Member Info for PUTUP

Why I would not currently pay for growth beyond getting back to 50k

If we look at 2025 going forward, contractor revenues (cost oil, profit oil, before CBC) are below $13 a barrel. It's all about how much capex can be spent and recovered going forward - it becomes entwined with field development plans. So that will, I believe, get sorted out or there will be no growth. (even if we green-lighted more drilling today we'd be lucky to get back to 50k by EOY 26 anyway.)

"SOMO doesn't pay - all payments are made by MoF."

Well yes. SOMO instructs MOF as to amount that needs to be paid. Sovereign payment rather than KRG.

Perhaps but this has got to be one of the easier issues to resolve.

2000 tanker trucks -> Barzani through a myriad of shell companies and "intermediaries"

the last dividend still came largely from historical cost recovery

1. Agreed

2. I don't think, rightly or wrongly, this is an issue. Current contract terms. $16 is way above current costs and in any event temporary and subject to actual costs.

3. Maybe, but I think there's room for agreement here. A couple of months in arrears would be fine subject to:

4. Payment -in effect - by SOMO. They get the revenue, they make the payment to the KRG to meet the contract obligations. Ideally into escrow but, again, that can't be hard to figure out.

5. Can't be hard.

6. Yes, potentially but doesn't stop the start of export even if it affects how much is exported. No one has any idea on this at the moment.

I still think 1 is the big sticking point. SOMO/ICG didn't get the sales revenue and will be arguing the KRG did and so the arrears remain their responsibility. They'll be crying that they have no money.

In any event, issues remain and some are considerable and yet a huge amount is baked into the current share price.

Technical issues = arrears (in the case of GKP, 52p per share)

No one is kicking me harder than myself. My first order I had at 190 and then lowered it to get execution (189). I could have just left it.So I left the order at 200 and got execution just above. So I was uhming and ahhing at 209.80. Decided to leave it at 210 and didn't get anything done. (It was for more volume.) Thems the breaks. Penny wise pound foolish perhaps. It would be nice to have even more dry powder for stocks now (and lower down). But I'm still not a buyer of GKP here. I think it about fairly valued for the revised oil price (and still pricing in export restart and arrears recovery, the latter clearly at some risk). Happy to hold here but not cheap so not a buyer.

All things considered the price of oil has held up remarkably well to the tariff debacle. Don't forget it was an increase in supply by OPEC+ that sent it down first.

PS: Fun fact. When the stock hit 209.80 the 14 week RSI was at its highest level since.... drum roll .... the stock was at 320p. It was ripe for a correction without any change in fundamentals.

Demand for oil. The global economy was already slowing and will likely go into recession later this year if there isn't a change of course. Remember GKP has a very high beta to the price oil is sold at. About 25p per share for every $5 change in the oil price (depending on your RRoE, 50k production). Brent is off circa $10 and GKP was pricing in (and still is) a return to exports. Demand for risk. Well, that's off across the board. A tariff war has the potential to be far worse than a shock like COVID which was saved, essentially, by vaccine development.

No sh*t Sherlock. But Trump has had this view since at least 1987 and it will be difficult to temper the will of someone prepared to smash things to impose his view. And Navarro is a complete crackpot.

Well that cat was definitely dead and it's bounce extremely short

Potential 90 day pause on tariffs?

(chaos back in the other direction)

Stock hasn't yet fully priced in the hit to global oil prices (let alone stock specific risks such as arrears recovery). Hopefully some common sense will come to the fore in international politics this week (although expecting that from a deranged nutter may well be wishful thinking). I expect, however, further falls in global equities. Any bounce likely to be a dead cat. At least for now. All eyes on how Europe responds to Trump.

"generates significant illicit revenue.... None of the revenue flows to the official KRG treasury."

Hard not to feel for the ICG. Hopefully they can find a mechanism for the KRG to pay back the arrears but it is obviously a massive challenge.

Note also that

"Market purchases were made through the Company’s Employee Benefit Trust to satisfy all awarded LTIP and DBP shares."

"And the CEO dumps 170k shares at 191p just before the divi date."

No, not really. His stock options vested which triggered a tax liability. It is standard practice for some to be sold automatically to cover the tax liability, much the same as tax is withheld from his pay cheque.

No one should be surprised about the LTIP award either. (Each year, two weeks after publication of the annual results.)

3.1 million share options awarded to management (not the board) with most subject to performance conditions.

You're assuming $28 holds

"Oil prices tumbled on Thursday as Opec+ unexpectedly announced plans to boost production just as sweeping US tariffs stoked fears of a global economic slowdown."

"Opec+ members said they would increase output by 411,000 barrels a day in May, up from a previous target of 122,000 b/d."

I hope $68.50 Brent support holds...

Yes. Today it trades EX-div (without dividend) as opposed to CUM div (with dividend).

No, not the announced one.

Yeah Rog, maybe I'd feel better today if I sold more previously. Risks were, as I stated previously, skewed to the downside. But I was happy to have staggered sell orders to trim my exposure. Levels of 190 (which I executed at 189 in the end), 200 (done at 200.93), a higher amount at 210 (not hit by a smidgeon) and even more at 220p. Like many here I suspect I was hoping for a pop on pipeline reopening. At any rate, I'm not a trader (although I like calling levels) and this has been a long-term position. Always happy to be banking 5x returns.

I'm not a buyer here but, as previously said, do think the stock is better value at these levels. I will buy if ever I think we reach distressed values. My YE fair value target remains around 190p but that is predicated on a number of key assumptions including Brent averaging $70 or over, ideally comfortably over, exports restarting with 100% of production exported by year end, full recovery of the receivables over the next two years, investment in new wells to bring production back up to 50k by YE 26. Let's see how things unfold. Certainly the risk of a global recession has increased markedly in recent days (and expectations of such were part of my desire to trim exposure).

"So why didn't you sell at 2.10 putup?"

Because my order at 210p didn't get hit (nor the one at 220p). I don't believe anyone's did. It really is that simple. (Sales were disclosed here as done.) Carry on.