Member Info for PUTUP

Sorry for the duplicate. Not sure how that happened.

"I'd not expect the TNAV to reduce."

TNAV grows at the company's actual ROTE. You'd have to forecast losses for it to reduce. So you can derive from the numbers below returns KBW are modelling: 11% in 2026, 15% in 2027, 18% in 2028 (albeit their modelling obviously goes the other way 'bottom up'). The issue currently (2025 and 2026) is the company has a relatively weak ROTE, well below its COTE (KBW use 16%). Hence a P/TNAV of less than 1 is applicable. But there's good reason to believe that in the future a much a better sustainable ROTE can be achieved. KBW think 2027 is a modestly distant timescale in which actual ROTE gets close to COTE (15% versus 16%). If in 2027 the company achieved a ROTE equal to the COTE required by investors then an appropriate multiple would be 1 (unsurprisingly). If you expect 15% versus 16% then an appropriate multiple at that time would be 0.94. So at end 2027 one might apply 0.94x forecast '27 YE TNAVPS (179p) as a forward stock price. Discount that back to today (or one year forward as a target price) at the COTE. I think you can easily see how they derive a (rounded) one year out target of 140p. Of course, if actual returns exceed those forecast then TNAVPS will grow more swiftly (as would the multiple). I don't have any reason, however, to believe the company will achieve better (or worse) returns than currently forecast by KBW. The only guidance I'm aware of management giving is a 'low single-digit' figure for FY 2025. If all goes to plan forecasted stock gains from here through next year should be healthy.

"I'd not expect the TNAV to reduce."

TNAV grows at the company's actual ROTE. You'd have to forecast losses for it to reduce. So you can derive from the numbers below returns KBW are modelling: 11% in 2026, 15% in 2027, 18% in 2028 (albeit their modelling obviously goes the other way 'bottom up'). The issue currently (2025 and 2026) is the company has a relatively weak ROTE, well below its COTE (KBW use 16%). Hence a P/TNAV of less than 1 is applicable. But there's good reason to believe that in the future a much a better sustainable ROTE can be achieved. KBW think 2027 is a modestly distant timescale in which actual ROTE gets close to COTE (15% versus 16%). If in 2027 the company achieved a ROTE equal to the COTE required by investors then an appropriate multiple would be 1 (unsurprisingly). If you expect 15% versus 16% then an appropriate multiple at that time would be 0.94. So at end 2027 one might apply 0.94x forecast '27 YE TNAVPS (179p) as a forward stock price. Discount that back to today (or one year forward as a target price) at the COTE. I think you can easily see how they derive a (rounded) one year out target of 140p. Of course, if actual returns exceed those forecast then TNAVPS will grow more swiftly (as would the multiple). I don't have any reason, however, to believe the company will achieve better (or worse) returns than currently forecast by KBW. The only guidance I'm aware of management giving is a 'low single-digit' figure for FY 2025. If all goes to plan forecasted stock gains from here through next year should be healthy.

I just have the actual reports and no weblinks. The following are the forecast tangible NAVPS for years 2024A to 2028E from KBW

NAVPS (p) 140 141 156 179 211

The following gives the valuation methodology

Target price - We increase our target price to 140p (from 120p) reflecting a sustainable ROTE of 15% and COE of 16% applied to FY27e tangible book of 179p, using the ROTE/COE formula discounted to 12mths forward.

You can see they look for when the company can achieve a sustainable return on tangible equity (ROTE), compare that with an assumed cost of equity (COE) and discount back from that forward point. It's tangible equity that is available to the company to produce a return. Hence the emphasis in company and sector reporting of ROTE.

" I'm not sure what the projections would be"

Perhaps a good idea to read some institutional equity research on VANQ

It would be good for GKP to not be running oil through a pipeline partially owned by a sanctioned entity.

It may well be foolish to not use Tangible NAV. TNAV per share at the interims was 142. (140 at the end of '24.)

10. TNAV per share is calculated as closing tangible net asset value, divided by the period end number of shares in issue. Tangible net asset value is stated as equity after deducting the Group's pension asset, net of deferred tax, less intangible assets and goodwill.

Agree

So he thinks NAVPS FY 25E is 111/0.5 =222??? KBW expect 141p NAVPS (aka "book"). One or both are wrong.... KBW expect 211 by end 2028. (Report dated 10/10/25.)

In fairness to Itsa "some time ago" was more than two years ago when the stock was falling from 155 or so. It made it to about 110 before recovering. A lot has changed since.

While I do not subscribe to his persistent bearishness, the call for common sense and realism is sensible.

If people zoomed out a little they will see the stock has been trading in the same channel for almost 2 1/2 years, sometimes towards the top end and sometimes at the bottom. We are currently in the bottom half but not at all the bottom end and more or less close to my model's valuation. It would not take much at all for the stock to trade to the bottom of the range which would be in the low 160s/upper 150s. Catalysts could range from fragility of broader markets, missteps in the road to consensual exports/contracts or oil price weakness (expected in 2026). Were it to do so I might even buy some of the stock I sold at 225 back. Until then everything seems to be progressing as expected.

Ho hum.

"- Repayment of £140m+ back payments"

Wrong currency there LongStrong. (And remove the +)

Re dividends, I expect the company will try to maintain the $50 million per annum IF the arrears are being steadily recovered. (Circa 17p per share per annum.)

Maybe.

Sounds like the first is for the stub September period and some part of October. Then the second is for the rest of October. I'm going to leave things as they are for now, but recognise that if the second invoice for the rest of October isn't paid by YE then cash balances then will be commensurately lower. I think this two-step for October is the main reason for the RNS i.e. to caution that the first receipt isn't for all of October (and the September stub) but rather just some of it.

With 6 and a bit weeks left in the year and everything seemingly going according to previous guidance, it's worth thinking about where our cash balance ends up at year end. Of course, the big 'everything going to plan' test is receipt of the first provisional payment. This is expected by the second week of December, although I think there's a small chance it comes a little bit sooner. Hopefully the international consultant is now beavering away and payment is received when expected without contention.

The company had $99 million in cash at the end of June and $105.7 million at 27 August. They've paid out $25 million in dividends since. As we entered exports receipts have moved from in-advance to two-months in-arrears. Before today's announcement, I expected a year end cash balance of about $77 million +/-, assuming receipt of $14 a barrel (80% share to GKP) provisional payment for October production. (I have assumed average production of 42.5k for October.) There's a little bit more exports from end-September and commensurately less local sales paid for advance but these are rounding-error factors IMO. I haven't expected a (provisional) payment for November production before year end. I also don't assume any further receivables recovery before year end other than that from the re-invoicing of costs in local sales volumes until end-September. So... I have been expecting payment for October in early December.

BUT a closer read of the text of today's RNS is potentially concerning...

"Payment for the Company’s share of the first lifting is expected to be received within the next 30 days, in line with the interim exports agreements that were previously announced by the Company on 26 September 2025. A second lifting for IOC allocation of Kurdistan crude exported in October 2025 is planned for the end of November 2025, with subsequent liftings and payments anticipated thereafter."

The second sentence seems to imply that the first invoice/lifting does NOT include October volumes - only September. An invoice for October sent by end of November may not be paid by 31 December. Clarification is required.

So all as expected - just as expected. Brent still tracking as expected also. Ho hum.

“Hopefully GKP will reinstate those "Shaikan payment update" RNS's around mid December and EVERY month thereafter.”

They’d love to break from the monthly payment updates but we should demand they reinstate the practice.

A dividend will be announced with the FY results

As festive decorations begin to line London streets my little model continues to show a year-end value of 175p. So the stock is currently very much in line with that. We've a lot to get through over the coming weeks and months but hopefully all goes smoothly and we get back to investment for growth next year. Ride out 2026. All eyes on 2027...

Blubble, blubble, blubble? No doubt!

Victor, it is extremely unlikely that transaction - were there ever to be one - would be done for cash. A merger today, at current prices, would see GKP shareholders owning roughly 26% of a much stronger, and strategically important, combined company. (Assuming no consolidation of GENL which would make huge sense given their management contribute nothing but a postal address in reality.) Alas, any such deal is likely quite some time off - if ever. (I don't even expect an Oslo listing this year as conditions are not yet ripe for its birth.)

Very good update. I wouldn't call it boring unless by boring you simply mean good news, very solid progress and no calamities. Steady as she goes.