Member Info for PUTUP

"Can your model also come up with a IRR - which is the investment hurdle rate, (Discount rate for PUTUP) that gives a NPV of Zero over the same time period. "

For this calculation you need to calculate the IRR (which is not a discount rate) using a present value of (negative) today's enterprise value (not zero). You'll still need to compare the IRR with your expected WACC for the company. All you are doing is expressing any discount to 'fair value' as a yield spread rather than a value gap. Again, if you don't have a view as to the required WACC you won't have a number you can form a view on as to whether the stock is cheap or not.

"hurdle rates of 10-20 are required?, given the current cost of capital."

The required discount rate for future cash flows (what you have called "hurdle rate") is the company's weighted average cost of capital. The company has no net debt so currently the company's cost of capital is the cost of its equity capital. You said "given the current cost of capital" and hence must have a view as to what that is. At a bare minimum you must have a view on what return YOU would expect on your portion of the equity capital (assuming you are a shareholder or thinking of becoming one).

My view on their cost of capital is the return I expect from my equity contribution.

Supertankerted What do you think the company's weighted average cost of capital is? What's YOUR required return on equity? You can't look at the company's cost of debt alone given, with a net cash position, it supplies none of the capital. Given the risks involved I expect at least a 20% IRR on my investment.

"- further details on 55k bopd programme
- further details on repayment plan of $73m owed"

What more detail do you possibly expect on these two? I think both are pretty well understood.

Dividends should be good but, again, only if they lead to new stock buying pressure. Hopefully the yield attracts new money. Stock buyback provides a good bid. Bring them on.

I don't think anyone in their right mind is expecting anything new to do with a 110k plan to be announced. A reassessment of the currently portrayed strategy would not be a surprise, but I doubt there's a need to discuss it until considerable further thought and development has been made. Expect to hear lots of wishy washy positives about how well the company has been steered through an extraordinarily difficult period and tally ho, tick tick tick, steady as she goes. Shoulders to the wheel and focus on 55k bopd. All good.

"This is a GKP Discussion Board. Not some Aunt Sally Bleeding Heart Club . "

LOL!! This is the funniest post I've read here yet. Au contraire....it's nothing but.

GKP almost back to testing medium term support, which has now risen to 165p ish, having struggled to convincingly clear long term resistance up around 189/190p. Announcement to resume capex associated with moving production towards 55k bopd wasn't unexpected news. Neither was the insignificant impact of partial receivable recovery. What announcements/events will actually lead to buying (or selling) pressure? Yawn.

"just wanted to ask something, am i correct in thinking if a dividend is announced on 31.3 that it will be paid on stock owned on 30.3 so no way of buying more shares to gain more dividends?"

They can set the ex date at whatever they want. Of course you only gain from a dividend if the stock doesn't go ex-div to the extent of the theoretical ex-div price (price cum div less the dividend per share). And any tax due is a cash cost.

"The question I will ask at the AGM is "What steps have you taken to enforce compliance with the FCA supervised listing rules to ensure secret stake building can't occur? Is it the case your bye-laws once did provide protection but have been overtaken by events, such as the move to the main market?"

The enforcement doesn't occur until someone 'appears.' At that point the company's officers (and particularly the independent directors) are required to ensure that such shares cannot, for example, vote on any corporate action. The stake disclosure regime places the principal initial burden on the shareholder. As an investor crosses a threshold THEY are required to report. The company meanwhile does its best to understand its ownerships base. This is one of the reasons they contract Orient Capital to analyse shareholder ownership. (The answer to your first question.) I assure you they have visibility beyond the first 10 lines even if they don't have perfect visibility on 100%. If the company directors were aware of an undisclosed stake they're obliged to make the disclosure. The company must abide by the listing rules. As a foreign issuer they aren't required to abide by the UK Corporate Governance Code and the City Code on Mergers and Takeovers but, like many companies listed on the Main Market of the LSE, GKP has voluntarily committed to both (best) practices. The company's by-laws (as amended) apply. (The answer to your second.)

Surreyscot doesn't understand the listing rules by which GKP is bound

I mentioned this months ago

" as they are also in GKP."

Strange. They don't think they are. And even if they were their stake would be small (less than 2.5%). Another conspiracy theory?

$147m + 17.1 + 2.6 - a little capex - a little opex

Buy Orient Capital's analysis and you will find out. (It will probably cost you a few tens of thousands.) The answer is lots of holders with less than 2.48% each. Just because the company publishes the first 10 lines (a nice round number) doesn't mean there aren't additional lines in the report they've received. You can bet Brightsphere are still there - just under 2.48% (they were 10th at 2.47% in the last report). I'd bet Barcap is their prime brokerage unit and quite probably when they appear it's Schroders. Hard to tell. Even I'm in there somewhere. ;)

Unsurprisingly the receipt of some arrears hasn't moved the stock in any significant way. Carry on. Looking forward to a $75m special dividend and commencement of the 10% buyback absent any untoward events between now and the AGM.

Plus GKP (ordinary) monthly of $18.7m

What's your number(s) for Feb?

"WOW! Seems the arrears payment is based on gross production and as opposed to the working barrels mentioned in one of the other proposed - will lead to a much faster period, about twice as quick :)

The standard monthly payment was within my plus or minus $0.1 million - so no surprise there."

Yup

Helpful comments today from Prince Abdulaziz bin Salman

Thanks. I missed that. That's an extra $0.6m net for January, excluding any payment of arrears. So expect $17m for January plus (still) $1m if KRG upside in profit oil (only) is split 50:50 with the contractor.

If production stays the same for February the receipt is expected to be $18.7, excluding any payment of arrears. If KRG upside above $50 in profit oil (only) is shared 50:50 (GKP 80% of 50) for the full month that's $2.3m of arrears payment. (The delta in net receipt for a 500 barrel increase in ADP is $200k.)

"For average daily production of 43,000 bopd that amounts to $1.2m receipt IF the agreement begins on Jan 1."

EDIT: this is the Contractor Receipt. G KP get 80% of this. It assumes that the upside from Royalties (at $54.774 vs $50) and CBC are NOT shared.

The US EEIA just updated their record of historical figures and added the days for the end of February. Assuming 43k bopd production, and an R factor less than 1, GKP should receive approximately $18.1 million net for February, excluding any part payments of arrears. 78.7% of this expected receipt is from Cost Recovery, 21.3% from Profit Oil net of CBC. If the KRG and the Contractor split the KRG's upside in Profit Oil (not Royalty or CBC) from $50 oil 50:50 (for the full month of February) GKP will receive 80% of $2.79m or $2.2m instalment of the payments past due (worth 1p a share).

"So payment will be 0.8*0.522*31*44400*0.5*4.77 so just under $1.4 million IMO"

Calculate what the KRG would get from profit oil at $54.774 oil (average price for January) and then again at $50 oil and divide the difference between the two by 2. For average daily production of 43,000 bopd that amounts to $1.2m receipt IF the agreement begins on Jan 1.