Member Info for PUTUP

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"There is almost no argument over the rate of "Profit" / Revenue earned per barrel produced"

Not yet anyway!

"their argument on only insisting on service agreements just gone right up in flames... "

They haven't been insisting on service agreements. They've been arguing about the cost of lifting oil and the cost of field development - the rate they are recovered. I'm sure they are examining other pools of funds from which costs might be reimbursed, for example splitting variable operating/lifting costs and capex (infrastructure) and thinking about whether thee latter can be funded from other sources...

Production vs profit sharing makes little difference. The proportion in which things are shared does... I wonder if any details have/will be leaked.

I'm wary. The last time the 14 day RSI was this high was the 20th of May. And we are here with no fundamental news support.

Production volumes in the second half will be deeply affected by the work-over at PF 1 (plus declining field capacity due to lack of investment). The interim dividend has been paid and I don't expect to see another one until a 'final' dividend next year. I also don't expect much in the way of progress on talks regarding contracts and export resumption (not yet anyway). However, I do expect the company to announce another buyback - $10 million, maybe $15 million. I'd expect this to help the stock into the 140s, maybe 150s in the short term (next couple of months). When it's done, I'd expect another. Still, we need progress on fundamentals (contract terms sanctity, export resumption, receivable recovery) to sustain gains beyond that.

Watch the 14 day RSI. Rarely wrong.

I prefer to focus on when/if we get it recovered rather than looking in the rearview mirror. If we get out of this mess we will be looking to SOMO for payment for future production and not the KRG.

Who knows. And, frankly, who cares.

Anyone here can work out the present value of the receivables according to some basic assumptions. For example, by assuming they are recovered starting January 2025 in equal monthly installments over 3 years and assuming a discount rate suitable for the equity risk they represent (for now I require 20% per annum - your requirement may be different). Change the assumptions to suit your own expectations. The calculation is easy and can be done in Excel or HP12C (either standalone or as an app on a smart phone) or whatever.

Yes, that related to very old outstanding invoices (Nov 19 to Feb 20) when we were still exporting down the pipeline, the KRG was collecting the oil revenue and had the ability to pay more out of its share. Obviously, the situation is rather different now but when exports restart they should, hopefully, again be in a position to dribble back the receivables. But, once again, I understand that re-billing the cost recovery in the o/s invoices at the exhaustion of the CRP as if it hadn't been invoiced already is a proposal that has been rejected. If everything is settled with SOMO then the KRG can work on a repayment plan from whatever they get from SOMO (who will be collecting the oil revenues).

Maybe if we are only doing local sales we can cut a deal with the KRG as they continue to sell oil locally - away from SOMO - and they can dribble a little in. We will have to wait and see - there isn't long to wait now. But a further delay to exports marks valuation down. An export restart is what both GKP/MOL and the KRG desperately need. Under an export restart scenario it is SOMO who is our master and they won't allow re-billing (to them) of amounts owed by the KRG.

I think the receivables will be recovered over several years. But I understand recovery via re-billing of already billed costs has been rejected as an option. But maybe it is revisited at the end of the year when the CRP has been exhausted. Who knows. Place your bets.

Don't confuse realism with pessimism. I wish that would be the case but, currently, I understand that it has been rejected.

Let's see if it changes.

If it does then we can expect much more of the 52p per share receivables discounted into the share price.

The sum of the parts of my fair value calc is basically:

Cash as of June (adj for buybacks since then) 32p per FD share

Less divi paid -5p

Rest of 2024 (ie 2H) net cash generation (assuming local sales only, $28/b) 16p

Value of 48k prod in perp (at $70 Brent, full export, $32.20 discount to Brent, current contract terms, 20% discount rate) 87p

Sub total ex receivables 130p

Receivables in full 52p

Total 182p

Those are all YE figures which need to be discounted to present day. Settling all the contract/export uncertainty and a lowering of risk would - obviously - allow for lowering the 20% discount rate. (If one lowered it by a full 5% (1/4 reduction) that would be worth 29p per FD share.) And obviously a return to growth would add some value over time as well...(although we will need growth just to get back to 48k bopd given current field depletion as a result of zero investment).

It would be great to get an update on a lot of things...if there is an update to be had. (I suspect there isn't much to be provided.)

36% of sales is a summary or output of a more complicated calculation. If the CRP is exhausted down to current month costs they won't be getting 36% of sales (assuming we retain all key current contract terms). My understanding is that 're-invoicing' the c$122 million of costs already invoiced in the receivables is (at least currently) a very unlikely option. It also seems that the KRG simply doesn't have funds to pay the receivables without a return to exports allowing them to make sizable amounts from production. It's not surprising that the share price has massively discounted the value of the receivables. Unsurprisingly everything hinges on a return to exports, the sanctity of key contract terms (combined leading to a recovery of receivables) and, later, a return to growth.

My model estimates GKP's share ex receivables at $33 million as of end of June. To emphasise, this is a NET figure adjusted for the receivables and assuming payments up to and including June production. I await eagerly the half year results for an update which will obviously be Gross and unadjusted for the receivables (and *may* not include receipts for June).

I estimate that on a gross basis the CRP is being whittled down about $7-8 million a month (except for when production is halted for PF 1 work).

Life isn't fair. Doesn't make Russia right.

Now back to GKP...

Don't be a jerk. Grow up.

I suspect the results themselves won't have anything of interest. But they will almost certainly announce another buyback and judging from the last one that will likely get people giddy again.

The closing auction can clear a lot of individual trades and interbroker crosses

Not sure what maths you are tying to do. I had said an extra $2 per barrel for the REST of THIS year doesn't even shift my valuation by 1p. (The exchange rate has had a greater impact.) After this year I am assuming, for now, a return to exports. (If I did not, my valuation would be lower.)

Production in the first half of this year averaged circa 38,774 bpd (using the provisional number provided for June). My assumptions for the second half of the year work out to an average of 43,087 bpd. That's an average for this year of 41,055 bpd. (My assumptions for the second half of the year are likely optimistic however.) For now I have assumed $28 per barrel local sales price in the second half of the year. Changing that to $30 per barrel from Aug to Dec doesn't move the needle on a per share basis at all.

Everything hinges on a return to exports, sanctity of current contract terms, recovery of the receivables and, later, a return to growth. The current share price prices in the first two of these.

The gap opened between the 10th and 13th of May. So almost three months to close.