Member Info for PUTUP

"trying to mop up the ocean with a house mop"

On the contrary. Pro forma for the receipt of invoices for oil sales for November and December the company will have in excess of $300 million in cash. Its current market cap is $592m (circa $621m on a fully diluted basis). The company can easily afford to buy 20% of its market cap at these prices and still be able to announce dividends alongside its YE results. Given circa 50% of the stock is in solid institutional/UHNW hands who are unlikely to sell into the buyback at these levels that could translate into a steady mop up of 40% of weak retail. So it *could* have a powerful dynamic on the composition and quality of the share register.

Even $120 million of buybacks and $50m of YE dividend (you could even double that last figure) would still see it with cash in excess of its debt by the time those are executed/paid.

If anyone doesn't like increasing their ownership at these levels they can always sell into the buyback.

no clue Opu

Don't worry TH, Opu has never been one to study and achieve a grip on company fundamentals (or financial fundamentals - for example, he still thinks dividends create value). I'm with you: 55 k by end Jan/early Feb - at the latest; no new dividend until YE results; and buyback very soon.

BB "when viewed against the leverage that MNR currently has over the company's mid-term financial planning - in relation to the updated field development plan, the gas issue and the move to 75Mbopd."

Do explain? I value your insight but I'm puzzled by what exactly you mean here. I don't think substantial leverage exists until the CRP has been normalised. For now, we can keep recovering substantial CRP via Cost Oil with minimal investment. That's in our favour. Once the CRP has been normalised there will be greater pressure to grow again. But then it's not the company that bares the bulk of the capex burden but rather the MNR (circa 80% of the investment falls on their shoulders and not the Contractor).

Well, don't forget there's one more vest under the VCP later this year. I'm sure that will rankle your toes. And then there's the LTIP...

Why? It was due and they paid. 'nough said. Take the good and give management some credit.

(Apologies if this ends up a double post but my earlier attempt isn't appearing)

Why? Probably because "they're doing just fine." :)

Sep 74.4886
Oct 83.5381
Nov 81.05

Yes, the numbers tally to within one decimal point.

"Buyback and more dividends incoming."

Agreed but just remember they don't create value (unless there's a big gain to be had from optimising the capital structure which doesn't happen until cash is well below $100m) - they merely distribute it out of the company. But I'm happy to increase my ownership share by not selling into a buyback at these levels.

Not that I'm not happy and still consider the stock very cheap :))

What's amazing is that the stock went up 10% on the news. A fully diluted delta in excess of £40m - more than the receipts themselves. Did people think before today that they weren't going to get paid at all? Plus ca change...

Let's keep an eye out for some real operational news...

Timing of preparation is utterly irrelevant. The company's revenue recognition policy is spelt out in the notes to the accounts. Interpret it as you see fit. But the accounting isn't important at all...

Closer to $245m

Re accounts, the following is more important for revenue recognition than when the payment cleared:

"Revenue
The recognition of revenue is considered to be a key accounting judgement. The Group began commercial production from the Shaikan Field in July 2013 and historically made sales to both the domestic and export markets. However, as the payment mechanism for sales to the export market continues to develop within the Kurdistan Region of Iraq, the Group considers revenue can only be reliably measured when the cash receipt is assured. The assessment of whether cash receipts are assured is based on management’s evaluation of the reliability of the Ministry of Natural Resources’ (the “MNR”) payments to the IOCs operating in the Kurdistan Region of Iraq."

I wouldn't bet against it being booked for 2021 but inn the end the accounting is much less important than the cash flow itself.

Sounds like you should sell up and move on. The old GKP died in 2016.

An exception is the CFO

They're doing just fine

TH, what's your estimate of the GKP share of the CRP as of the end of the year? (We began the year at 80% of $548m or $438m.) Assuming 46k of production for each of November and December, I'm estimating it stands at around $300m or slightly below. Of course, we're not going to receive payments for the last quarter (and September) by year end (and so the published year CRP may be higher as a result) but those billings are 'production good'. I'm assuming the guided $55m of full year capex is GKP's share and not a contractor figure. If I have this wrong then the GKP CRP is lower by $11m.

No idea. But if you expect only 10 payments next year then the payables period is, by definition, extending further. I expect 12.

"October will be nearer the $33 million , imo"

$32.5 plus circa $7.6 in arrears. 78% is CRP recovery.

"$360 million of revenue for 2022 will do very nicely"

I see Opu has (finally) gathered a bit more reality when it comes to estimating revenues. What are the key assumptions behind this estimate and what is your estimate of the current level of the CRP?

"monthly income"

Err revenues or receipts aren't income...

"if we collect the $36m arrears that will be outstanding after this week's September 2021 arrears payment of $4.9m is received"

I think you will find this arrears isn't revenues. It reduces a receivable; the revenue has been booked. Check it with the company. That affects your 3rd paragraph... Focus instead on the CRP and when Cost Oil is merely recovering expenditure of two months (or so) prior. Revenues may fall because production becomes PO rather than CO and we get 30% (or less) of that rather than 100%. Much more important than the (comparatively) little bit of arrears. For now, however, the share price has embedded in it $0 value for Profit Oil....