Member Info for PUTUP

****eye it would be good to hear yours… have you done the work?

Interestingly the article talks about how the Iraqi central government will pay the KRG for its oil. It implies, therefore, that the KRG will pay the IOCs rather than the IOCs entering into direct contracts with SOMO and be paid by SOMO. A ton more detail needs to come out...

For now I keep my assumption of export restart on January 1 and current contract terms.

150p YE 48k production fair value has barely budged except for adjustment for dividends, the announced loss of production due to the stoppage in November and the jiggling of the Sterling exchange rate.

"It's not "to recover production and transportation cost", $16/bbl is all the IOCs will get for every barrel produced."

The debate has always been around the cost of production and its recovery. Not (yet) on the profit oil the IOCs earn.

"the production and transportation costs of oil produced in the region"

Positive progress. Lots of detail required. Opex costs of production have always been way below $16 (last guidance prior to shutdown was about $4.20 per barrel). I can't recall transport costs. How will capex be treated? It isn't a cost of current production but rather an investment in future production (at a minimum to keep production constant and, hopefully, more to achieve the growth we all crave). Current cost recovery (opex, direct Shaikan G&A, and the recovery of the CRP) excluding transportation is also below $16 - circa $10 a barrel. Everything hinges on the treatment of capex (speed of recovery) and the agreed FDP (speed of incurrence).

Much less good if the $16 includes the cost of transportation. That's on top of the costs I mentioned below (and was deducted from the sales price - way earlier in the computation formula).

In the 6 months prior to ITP shutdown costs recovery fluctuated between $16.50 and $21 a barrel. It gets MUCH more digestible once the CRP has normalised at the end of this year. Going forward it's all about the recovery rate versus the cost of investment as directed by the FDP. (A "maintenance scenario, where investment is only that required to keep production constant, the costs incurred are only circa $7 a barrel.) You should work out how much annual investment could be made - and recovered - if cost recovery is capped at $16 a barrel (probably assuming other current contract terms are kept) assuming a starting level of production. You'll need to make an assumption about the opex per barrel and direct Shaikan costs as well. You can then compare that with the prior guidance regarding the costs of the next stage of field development. It will give you a much greater feel for the answer to your question. Of course only the IOCs can truly answer the question by agreeing terms with Iraq and publishing an RNS with details.

It would be totally daft if commissions were not disclosed in the loan agreement (at the very least). If they aren't then indeed the lender has a pile of cr*p coming their way. Management need to fully explain themselves on Thursday.

"Seems slightly strange to me announcing a buyback on the 8th Oct of up to $10m with the price around 134p and having an intended price cap on purchases slightly below this figure (accounting for dividend)."

Immediately prior to the announcement the stock closed at 127.10. Take another 7p off for the dividend.

Well, I called a 42p to 62p trading range. Today it closed a fraction lower at 41.8p. I added at 42.82. The 14-day RSI is down at 17.5, not the lowest it's been - it hit 14.86 in May - but definitely in oversold territory. Now we'll have to see if there's a bounce...

I'd say it's not unreasonable to expect a little panic or at least heart palpitations following a 32% drop in a month. (Even if it is what I've been waiting for.)

Indeed. And you can expect that management were subject to some criticism of the execution of the last buyback. Mechanistic execution led to a (disappointing) 140p average and an average high of 149.90p on one day. (As a result, I sold a little of my holding into the buyback and took my share of the cash distribution.) 140p is 133p when adjusted for the latest dividend. I'm not at all surprised purchases have so far been limited to 125p this time and would hope it is executed at lower levels on dips. We will have to see if we get them.

"Much closer to dips now..."

Now it's a buy

When it's cheap in the eyes of those pushing for it they will buy/follow through.

Oh I'm on point. You simply fail to grasp the point.

Obviously, the current share price - in light of current uncertainties - isn't particularly cheap in the view of those shaping management behaviour. I agree with them.

No Straycat that's incorrect. I said that for the company as a whole the price doesn't matter. For each individual it does - each has to decide whether to sell into the buyback or not. Sell pro rata and you simply get the distribution. Don't sell and you buy more at the buyback price. Try to keep up.

"Not a clue"

...

"Put your money where your mouth is..."

"I have done broadford. The question is, have you?

Answer…no"

Oh I think he has

Straycat, the answer is simple. They've been directed to be more price sensitive with the buyback. Why? Because those who don't sell into the buyback are buying more of the company at the buyback price. And they don't want to buy more at too high price levels.

Let the idiots on ADVN speculate all they want.

You deserve all you get 🤷

Brent up 1.4% in early Asian trading

Clever fellow. Yes, the voluntary cuts were to have ended now but have been extended for another two months at least.