Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
As I said two days ago (before the latest, short-lived giddiness):
" they received $25 in February when Brent averaged $83.5 a barrel. Clearly the company had to accept a lower price to move greater volume (a strategy which I think is smart as keeping the field ticking over is good). Brent averaged $85.4 in March, up 2.3% on February. We await to see how the company did in March... $35 would be great, but I wouldn't count those chickens yet."
The current share price expects a lot more than local sales
"Their subsequent announcement that they were only being paid 25, albeit for larger amounts, disappointed the market. "
Yes, they received $25 in February when Brent averaged $83.5 a barrel. Clearly the company had to accept a lower price to move greater volume (a strategy which I think is smart as keeping the field ticking over is good). Brent averaged $85.4 in March, up 2.3% on February. We await to see how the company did in March... $35 would be great, but I wouldn't count those chickens yet.
Ugh, I've no idea what you just said but I think you forget that there are two sides to the ledger. One side is the making of value (+ to equity value) and the other is paying it out (- to equity value). If, and only if, the first is higher than the second does equity value grow. Note, you can always 'get value out' of a publicly traded shareholding by selling some. There's no need to wait for the company to distribute value to you.
And where did the ability to make 'massive' (yes, supernormal) dividends come from? Over the last three or four years GKP recovered the bulk of the CRP (creating value for current holders by recovering the expenditure of previously wiped out capital contributors). They could then pay it out to current shareholders. Very little came from true, lifetime, project profit generation.
Investors 'might' lower the discount rate but that doesn't change the fact that money went out the door. "All else being equal" means just that. Personally, I don't 'value' dividends at all (and would not alter my discount rate as a result of them). To me, the value the company can actually generate is the only thing of worth (and builds share price) and not that it decides to pay some of that out. You might feel otherwise and if our difference of view is great enough then perhaps at one point I will sell to you.
And, yes, the best possible source of capital returns is recovery of the CRP much of which is in the invoices that are now long overdue. But, as I said, $25 per barrel or even $35 doesn't allow a lot of gross field sales headroom for those to be paid. For that, as mentioned, we need a return for exports. The next best place is a combination of both the excessive cash sitting on the balance sheet and the little biddy bits of CRP that are being recovered each month via local sales - there's still $50-55 million slowly being recovered. (Remember that current revenues are still flattered by excess cost recovery - that little bit of the CRP that has not yet been invoiced.)
"The share price is low enough to offer the prospect of value accretion through capital expenditure in that direction (unlike previous occasions)."
A buyback isn't "capital expenditure". Money leaves for nothing in return. It's distribution. But you, as would I, might feel that increasing your relative ownership at these levels (by not selling into the buyback) is a decent trade. The success of that too, however, depends on a return to exports via the pipeline.
"No problem if I’m wrong because @ 35 dollars a barrel 108 p and a reasonable profit margin"
I love it how people expect $35 when the company was last paid $25... a 29% lower figure.
Just for kicks I plugged $25 per barrel FOREVER into my model. Without arrears recovery (there isn't room for it at those prices) it suggests a fair value for GKP (50k production in perp sold at $25 and assuming the current contract remains intact) of 83p per share. (£1 year end discounted at 20% to end April.) The current share price assumes a LOT better scenario than limping along forever with domestic sales at $25 a barrel. The equivalent but assuming $35 a barrel sale price is 114p. So you could say the (bullish?) $35 per barrel scenario is pretty much fully baked into the current price already. We need a return to exports and recovery of arrears to make appreciable gains.
As for dividends (or buybacks), yes maybe they pay out a little of their excess capital. But the hint is in the words "pay out" - the value of the company decreases when funds are paid out and all else being equal the market cap reduces accordingly.
Always better to get the currency right... (I had used 1.2639 for Cable. FD shares o/s 230.868 million.)
Cheap for good reason.
All of this is about screwing the Kurds. Don't think Iraq/Turkey are quite done with that yet.
"Unless Weir is a special manager (which I doubt) then Genel are in a lot of trouble."
Straycat, it seems you are the one predicting gloom and doom...
Genel has a net cash position of $120 million even after reducing their debt by $26 million. Their cash burn is modest and they expect to maintain a net (of debt) cash position of at least $100 million throughout 2024. Their capital structure position wouldn't appear to be materially different from GKP's. And they face the same risks and challenges...