The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
In fact, the RNS was worse than I was expecting. I had modeled 35k per month for the 4th quarter.
I've been very consistent in arguing that the company had considerable payables that needed normalising (and that the reason why there hasn't been an RNS for a while is because there hasn't been a material change to report).
Don't expect volumes and cash balances to have gone up enormously. Hopefully we will get an update this week which will provide more visibility. The company had at least $21 million of payables normalisation to unwind in 2H. That would leave cash broadly flat at its August level if they achieved 35k per month at circa $30/bll for Q4. Also remember that some costs are being deferred and not foregone and that, at some point, capex will need to rise just to maintain local sales. The stock is still pricing a MUCH better scenario than 35k of local sales indefinitely and no recovery of arrears.
"Some of that 700 billion can be used to pay the IOCs monies owed, surely..."
"to cover three months of payroll after public sector employees in the Region went unpaid for nearly 90 days.
Civil servants in the Kurdistan Region have yet to be paid their salaries for the months of September, October, or November. The latest 700 billion dinar installment of the loan will cover the salaries for September."
Just one month of overdue salaries. October and November and December.... still owed. The IOCs are waaaay down the list of priorities.
"OK we can still sell locally at $30 indefinitely before the courts decide???"
Only if SOMO allows it. Suing would likely end that rather quickly. And even if allowed GKP will need to invest to keep the oil flowing.
Martijn Rats, CFA – Morgan Stanley
November 30, 2023 11:41 PM GMT
Formal quota were left largely unchanged, but several countries deepened their voluntary cuts at yesterday's OPEC meeting. Even with only partial compliance, this should prevent stock builds in 1Q and be sufficient to support Brent in the mid-80s. Hence, we leave forecasts unchanged.
Quota largely unchanged, but additional voluntary cuts extended and/or deepened: OPEC countries used to set simple production quota. However, over the course of 2023, this has evolved into a system with official quota and additional voluntary cuts on top from a subset of countries. At yesterday's meeting, the formal quota were left mostly unchanged but several countries either deepened or extended their additional voluntary cuts. In aggregate, these additional voluntary cuts add up to a headline figure of 2.2 mb/d for 1Q 2024. However, 1 mb/d of that is an extension of Saudi Arabia's voluntary cut, which was already in place for 4Q23. Another 0.5 mb/d comes from Russia, which is formulated as an export cut, not necessarily a production cut. Also, Russia's cut is spread across crude oil and refined products, which makes it hard to track. The remainder comes from Kuwait, Iraq, the UAE, Oman, Kazakhstan and Algeria.Only the West African countries saw a revision of their quota, following technical assessments of their production capacity by three independent agencies. Nigeria's quota increased by 120 kb/d to 1.5 mb/d, but Angola's quota came down 170 kb/d to 1.11 mb/d. However, Angola has already indicated that it does not intend to stick to this new quota.Commitment to cuts appears uncertain; expect only partial compliance: The fact that these cuts took such a long time to negotiate, and are still not part of the formal quota, hints at only limited commitment from OPEC countries to implement them. As a result, the impact on our supply/demand balances is likely less than the headline figure suggests. The extension of the 1 mb/d voluntary cut from Saudi Arabia was already incorporated in our forecasts; in fact, we already assume that Saudi Arabia will ultimately extend these cuts to 2Q 2024 as well. Of the remaining 1.2 mb/d headline cut, we assume that, in the end, only half will eventually be implemented. Hence we have lowered our OPEC+ production forecast for 1Q24 by ~0.6 mb/d. Brent forecast unchanged around mid-$80s: This updated supply forecast has flipped our 1Q24 balances from a 0.3 mb/d surplus to a 0.3 mb/d deficit. However, we still see the market turning into a small surplus again in 2Q and 3Q 2024. Across next year, we see inventories building, albeit only slightly. As discussed previously (see The Oil Manual: OPEC's Balancing Burden), we estimate that this inventory outlook supports Brent in the mid-$80s, so we leave our Brent forecast unchanged at $85/bbl flat throughout 2024. Still, this estimate depends on OPEC+ keeping production constrained also at the next meeting, which is sched
US oil production rises to fresh record
Myles McCormick in Houston
US oil production notched a new record in September, with output of 13.24mn barrels a day, as growth continues just a month after the country broke its pre-Covid highs.
Production rose by 224,000 barrels a day, or 1.7 per cent, during the month, according to data from the US Energy Information Administration.
The US is now producing more oil than any country in history just as Opec+ countries curb supply in a bid to tighten supplies and bolster prices.
The growth in American crude production comes in spite of a more cautious approach to drilling being imposed by Wall Street on publicly listed companies and fears around dwindling volumes of prime acreage.
"While the difference between this and current Brent ($79) is significant, it's not massive. Also, importantly, local refineries likely sell their refined products into the local market and the 'arbitrage' versus Brent is likely unavailable."