Member Info for PUTUP

Why on earth would you expect a dividend announcement tomorrow? Maybe you missed the 8th of October '24 RNS regarding distribution policy...

Or perhaps it just didn't go down enough when international oil prices fell? 🤷. We will soon find out whether local sales prices are elastic or inelastic, potentially providing a floor to receipts and valuation. Or not.

It will be interesting to see where current cash is. My own forecast for the END of June - and so we are still a bit short of then - is $114 million. That would represent a change of $37.5 million on the end of '24 (adjusted of the dividend) of which about $10 million is from the last of the CRP ex that in receivables and a further just under $10 million is from areas recovery. Those cash inflows are one-offs. Cash flow from continuing operations will, I expect, be about $18 million for the first half of the year.

"God bless the POTUS, The Greatest man since Jesus Christ!"

In a universe of billions of galaxies, on average not dissimilar to our own galaxy, The Milky Way, with its billions of suns, it is extraordinarily naive to think that a god, if there is one, favours one nation on tiny planet Earth more so than another - let alone an individual as despicable as DTJ.

The US has little interest in an offensive fight. Likely more focused on defensive measures, protecting US assets and personnel and defensive assistance to Israel (even as it becomes more tyrannical). The rhetoric, however, is unbound and will be designed to place maximum pressure on Iran.

At any rate, all of this matters little to GKP unless (1) our assets are somehow attacked and (2) our sales are sensitive to international oil prices. When Brent was previously at these levels we achieved $28 a barrel for our steadily declining production. On Friday, we will find out if that price slumped alongside the fall in international prices into the 60s. If they didn't slump I doubt they'd be particularly sensitive to the recent rally either. And with global supply set to exceed global demand even without Iranian production it's hard to see international oil prices remaining too strong for too long.

So where does that leave us? GKP remains fully priced if you think they can sell production (whether by export, local sales or otherwise) above $30 a barrel (net of discounts) going forward over the mid to long term. If pricing proves to be elastic on the downside then you'd better hope that current tensions and stronger prices (as evidenced by international benchmarks) stick around for a very long time. If local sales prices have held firm then I think the stock a Hold.

Anything?

Navigating Geopolitics:

Three Scenarios

Increased military activity between Israel and Iran has opened up a wide range of future oil price trajectories. Amongst these, we can foresee three 'anchor' scenarios, which we discuss in this report. Uncertainty is likely to last for some time, during which risk premia of ~$10/bbl are justified, in our view.

Key Takeaways

Scenario #1: Military conflicts to not necessarily disrupt the flow of oil. If exports from the region remain unaffected, Brent prices can decline back to $60/b

Scenario #2: A sharp reduction in Iran's exports is a possibility, which could remove next year's global surplus. In a balanced market, oil trades around $75-80

Scenario #3: Eventually, this conflict could put oil export from the wider Gulf region at risk. In that case, 2022-style prices would not be out of the question

The majority of probability is concentrated in scenario #1, which is our base case. With a lack of true historical precedent, scenario #3 remains an outlier

Even small probabilities applied to sizeable upsides can skew prices higher. Whilst uncertainties last, risk premia around $10/bbl are justified.

Revised Brent forecasts (vs previous)

3Q 25 $67.50 vs $57.50

4Q 25 $65.00 vs $57.50

1Q 26 $60.00 vs $55.00

2Q 26 $60.00 vs $55.00

3Q 26 $60.00 vs $57.50

4Q 26 $60.00 vs $60.00

Still a big yawn so far unless you live in Iran

So far (as of the time of writing) the reaction in oil markets has been somewhat muted. Brent up 1% having bounced off the same resistance line again ($78.48) before trading back to $75.

It will certainly be interesting to see how the oil market opens in Asia. Last week the Brent (next delivery BZ=F) futures contract traded right up to resistance that has prevailed since July '22 ($78.50 ish) before rallying to close the day/week at $74.56. Iranian production is largely irrelevant to international prices but the continuity of traffic through the Strait of Hormuz is. High frequency data over the last few weeks, while uncertain, has indicated that there has been little increase in Group of 8 production, particularly Saudi, post the quota increase announcement and is undoubtedly behind the rally we saw before military operations began. (Morgan Stanley on June 9: "Here, we believe our proxy tells an interesting story recently: notwithstanding the ~1 mb/d increase in production quota between March and June, an actual increase in production is hard to detect in the observable data.") It will be interesting to see how the Group of 8 and particularly Saudi Arabia respond to the currently elevated prices - and whether the Strait remains open.

How long until St Leger's day?

Chelmochaser, what are the basis/methodology, assumptions and timeframe for your 258p target?

And now Iran launches its retaliation...

It got the kiss of death on 9 June. Down 13% since. 🫣 🤪

"Will that include another dividend ? I’d say 50 / 50."

Zero chance given the recently stated policy of declaring dividends with the half year and full year results.

50k isn't large. AT trades are simple trades through the SETS automatic trading system. Someone working really big size is more likely to work the volume OFF-BOOK. Not every retail investor works with pocket money.

Waiting for next week to find out how elastic local sales pricing really is.

Boom as in airstrikes against Iran?

For those that want to read the report

https://govkrd.b-cdn.net/Government%20Open%20Data/Deloitte%20Reports/Deloitte%20Reports%202023/Final%20RCOG%20Q1%202023%20Public%20Report.pdf

Very much doubt it's a naked short. Will be long-short. But when unwound it could place short term upward pressure on the stock unless timed with an equally motivated seller (and the higher we go the more likely that is).

Will be day of AGM I expect