence.

RNS pretty much as expected. February and March can also be forecasted with a high degree of certainty.

No news.

Later today we get the EIA update for the last week which will help fine-tune the estimate for April. The CRP continues to be converted to cash and paid out. (My estimate for GKP's share as of CRP end March circa $172 million.) Pro forma cash as of end March circa $325 million.

"Funny that they never increase the price by the amount of buyback and cancellation. "

Why would they? Price stays the same but share count falls in the case of a buyback (ceteris paribus)

And all day tomorrow

No and no. Read what I said gain.

If only we could filter out your tambourine banging.

Dividends are neither here nor there. They attract attention but don't create value. What's left in the company creates value.

"Why don't we repay it?"

Because the bond's terms don't allow the issuer to do so

" it puts up a little deterrent to possible Buyer."

Rubbish

" i wont be surprised if we move to announce another Bond Raise shortly after to the tune of £200 Million , to fund the next stage of FDP even though we wont necessarily need it"

I highly doubt they will do a bond. They only need much more short dated financing - as long as their receivables period plus a buffer. (So, say, about 6 months.) That's a working capital facility requirement and not a long term bond.

"as we generate sufficient cash from on going operations,"

You should really try to understand what generating cash means and, more importantly, what free cash flow means, particularly as we head towards the 4th quarter.

"It trades between those shareholders leaving and those remaining. "

No. They 'trade' amongst themselves. Those that sell and those that don't. The ones that don't are actually buying more of the company. They're foregoing the distribution in return for a higher percentage ownership. These decisions are each shareholder's responsibility. The company is distributing cash only, just like a dividend. If you don't like a company distributing excess capital you won't like it however they do it - buybacks or dividends. GKP has tons of excess capital, money it got from shareholders and it no longer needs. Cash way in excess of its current indebtedness. Cash that it has no hope of deploying at a return greater than its cost of capital. (That is what it is returning. It's not returning much true profit.)

Good luck!

Straycat

I'm not a fan of Jaap.

As for not reserving more of the bought back shares for future LTIP/VCP issuance, we've discussed this before. In reality the cancellation and then new issuance makes little difference, however I would have liked them to have bought back more particularly when the stock was depressed - not because the company gains from it but because I would have gained from increasing my ownership at those levels. I would not have sold into the buyback (while others would have). Management were under a lot of pressure because of undue speculation that the shares in treasury were being held for another purpose. They could have resolved the situation (as they did) by creating a trust and ring-fencing them for future stock option exercise. They could have cancelled less. But they were being screamed at by a lot of, perhaps, naive shareholders. In the end they reserved an amount sufficient for a very short term horizon and cancelled the rest. It makes no difference that they then had to issue more shares. They aren't getting any consideration for them anyway (nil-cost options). It's just a shame, in my view, that they didn't buy back more (whether cancelled or reserved in an EBT or not) earlier. Were they to conduct a buyback at levels much higher than today I might be inclined to sell into it.

It's a shame there isn't that much happening on a fundamental front that we can chat about. Brent is off a good chunk today but is almost back to support levels. Risk appetite for equities generally has clearly declined and risk-free rates are up - all that adds up to higher discount rates. Outside of the short term oil price there's basically no news with respect to the company's prospects. All a bit boring really.

ATB