Member Info for PUTUP

Morgan Stanley published their latest Oil Manual Chartbook today. 100 pages of informative charts covering supply, demand and balances. Strongly recommended reading (if you can get it).

Anyone? A long time to wait until the YE results. What events are expected in between?

OPEC+ raise production quotas once more...

Just a retired guy investing my money

The need for water handling has been flagged since early '22. Perhaps prior to then it was only trace elements and not an issue or perhaps JH has been more transparent about the issue than JF was. Let us know what IR say.

Email Aaron Clark with your question. SH-18 was, I believe, still being drilled when exports shut down. This was from 23 March 2023

"· Continuous drilling programme delivering improvements in drilling performance

o SH-17 drilled, completed and brought onstream in February 2023, under budget and ahead of schedule

o Drilling of SH-18 progressing well with expected start up in Q2 2023, in line with prior guidance"

So clear SH-17 seems clear. Ask re SH-18.

Management have guided to "field declines of 6-10% per year" as recently as January this year. (And water handling has been a persistent issue - hopefully solved from 2027 onwards.)

"What was the production rate "supposed to be" after completing the connection of SH-17 and the forgotten SH-18?"

From management:

"Gross average production in 2023 is expected to be 46,000 to 52,000 bopd, representing an 11% increase from 2022 at the mid-point:

Reflects anticipated contributions from SH-17 and SH-18, the benefits of well workovers, continued prudent management of well production rates to avoid trace amounts of water production, and natural field declines

If we continue to drill beyond SH-18, we would expect to review production guidance"

There was no further drilling and production capacity has steadily declined accordingly as per guidance. Of course actual production in '23 plummeted to a mere 21,891 bopd for the year but steadily recovered in '24 as local sales ramped up (40,689 bopd actual). '24 would have been higher were it not for the PF1 workover which was necessary to aid future production. The PF2 workover got pushed from '25 and will now drag on '26.

Management have been clear and informative in their communication. No need for conspiracy theories.

Would love to hear more about the valuation analysis supporting that view bladerunneruk

Yup. Soaking up a good supply of profit takers no doubt.

"However we do know that recent production for local sales only has been significantly lower than export volumes pre Mar 23."

Yes, Jim, and we do know why - natural production capability decline in the absence of new drilling. Management are definitely not throttling production because of local sales. They're producing everything they can.

The water handling equipment will help future production - an announcement I'd been waiting/hoping for - but not until it comes online in 2027. Most importantly we need to get to a point where we have confidence to "drill baby drill." During the FY 24 results call in March management said that if they ordered a rig there and then it would be late-Q1/Q2 '26 before drilling would commence. So wind that forward at least another 6 months. Unfortunately we're not digging our way out of this natural decline until 2027. I'm hoping we get the confidence to order rigs in the very near future and that we can get back to and beyond 50k production levels in 2027.

But indeed the ducks are quacking and many will know the old adage which says "when the ducks are quacking, feed them."

But let's use May as it was the last month unaffected by the drone induced shutdown: 46k. 14% lower than March '23

"now that the IOC are producing oil back to the same level as before the shutdown"

GKP production immediately prior to shut down:

"March to date of c.53,500 bopd and production of c.55,000 bopd in the last few days" (Source: FY Results announcement 23 March, 2023)

GKP production August 25 month to date (1-26): 39.6k (Source: '25 HY Results presentation)

But don't let facts get in the way of a good story....

Down to 1.1% last week without pressuring the stock.

Will be interesting to see if they were the ones pressuring the stock today.

Anyone know the drivers?

Still, Invstrat, it's nice to see the stock trading some 12% higher than the closing price immediately prior to the shock pipeline closure. With less production (and a lower oil price) no less. Those ducks lining up are quacking...

" the companies would be repaid in installments within three months after exports restart."

This would be good if true and ultimately agreed. Or is it instalments beginning within 3 months after restart? Who knows....

*cash flow from current operations in 2H

BTW after going through the slides I have lifted my volume assumptions for 2H slightly. I now have an average production figure for the year of 41.8k towards the upper end of management's revised guidance of 40-42k. Assuming (for now) full export restart on 1 October and $65 average Brent (discount assumption unchanged) I have the company generating $18.4 million of cash flow from current operations plus a further $22.7 million of one-off receivable recovery. I still need to tweak capex a little but it won't have much effect. All subject to any new information/clarity including re receivable recovery. Still need new wells to recover lost production capacity and achieve growth.

Yes I would expect so. Direct operating costs (including Shaikan G&A) and capital expenditures are recoverable (including leasing of equipment).