Member Info for PUTUP

I'm not worried about the time value of money. It's not significant. MUCH more important is price and volume. I agree I might find that my 46k is a bit high (but only 2% off yours). Circa $86.51 locked in for January sales is great and the best for a long while.

The monthly receipt for November sales has largely been a given since early December. So is the receipt for December sales. And January sales. Apart from any deltas associated with imperfect visibility on volume and the very minor impact of timing they're all 'as good as cash'. But I'm happy if the stock pushes higher.

calm down unb1, you're going to wet yourself

So what are you punters thinking?

I have pencilled in 46k of average production for the month. This might prove a tad high given production issues. Let's see.

Brent average for month 81.05
Discount 21.1
Days in month 30
Production bopd 46,000

Gross Field Sales 82.7
Royalty 8.3
Net Field Sales 74.5
Total Profit Oil 44.7

Contractor Cost Recovery 29.8
GKP Cost Recovery 23.8

KRG Profit Oil 31.3
Working Interest Profit Oil 13.4

GKP Profit Oil 8.2
GKP CBC 1.6

GKP Revenues 32.0
GKP Net receipt 30.4

% Cost Recovery 78.3%

GKP share of pie 36.8%

GKP Arrears 6.9
GKP total receipt 37.3

"As a result of the compounding effect, if the dividends were immediately reinvested on the ex div date, not the payment one, that 251p is further reduced to 236p.."

You should also factor the additional stock issuance, particularly that for the VCP. And, frankly, the GBP:USD exchange rate given it's a bit of a quirk that a USD producing and cost-based asset is quoted in pence. The market cap of GKP II is now at a new all-time high.

The level of the CRP places a significant cap on cash generation next year as circa 78% of cash receipts is recovering it. That's why it's important to get an update on its level. As of December 31 2020 it was $548 million - GKP share being $438 million. It will have reduced a lot during 2021.

Brent has traded above $90 for three days now.

The more relevant question is: how much should one change their expectations for the average oil price over the next year, 3 years, 5 years, 10....in response to recent spot strength? Much tougher...

Current strength supports my proposition that the CRP is 'near cash'. After that, about one year from now, it gets more 'interesting'...

And a buyback doesn't return cash to shareholders? (If you want cash but elect not to sell it's your problem.)

""decision re dividend was determined elsewhere."

this inept BoD are incapable of deciding anything then."

I think you misread the post. We were talking about fin PR firms. I was commenting that likely it wasn't the fin PR firm that suggested the dividend but rather the board that made that decision.

"You would get 10 percent in dividend in February you idiot."

"Of course the flip side is the remaining company, all else being equal (hopefully things don't stay equal), is worth commensurately less as cash is paid out. "

Only a fool would convert 2022 dividends into a yield

Swat1, nothing wrong with banking profits

I've done tons of RNS and don't find fin PR add much, as I mentioned.

You can bet the bulk of the drafting (of both releases and reports) is done by more junior people and submitted to the 'authors' for their comment/approval. And, yes, there can be long silly word-smithing debates but that's just fluff around the edges. The core content and, in this case, decision re dividend was determined elsewhere.

Not prepared to pay anything today for greater than 55k. Wait and see as, I agree, too many variables.

I had my year end target of £3 on the assumption of 55k and strong oil through 2022 (effectively making the CRP 'near cash' alongside existing net cash). Arguably that should be lowered a tad. And of course I'd mark it circa 17p lower when we go ex-div.

Straycat, unsurprisingly I agree with you on buybacks (for cancellation or to meet option conversion, eg the VCP and LTIP, in lieu of new stock issuance). Perhaps they will activate it after the stock goes ex-div. Who knows?

One thing regarding the R factor. The rate of change in the R factor can be slowed a little with new capex but not much when we have such high oil prices and consequently great revenues. The size of the capex just isn't big enough.

Of more interest, imo, is the rapid recovery of the CRP that we are experiencing - albeit slowed slightly by the failure to push to 55k early this year rather than later. The company can easily pay out the entire balance of this recovered CRP during the course of this year, albeit I don't expect them to do so fully. I expect another $100m dividend with YE results and another $50m with 1H 2022 results if oil stays strong. Alongside buybacks. Even then they will likely have excess cash. The bond will simply be repaid when due in July '23. Of course the flip side is the remaining company, all else being equal (hopefully things don't stay equal), is worth commensurately less as cash is paid out.

Once the CRP is normalised, which I now expect sometime in Q1 2023 if Brent holds at circa $80 for the year, the company can in effect self-fund circa $300m of capex per annum (at $80 Brent and 55k production). That's the net to GKP. (Basically just work out how much production can be cost oil under the PSC.) Contractor capex could be as much as $374m. So you see there's plenty of 'base' production to meet FDP. Given in this sort of situation capex spent in, say, March 2023 is recovered in May or June, the burden of such is largely borne not by the Contractor but by the KRG. From this you should see that the R factor will continue to push higher rapidly.

Given your investment have you firmed up a view on what value you are prepared to pay today for production beyond 55k?

I think you're giving financial PR companies way too much credit. In my experience they do extremely little when it comes to such corporate communications. The dividend will have been the board's decision alone. The only time they ever add value is via press 'management' during a corporate action or crisis (something you won't ever see directly). They do next to nothing in relation to RNS releases such as the one we had yesterday and the decisions that lead up to it.

One edit to this: the 12 million needs to be net of the 1m in the EBT. So add 11m.

"Shares Outstanding: 212,869,955"

FYI LuckCounts this figure is wrong. As of June 30 there were 213.731m in issue (note 15 to 1H results) PLUS there is probable dilution (for zero consideration) from another 12 million zero cost options (see note 8 to 1H results "Effect of dilutive potential ordinary shares"). Far wiser to use the fully diluted figure which adds those two together.

The timing of the dividend is neither here nor there. I'm much more focused on the company's ability to generate cash rather than pay it out. As should you be.

(A buyback has the potential to shift the composition of the share register and so has much more interesting potential than a dividend.)

No real surprises except the SH-12 news and lack of buyback. Oh well.

An update on SH-13/14/15 is a must, obviously

Total cash received 2021 $232.4m + $44.6m of arrears for receipts relating to 2021 sales plus they received $14.1 for sales relating to Dec 2020 production in Jan 2021

Invoices for Nov & Dec 21 Still waiting on 1£fish for his estimates here (I have my own) Hopefully we at least get production updates for Nov/Dec in order to firm these up. Both are as good as cash. January almost in the bag as well at great prices.

Cash balance at EOY They have already announced $176m as of Dec 16. No further receipts before end of year as Sep/Oct didn't hit until the new year. So subtract 1/2 -1 month's opex, capex and G&A depending on date of cash balance provided (normally a date in January). You can already pro forma for receipts in relation to Sep/Oct 2021 sales. Therefore shouldn't be any surprises here.

CRP and R factor. It would be good to get an update on these but personally I don't expect them until YE results. Fingers crossed but let's see. (You can model both with reasonable accuracy; certainly well enough anyways. The CRP will have fallen a lot and the R factor risen a good deal.)

Dividend/buyback strategy. This is the biggie ..... along with any progress on:

FDP. I'm not expecting production to go much above 55k at any point this year (even with early agreement on FDP) for obvious reasons

Outlook/guidance for 2022 capex and opex (is it lowered from $2.5-2.9 per barrel at the Contractor level)

So no view at all on Nov or Dec receipts? The oil has been pumped and we know the price it was sold at with reasonable accuracy. Sure, you don't know the exact volume but you must be able to form a view on that. The rest is a simple calculation.

BTW 10% of $100m is less than 4p per share. Rounding error given the day-to-day volatility of this stock. And yet you felt the need to scream its importance... Hmm. And you think the risks are such that you discount a cash flow of known quantity one or two months out at 10-15%. That's an extraordinarily BEARISH view (and an exorbitant cost of capital) to have on GKP. I'm much more bullish. (Thankfully you don't do pay-day lending or other receivable factoring.) I wonder how much you discount an uncertain cash flow one year from now - or two years - or 10. Don't bother to answer.

PS: I don't assume anything. But some people demonstrate it time and time again.