Member Info for PUTUP

Highlander you really should give the company a call to discuss this. Having a chat with someone can help a lot. FYI an independent consultant was used to make determinations as management are cognisant of the sensitivity around the programme. Oh, and there'd be a few MUCH larger shareholders taking issue with awards if they felt the terms of the agreement they negotiated were not met.

" He'll simply continue to turn the profits from producing @55k bopd and a favourable oil price into shareholder returns, prioritising them over the investment plans required to develop the field."

This is where I'd recommend you think a bit more. It's not the profits from 55k bopd and a favourable oil price that are being returned to shareholders. It's the CRP - historical capex and opex reclaimed. Once that is fully recovered cash flow normalises closer to cash "profits" (Profit Oil less corporate overhead etc). (Cost Oil at this point is current capex and opex. The two cash flows net out.) And once that happens they don't need a lot of funding to do the proposed capex as the bulk of it is not borne by them - again, understand the nature of the PSC. I will leave it at that...

"We don't have long to find out whether you are right or wrong!"

Wasn't it meant to be last December, then January and then February? I guess at some point he might eventually be right, or not.

Wow. BangGong actually putting forward some slightly cohesive arguments. I agree with some of the points made below.

At some point there MAY be a sale of the company; if only so key shareholders can monetise their profits. But to expect that imminently (and based on some of the arguments made to date) is a mistake IMO. The universe of potential suitors is low and none of them are going to be interested pre an approved FDP. Only if there is a massive breakdown in confidence between the company and the MNR would there be a sale soon - and such a sale would be an ugly forced sale with an ugly result for all of us.

As to some of the valuations that have been tossed out for such sale, they're often ludicrous and show no understanding of the PSC, something which any suitor management team and their advisors would have a very thorough understanding of prior to making any solicitation. (I put forward my valuation for $85 Brent (in perpetuity; a bold assumption) and 55k bopd. Even if I were to fully impute 110k bopd as if it were happening today, doesn't at all double the valuation - not even close.) The good news is we aren't dependent on such events to make good gains from the current price; if only people had the wherewithal to actually buy and make a difference. Steady as she goes.

"The VCP was a construct originally conceived to reward Jon Ferrier, Sami Zouari and ‘other key drivers’ for their loyalty post reconstruction. "

There's nothing unusual about the VCP nor its terms. The stock price appreciation has clearly happened. The notion that it was a takeover defense is simply farcical as anyone with any knowledge of M&A would know.

Straycat, you can expect the company to keep on returning capital to shareholders even after the FDP is submitted at the end of the year. They simply don't need such equity capital to keep developing the field.

Well it's in the terms of the VCP. A known known.

Patience Invstrat. Things are ticking along nicely. There's only disappointment when expectations get ahead of reality.

"JF and Sami both collected eyewatering termination bonuses"

And there's another, final, VCP award to come.

The stock remains cheap. My view of fair value is £3.50-4 per share given $85 Brent and 55k bopd production. I'm confident the production target will be hit on time during this quarter. We continue to monetise the CRP and arrears. Buybacks should help provide liquidity to the non-believers and ultimately improve the quality of the share register (less retail). Couple that with good operational performance and, all else being equal, the share price should rise. All without the promises of grossly optimistic takeout valuations and golden crosses. Steady as she goes.

You guys are hilarious. Experts in enormous extrapolation. I suggest merely that I and key shareholders would be happy to convert their holdings to cash at a point lower than $100 per share - a price that would likely represent something like 200x their initial investment, give or take a few 10x - and next I'm chatting with them, over dinner in London, and they're encouraging me not to sell. You just can't let a good conspiracy theory pass you by, can you? Commonsense has no place in any of this does it?

Personally I think there's a little more in this trade (although not at all another 3x) especially as the girls get more and more excited. Besides, I've got to stick around to see X's "massive" golden cross come to fruition...Best of luck all and keep up the good sport.

"At these poo levels GKP ebitda 2022 is greater than its current market cap
Lol"

Show us your computation. When you actually do some analysis rather than spouting repetitive BS you will find that revenues don't exceed market cap let alone EBITDA.

Hint: if you can work out the monthly receipt given an average BOPD production figure and average price of Brent (something people have been doing here with a high degree of accuracy YTD) then you can easily do the computation for a full year at 55k and $85 Brent (or whatever other scenario you care to run). Do the basic maths. Calculate oil sales and make an assumption regarding hedging costs (note 4 to the 6m 2021 financial statements) to get Revenue. Then deduct a couple of the items in note 5 to the 6m 2021 financial statements. Finally deduct Other G&A. Only then are you close to EBITDA. It's not f*cking hard to do.

ATB

C'est la vie 147king. It's just that I have little time for people who invest on - and, worse, promote - hype and hope whilst being too lazy to conduct and present factual analysis. I will wait for Arma to do some work on estimated revenues based on his assumed scenario. (Before presenting his analysis it might well be sensible to back-check it through, for example, 1H 2021 results just to get a sense of model accuracy.)

As regards valuation, I will let you know when I have sold as that will be the very best guide as to my view. (As of now it's a lot lower than your £7.50-£10.) I last bought just below 153p cum div. The last dividend was akin to selling some at 182p. I've not reinvested it given the price action ex div.

Of course, when reflecting on historical GKP prices, in the very least, don't forget that the company has paid away a lot of cash since then (as well as issued a bunch of stock and further stock options in remuneration). Far better, in my view, to support your opinion of £7.50-10 with analysis rather just 'gut feel'.

ATB

(PS: albeit a minor point, Brent set a slightly higher peak at the end of September 2018 than it where it is today. The period thereafter wasn't as much fun. Hopefully the coming year isn't similar.)

"So Putuo, what is annual profit at 85 dollars and 55k bopd?" (sic)

Jeez Arma why don't you at least demonstrate some effort and attempt to come up with a reasonable estimation of, say, company revenues under your scenario? Maybe after that I will engage with you further down the P&L statement. Hint 1: I've given you two of the three parts of the answer already. Hint 2: annual revenues under such scenario are less than the current market cap of the company (despite what X says).

@147King why would lifting costs be proportional to the oil price? They're related to the costs of operation not the price of oil. One could expect a fixed cost component - and hence declining with scale - and a variable component ie per barrel that doesn't change much with scale.

Yes. That’s why I own a bunch of it. But I’m not delusional as to its worth (even at $85 Brent and 55k bopd).

Arma, you need to understand what constitutes “turnover”/revenue. Once again, read the financial statements and their notes. Try to understand the economics of this company rather than focusing on irrelevant numbers. ATB.

Jeez Arma. One of these days you'll actually have to do some calculations beyond Brent x volume, especially when you know we sell at a deep discount to Brent and the PSC determines who gets what.

In your scenario, even if the R factor were to be below 1 and the CRP weren't exhausted, Profit Oil is circa $166m and the CBC payment from this is approx $66m. Take a look at the financial statements and construct your own forecasted P&L statement. Don't be so lazy.

God forbid X and SS be confronted with facts. Are they the same?

Top 10 shareholders for each of:
1-Jun 15-Jul 13-Aug 15-Sep

Lansdowne Partners Austria GmbH 15.29 15.23 15.23 15.22
Hof Hoorneman 11.09 11.15 11.18 11.19 (now F van Lanschot Bankiers)
UBS Group 6.98 6.93 6.90 6.68
Blackrock 5.07 5.03 5.04 4.75
Gertjan Koomen 4.73 4.71 4.71 4.71
Hargreaves Lansdowne 4.18 4.20 4.33 4.25
Interactive Investor Trading 3.51 3.73 3.83 3.84
Dimensional Fund Advisors 3.56 3.55 3.62 3.65
Precision Capital 2.94 2.93 4.24 4.24
BrightSphere Investment Group na 2.89 na na
Barclays Bank na 3.02 3.06

So the only institutional investors in the top 10 to add since 1 June are Dimensional (an insignificant amount) and Precision. The latter has added the most significant amount, 1.3% of company, and may well have reinvested dividends. The rest have either sold down some and/or pocketed the dividends. Retail has increased ownership. So I'm really intrigued as to all these institutions are that are buying the stock. Some names please.

(No other shareholder or group of shareholders owns or controls more than 3% of the company.)

"The rational argument Indrid is that Institutions continue to buy and it would make sense to use dividend return to do it rather than use their cash reserve."

Which institutions?

"They are still accumulating shares."

I'm still waiting for SS to name just two of them. Or if there are so many of them, three. Add some facts to support your opinions SS and I might listen more. Onward.

Not as much sleep as I'd like I'm afraid! Given the risks I, personally, demand a minimum of circa 20% return on equity. But that's me. You may be happy with less. The good news is that the company has plenty of firepower to fund with debt also and that can help drive returns to shareholders. But without clarity on the FDP agreement (and any PSC renegotiation) management likely have only a limited idea of expected returns, let alone the ability to sell those to stakeholders. From what I've seen the proposed capex to go 75k "doesn't hunt" (doesn't pass even a cursory examination). What do you think the return to equity of that $450m is? It all comes down to what return you're prepared to accept and what you're prepared to pay for in the stock price today. Hopefully there are those out there prepared to pay for a lot more than me... The big point is to endeavour to understand what is and what's not embedded in the stock price today. Is investment to 55k and then steady state embedded? Are we paying already (in the stock price) something for going beyond? What upside might there be in the stock price based on reasonable expectations (as opposed to wishful thinking) if clarity beyond 55k improves?

If only X had the wherewithal to light a match

"Whereas mine assume another capex injection of up to $250m next year, a down payment on the on the way to 75k bopd. I accept this may be excessive, but my point is that it's affordable given 55k and $70+"

If by "affordable" you mean they can generate the funds to make the investment then, yes, it is affordable. However, that doesn't mean the investment will generate adequate returns to equity and thus should be pursued. I don't think we know enough yet and I'm not prepared to pay for it now. When and if things become clearer that may change.

"Incidentally, if you stand your projections for next year up against likely out turns this year you're going to struggle to make any sense of your P&L."

I don't follow but it's very late. Will look again over the next day or so. So far I've found my expectations for each month this year more or less accurate, certainly good enough for modeling purposes.