Member Info for PUTUP

Unfortunately, there's been no change in fundamentals since mid May... and, frankly, hope that negotiations would begin on a sensible footing have been dashed. "Patience still required." Lots and lots of patience...

Bounced off support beautifully today. But has to break it to fill the gap which is a bit unnerving.

Unwin and Spacetomato, part of the "pump it til you dump it crew".

Beware their dialogue should they return.

From a chartist point of view the stock still has to close the gap down at 122p

I don't expect PH to have bought more than 125k. I'd rather they bought stock lower given zero progress on fundamentals. Pre Friday's activity, the average for the buyback was 137p with a close on Friday of 130.7p. Queue naive bleeting about destruction of value...🤣

Looks like they at least bought enough yesterday to go below 0.5% short

Looks like they might have done more than 125k today. If they stepped back they'd likely buy them cheaper.

"This is slightly over the maximum amount announced of $10m."

🫣

Spacetomato misunderstands who is doing the investing...

Belgrano getting a dose of realism...

The canon fodder squeal...

Someone toss this guy another straw...

Yes it is the population's oil. The IOC doesn't own the resource. (Something many here continue to struggle with.)

Costs are what they are. They're agreed with the resource owners via the FDP. That's why the FDP exists as an agreement between the resource owner and its agent, the Contractor. The vast majority of these direct costs arise from capex to develop the field. Direct costs are incurred and funded by the IOCs on behalf of the resource owner. One can't just stipulate the cost devoid of an understanding of field development complexities and actual costs on the ground.

The question is their rate of recovery. One could equally argue "why should the IOCs fund field development and extraction on behalf of the resource owner versus simply receiving a fixed amount per barrel to do the work?" Of course, the answer is the resource owner doesn't have the capacity to fund the development and transfers that burden to the IOC in return for paying for those costs over time/with production and paying a slightly greater remuneration amount per barrel produced.

The rather stupid thing (at least so far) is that the discussion has centered around costs rather than the amount paid as remuneration to the IOC for taking on their various responsibilities - the Profit Oil component (to use the term in the current PSC). THIS is how the IOC makes its money. Funding direct costs while awaiting their recovery is a burden/cost.

In essence, what the conversation demonstrates thus far is that MoO has absolutely no idea of what it takes to develop the/their resource. $6 per barrel, for example, would allow - with 48k production - a direct cost envelope of just $105 million. Given a normal opex figure of around, say, $3.20 per barrel (midpoint of previous guidance) that would allow an annual capex of just $49 million per annum. That's not even enough to maintain constant production levels.

We haven't even gotten to the discussion of how quickly the IOC should be reimbursed, let alone any discussion of the amount they should receive as remuneration. Lots of wood to chop before progress is made...

Right now, at peak field capacity and a local sales price of $27 per barrel, MOL/GKP (the Contractor) are receiving a bit less than $13 a barrel (gross). But this is flattered by about $7m gross of excess cost recovery (direct cost recovery per month greater than direct costs incurred per month). Without this excess cost recovery, the Contractor would be yielding closer to $8 per barrel. Ignore the run down of excess cost recovery at your peril. (Yes, 8 is better than 6.)

"Get local sales to 55kbopd"

From the latest update: "considering the Company’s limited capital programme, gross production potential is currently between 45,000 – 48,000 bopd"

It's clear that repayment over a decade is a non-starter for the IOCs.

GKP's $151m receivable with the KRG/Iraq is 52p per fully diluted share. That provides a quarter of my year-end '24 fair value number for the company. It's this significant because it includes $121m of cost recovery. GKP spent that money many months ago and its recovery is invoiced in the receivables. Furthermore, this cost recovery represents the lion's share of the outstanding cost recovery pool (CRP). (I estimate GKP's share of the remaining CRP ex the receivables is down to $35m as of the end of June.)

My £2 fair value number assumes the receivables are paid in full by YE - clearly optimistic and one reason for the stock trading at a discount to that number. Even if I were to assume the receivables were to be paid in equal installments over five years - rather than ten - it would knock 22p per share off that number.

I agree with Anfil (as I outlined several weeks ago) that one possible solution would be to allow the IOCs to continue invoicing cost recovery as if the amount in the receivables balance had not already been invoiced (with commensurate reductions in the receivables owed). While this would still be dependent on the still-to-be-agreed cost recovery envelope, it would seem a much fairer result. (On present contract terms, production levels and oil price we'd recover the receivables in a year or so.) I'd even support writing off the invoiced Profit Oil less CBC component were this to be agreed.

Opening positions are rarely part of final agreements, but it shows just how much negotiation needs to take place - with respect to cost recovery, receivables, profit oil returns and the field development plan.

“75% of that is COST OIL (cost recovery). Just keep it in the CRP and let it recover then, the rest 25% ($30m) ”

Your numbers are slightly off but I agree . That was the solution I outlined several weeks ago. We know there’s still the issue of resolving the cost recovery gap in the contract but recovery that way is likely faster.

"so lets current market cap valve right now,,,324M

Minus debt owed by promise to pay.............110M

Minus GKP cash in hand .................................100M

Current value right now = 114M........ "

You are mixing currencies Belgrano. Just FYI.

Even worse than I had heard yesterday. I heard there was a big disparity regarding cost recovery in the MoO proposal. The news about delayed repayment of monies owed adds to the wide gap. I certainly don't expect closure of that gap quickly. My expectation of a resumption of exports on September 1 is at risk... Let the canon fodder squeal.

Johnny, you omitted the "1" in the timestamp and would do well to Google "London Stock Exchange code UT"...

Looking Beyond Seasonality

After recent declines, oil prices have room to recover in the short term. Nevertheless, inventories are currently higher than we expected some time ago, and on current trends, supply/ demand balances will likely weaken after 3Q. With that prospect, we lower our price forecasts modestly.

Key Takeaways

With a seasonal uplift in demand, a brief hiatus in non-OPEC growth and OPEC production cuts extended throughout 3Q, we see balances tighten in the near term

Altogether, our total liquids balance points to a 1.2 mb/d deficit in 3Q (crude-only: 2.1), which is likely to support a recovery in Brent to ~$86/bbl during 3Q

However, this changes thereafter. From 4Q onwards, demand weakens again seasonally, non-OPEC supply remains robust and OPEC likely adds supply

Our base case shows a ~1 mb/d surplus in 2025, which is likely to drive Brent into the $75-80/bbl range from 2Q25, although OPEC has flexibility to respond

With a softer-than-expected outlook for oil prices, we also lower our rating for the European Energy equity sector back to 'In-Line'

Period Old Forecast New Forecast

3Q24 90.0 86.0

4Q24 87.5 85.0

1Q25 82.5 81.0

2Q25 80.0 79.0

3Q25 80.0 77.0

4Q25 80.0 76.0

'the agreed price'

Costs = capex plus opex plus direct Shaikan G&A. Only one of those numbers is variable with current production. Luckily the third is modest in size. No way a fixed 'price' for cost recovery makes sense in a variable capex and variable sale price environment.

I can see the headlines already: "We brought the parties together in order to resume exports but the IOCs refuse to agree to our proposed contract terms." A public relations campaign to point fingers has already begun...

Y'all getting giddy. It's good that talks have begun. I will get excited when we get positive statements from the IOCs. So far... meh. There's an enormous amount of ground to cover.

Itsaponzi, what makes you think the ICG will ever NOT have a say in the oil industry in the Kurdistan region of Iraq? Are you expecting statehood for the Kurds?