Member Info for PUTUP

Oh and whoever posted that dribble is on my filter list. Yet again, a worthless post. Good luck on your views as to what will 'move the needle'!

Ha! There's been nothing worthwhile to comment on.

Price to book value likely a better metric. Target 0.7-0.8 if confidence in achieving mid teens RoE. Latter likely not going to occur before financial year 2027 with, hopefully, better visibility on that by mid 2027.

"Gas production will prioritize domestic supply, aiming to support regional energy needs and contribute to long-term economic growth and energy security."

Gas production for domestic electricity and other needs is sorely needed. Hopefully (gas-fuelled) generation capacity is built with it (and potentially provide an avenue of oil producer gas production to be sold rather than flared).

"£17 a share to get my money back"

🫣

Stock prices are discounting machines. Importantly, at what price relative to Brent would they sell their discovered oil at and how much of that do they get to keep?

(GKP gets about $3 per barrel, less corporate overhead.)

Out come the filtered posts. 🤣

Just to put things in perspective, £3 would be a fully diluted enterprise multiple of 19x 2025E cash flow from recurring operations (i.e. excluding the historical arrears recovery and the small amount of historical cost pool recovery) - with exports in 2H assumed. (And 17.1x 2026E free cash flow assuming a full 50k bopd exported production and $60 Brent for the year.)

If you think that's a low ball figure you are absolutely delusional. Being sensible isn't being bearish.

Consolidate the local sector and become more attractive to a major. Alone, £3 per share would be freakin amazing but unlikely to happen anytime soon.

I had missed Martijn Rats's report of 4 May. Summary:

Weaker Balances Ahead after

OPEC Hike

OPEC's quota revision came in higher than we had expected, and is likely a precursor for further supply increases in months ahead. This adds to the market surplus we already modelled for 2H25 and 2026. As a result, we lower our Brent forecasts by $5- 10/bbl.

Key Takeaways

After the 411 kb/d quota increase in May (i.e. '3 months in 1'), our modelling for June reflected a pause. Instead, OPEC+ adds another 411 kb/d in June again

Altogether, we raise our OPEC supply forecast by 0.4 mb/d in 2H25 and 2026, which adds equally to our estimate for the market's surplus

With ~240 mb growth in OECD inventories by mid-2026, the Brent curve will likely be fully in contango by start-3Q and flat price to decline to ~$55/bbl by 1H26

Still, in previous downturns, oil prices needed to decline to levels lower in the cost structure of US shale than that, albeit usually for brief periods

Historical parallels to the current situation are few and far between, but as previously discussed, the one that comes closest is late 1997 - discussion inside

The new Brent forecasts are:

2Q25 60

3Q25 57.5

4Q25 57.5

1Q26 55

2Q26 55

3Q26 57.5

4Q26 60

A merger with DNO's Kurd assts would be good. And take out GENL in the process (which is a waste of space company).

Pity party for Payce 😩

You seem to forget that I was the one explaining to people here that the company had reached a level of base production which, if current contract terms hold, could self-fund considerable capex. (At 50k production and $60 Brent, for example, GKP could deploy and recover circa $90 million of net capex annually.) In short, there was and remains no need to hoard equity capital or explore long term debt to fund growth. Even the company's preferred cash level of $90 million is far too much in my opinion. What I did say is that they could even explore funding the working capital associated with the time delay in recovery through a short term facility rather than using equity capital. With, for example, 3 month payment terms, that short term working capital need would only be about $23 million.

The likes of Straycat took a long time to understand this point about being able to self-finance capex deployment. Finally convinced, he began to preach but forgot that it very much depends on current contract sanctity - something which is still TBD. The good news is that there will be little to no growth capex deployed until contract sanctity is confirmed. So don't expect the company to invest heavily in building the CRP again.

(BTW he also poo-poohed an investment in Vanquis which has subsequently doubled from the lows of when I suggested its potential. 🤷)

KBW Research:

Vanquis Banking Group PLC (VANQ.LN) | 70p | Outperform | Target 85p

Q125 - Broadly on track

Summary

Vanquis provided a Q1 trading statement this morning. Overall looks in line with expectations, including a return to profitability, volume growth, stable margins and capital. Importantly complaint volumes are down markedly post the revised FOS fee structure implemented at 1 April 2025, which is encouraging for cost outlook.

Overall - We are positive on VANQ. (i) the Financial Ombudsman Service (FOS) revised fee structure has resulted in 'a meaningful reduction' in complaints referred to the FOS; (ii) as we noted at FY24 (see link), the Group's motor finance redress liability even at worst case looks very manageable; (iii) management remains confident of guidance to returning to profit in FY25. Although we are still some way from mid-teens return (FY27+), but trading on consensus PE26 5.0x and PTBV25e 0.5x is far from demanding. Outperform, TP85p

Key Points

Interest earning balances - Q125 grew +0.2% to £2.3bn or +2% increase excluding the Personal Loan portfolio sale. On-track for FY25 guidance c.£2.6bn (KBWe £2.6bn). Includes broadly stable Credit Card balances (in-line with KBWe); steady growth in Second Charge Mortgage to "nearly £300m" (KBWe £0.2bn); and Motor Finance down -2% in-line with KBWe.

Net interest margin - Q125 17.8% is flat on Q424. This is in line with KBWe FY25 17.8% against guidance >17%.

Complaints - The Group has seen a meaningful reduction in CMC complaints referred to the FOS since the revised FOS fee structure implemented on 1 April. Q1 complaints costs are in line with management expectations.

CET1 ratio - 18.8% flat on FY24. Target >17.5% for FY25. The sale of Personal Loan portfolio contributed c.+25bps.

Motor finance - Awaiting Supreme Court judgement (July 2025?). However management reiterate that they are confident of their position (no provision). Total relevant commission amounted to only £23m.

"Coincidentally putup is the only poster to my memory since restructure who has advocated that gkp go back to the bond selling business. That was before the pipeline closed. I wonder why."

Huh? Show me that post. Your memory is failing - but blame that on someone else also.

"What’s the possibility of another 10 million buyback announcement if we’re flush? "

Not a chance at these price levels

Ah yes million. Thanks of the correction.

2008 was the culmination of public greed. Don't blame the bankers. They just made an easy scapegoat rather than the public having to accept personal responsibility. (Just like "the government is making me sick" crap.)

I prefer to rely on professional analysts who cover the sector. Inventories matter a lot. The average US consumer is certainly under pressure. Impact of tariffs still to come. The twin roles of the Fed are whipsawing one another and MS don't expect any cuts this year in contrast to some other analysts. We are definitely very late cycle in the stock market and the risk of recession in the US is a coin toss - at best. Hopefully Brent doesn't spend too much time in the 50s with a 68-58 range holding. That's well down on the 75 level prior to the first OPEC+ production increase announcement. Expect the full 2.2 billion voluntary cut to be unwound. For now, MS expect 2026 to average $65 (base case), albeit with wide bull/bear range, which is supportive of the current GKP price.

Meanwhile this stock may well continue being a 'yawn' until late August at which point people will no doubt get giddy about the interim dividend. Brent is back up towards the upper end of its range - thankfully - and supports the current GKP price (assuming contract sanctity, near-term export reopening and arrears recovery over the next couple of years).

The old saying 'sell in May and go away, come back on St. Leger’s Day' may well be applicable...

PS: Episode 1,372 of Morgan Stanley's 'Thoughts on the Market' podcast, from about two weeks ago, has Martijn Rats outlining his team's current thoughts on the oil market and forecasts for Brent. Worth the 5 minute listen for those unable to get access to their full research.

Figure out the company's book equity and the maths is simple

* More people HERE should use it