Member Info for PUTUP

After 13 years we've gotten to 42k bopd guidance for the current year. Hopefully the next 12 are dramatically better (although I don't expect much progress in 2026).

(yet again)

From the Main Market Admission Prospectus available from the company's website:

"A Commercial Discovery was announced by the Company in August 2012, therefore the Shaikan

Contractors have the exclusive right to develop and produce such Commercial Discovery for a period of

20 years from the date of such Commercial Discovery, with an automatic right to extend for an additional

period of five years. The right to develop a Commercial Discovery for up to 25 years following the date of

the discovery is a separate right in respect of: (i) crude oil and associated natural gas; and (ii) non-associated

natural gas. If, following the expiration of a development period, the Shaikan Contractors consider that

commercial production in respect of a particular production area is still possible, it may request to extend the

applicable development period for an additional five years."

Starsalign - just a little 😊

Invstrat, not holding my breath for interest and, in fact, I'm wondering if/how they will recover the profit oil component of the arrears... Touche but still seems to be challenging for many here

Starsalign, it would be a (provisional) payment to the Contractor (80% GKP/20% MOL) in kind or otherwise. So basically invoices as before, $16 paid. (Entitlements expressed in $.)

With a return to exports, the Shaikan Contractor would currently receive a little over $12 a barrel (current direct costs, opex and capex recovery, plus profit oil, gross of the CBC GKP pays) were it not re-invoicing the costs in the receivables. (Basically $7 per barrel in cost recovery and a bit over $5 per barrel in profit oil gross of CBC.) I expect the Contractor to keep re-invoicing the cost balance in the receivables and thereby, through this mechanism, slowly recover the arrears (or at least the cost oil component thereof). This would lead to recovery of the cost component of the arrears over about 1.5 to 2 years depending on volumes and prices achieved. I expect them to receive only $16 even if such invoices exceeded $16 per barrel (which they would slightly at least in the near term, gross of CBC). In other words, the provisional $16 (and volumes) will cap how fast the (cost component of the) receivables will be recovered. In this scenario, the Contractor will remain incentivised to keep current capex and opex as low as possible until they've recovered the historical cost component of the arrears.

Let's see what happens. As always everyone should DYOR and not be afraid of doing a little mathematics.

Good luck! Don't confuse the cost of transport to the pipeline with the pipeline transportation costs. The former have been part of recoverable costs while the latter have always been part of the price discount. Regardless, it would be a brave person that expects no price increases from Turkey.

Again, who knows? The question is what's a sensible assumption until we get more information. At today's stock price, the market is pricing in a lot more than current production either way (at least at RRoR I would find sensible anyway).

I don't think he knows yet TBH.

Current pipeline agreement still has a little bit to run. A new one will have to be negotiated.

The cost of transport through the pipeline will certainly go up. Remember, transportation costs were part of the old $23.20 discount to Brent (before the KBT discount). How much? Who knows?

What's 100% -20%?

20% of remaining position sold today above £2

"If so, then GKP could get c.$15.20/bbl with Brent @ 66.24 as I type..."

That would include arrears recovery. It is how I expect the arrears to be recovered - at least the cost oil portion - by re-billing the cost element. Well, as much as will fit within the $16 per barrel.

"the devil is in the details..."

Especially what the discount will be given they added a further KBT discount of $9 just before the pipeline closed.

Let's see what happens.

🦆🦆🦆

"that personally I don’t understand. "

'nuff said

Good luck! 🫣

Invstrat, I do think there might be - and I would encourage - consolidation of the IOCs in Kurdistan. I just don't hold the same pipe dreams as some about being taken out at a massive premium. $1 of cash flow will never be worth $5 to someone else.

"Do you not believe that once the written agreements are signed and in place, and the pipeline fully open the SP will be a lot higher than where it is currently. PUTUP I am not dreaming I'm being realistic."

Not much higher. A lot is in the price already. But more importantly, you had said:

"I'm guessing once all this is settled we are prime for a Takeover $$$$"

No I don't see a Takeover $$$$ happening in the remotely foreseeable future.

Just to clarify, I was talking about my 'bottom up' calcs below for total payment (net of CBC) fitting within a $16 total payment cap. I think you're looking (and asking) at it the other way around. A $16 payment to the Contractor will be split 80-20 but then only GKP pays the CBC which is a percentage of profit oil as you know. Again, we don't know if the $16 is only for costs, costs and profit oil, or costs/profit oil/CBC. Lots of detail is needed.

"Ie $3.20 to MOL?"

A bit more to MOL as I was using the amount net of the CBC that GKP pays. We can only guess at this point as to how this all pans out, but I am confident, and I think the market is confident, that exports will restart in the near future. I would hate to see, however, that a $16 cost cap and arrears recovery crowd out the ability to begin drilling again. We need both new wells and the water handling equipment to get to 50k + in 2027. If arrears have to be recovered through the $16 cost cap then they will weigh on investment through 2026 and 2027 pushing growth off yet another year. I certainly don't expect GKP to be willing to invest in the CRP until the arrears have been next to fully recovered.

"I'm guessing once all this is settled we are prime for a Takeover $$$$"

Keep dreaming

The good news is that arrears recovery by re-billing costs previously invoiced in the arrears almost 'fits' within a $16 per barrel envelope for GKP. (Close enough anyways.) The bad news is that would provide no room for expansion capex which is badly needed to reverse field production declines. The hatches would have to remain firmly battened down.

The devil will be in the detail - once signed and announced.

not interesting in a ******* contest but if someone is going to lecture others on seeing this treble since the 60s - almost 6 years ago and only on a relatively small number of days - then they ought to confess as to how they did during that long distant and brief time. he might also mention that selling above £3 in mid '22 is still to be bettered. no, investing in gkp (even from 2020 until now) has not been so straightforward.