Member Info for PUTUP

And hence the discount. Cheap for good reason. We shall have to wait to see how it all plays out.

(In the interim, return the excess capital. If they need more later we can decide whether to support it or not.)

We don't quite agree BB - particularly with respect to your last sentence.

The buyback is predicated on a belief that the company will, one day, return to exports, maintain (in all material terms) its current contract and recover the receivables. In that context, the stock is cheap. It's not at all predicated on the notion that it is cheap were the only possibility to be a continuation of local sales and no recovery of the receivables. (Quite the opposite.)

People forget that current free cash flow generation, even in the depressed state of local sales, is still flattered by historical cost recovery. That is one-off cash flow. Were it not for this, free cash flow would be a mere $2m a month currently. And that is with the field operating at the upper limit of estimated current capacity (48k bpd). Without investment capacity will decline.

Such a stupid view. We are keeping our heads above water. That's it. The share price expects a lot better scenario. Plus, local sales are at the grace of SOMO. Going hostile would be profoundly stupid.

Peel Hunt continuing to do a great job. Tick tick tick without too much pressure. One third done.

It would be a brave person who believed that all (or any) differences would get resolved in the first meeting. I'd expect an outlining of positions and an agreement to meet again (in a month's time?). I hope I am pleasantly surprised to the contrary...

"P. That’s not going to happen. "

Then it's worth less

"entitlements of oil companies"

Sounds like their full contractual obligation ie cost oil plus profit oil.

Your calc (I get an amount pr barrel just over $20) can be compared with the values below.

For the period for which GKP/MOL have not been paid, Contractor revenues per barrel ranged from $22 per barrel to $28 per barrel depending on the month.

For the current year so far the figure has been $12-13 per barrel.

Were the pipeline to reopen and current contract terms stick, there'd be a very brief period - one and a bit months - where the amount would jump up closer to $26/7 a barrel but then soon after, given the normalisation of the CRP, that would fall sharply back down to something closer to $13 a barrel again. Beyond that, it will depend on the level of investment in the field. Any upper budgetary limit per barrel would/should set the upper limit for investment and scope of the FDP that can be agreed.

I'm well aware of what was stated in the release. But it is NOT "their purpose to push the price up to a point where the company feels they should be." That is something quite different. It is merely their intention to return up to $10 million to shareholders via a buyback for as long as they perceive the stock to be cheap.

Key shareholders, (alongside management) believe the stock is cheap. They also believe the company is carrying excess capital. They'd like to own more of the company at these levels - or, even better, at lower levels - but not at any level. Hence persuading management to return capital to those wishing to sell, while in turn increasing their ownership of the company at the same price by not participating in the buyback. It is that simple.

That doesn't guarantee that they (shareholders chatting in the ears of management or even management themselves) will be right. Not at all. But it's a view they're prepared to execute on today. You, and everyone else here, will have to form your own opinion as to whether you agree with them - and live by that decision rather than blame them should it go wrong at some future point.

So the goal will be to buy as much stock as possible for as little as possible at levels well below their perceptions of fair value. It is NOT to push the price up to that perceived fair value.

And, again, you place far too much faith in a distribution of capital OUT of the company to create value WITHIN the company. Only improvement in fundamentals, factors driving cash flow generation, can achieve the latter. Without an improvement in fundamentals the impact of the buyback will be transitory and of little consequence. That is to say, those shareholders and management (and me) will have gotten it wrong and those that sold into it gotten it right. Time will tell.

Now, I believe the company is cheap IF it can return to exports with current contract terms in the near future. I support the current buyback at current levels. However, I've been pushing for a buyback since the stock was well below a pound and would have MUCH preferred earlier action by management. So, unsurprisingly, I also support management NOT going hell for leather and buying at any price. To the extent little progress is made on fundamentals I'd like to see them back off quite a bit (as they seem to have been doing recently). Should their confidence grow (and subject to not risking safe harbour for developments which have not been made public) I'd support more aggressive buying but still at a discount to my own perceptions of fair value. Should they push beyond those personal views, then I have an opportunity to trade into it. Your views may differ and you should act on them accordingly. But, I repeat, don't blame anyone other than yourself for your action/inaction.

"Their purpose is to push the price up to a point where the company feels they should be."

This is your mistake

Dumbly, you need to understand what the safe harbour provisions are and then read again the company's own announcement of the buyback programme (an extract from which is copied below):

"A buyback of Shares on any trading day may represent a significant portion of the daily trading volumes in the Shares and may exceed 25% of the average daily trading volume specified in the safe harbour provisions of the Regulations dealing with buyback programmes and accordingly the Company may not benefit from the exemption in Article 5(1) of that regulation."

You then need to do the work of calculating compliance (or not) with those safe harbour provisions.

Longer term, looking into 2025, the impact is harder to assess. Next year, we assume global oil demand to grow at ~1.3 mb/d, in-line or slightly slower than in 2024. However, at this stage, it appears that there is sufficient supply growth outside OPEC+ countries to meet this demand. Hence, our estimate for the call-on-OPEC does not grow in 2025. With that in mind, we had modelled OPEC production to be broadly static in 2025 as well.

Taken at face value, the decision to gradually unwind the November 2023 voluntary cuts would add ~1.3 mb/d to OPEC-9 production in 2025 (based on average production during the year, compared to the average of 2024). That is more than we have previously modelled, and therefore suggests a loosening of our balances for next year. If non-OPEC production grows by ~1.7 mb/d, as per our current estimate, and OPEC production were indeed to grow by 1.3 mb/d, than the oil market does not look tight in 2025.

However, there are two factors to consider here:

• First, with more OPEC+ oil on the horizon, producers in non-OPEC countries may take a more cautious view with regards to their production plans, particularly when it comes to short-cycle oil project.

• Second, OPEC+ ministers pointed out that the unwind of the additional voluntary cuts can also be halted or even reversed, in case market conditions were to deteriorate. In fact, the speed with which Sunday's meeting was concluded suggests agreement and cohesion within the group. As has been the case in the last few years, we expect that OPEC will remain cautious and proactive in its production decisions.

In the end, we leave our price forecasts unchanged. As shown in Exhibit 1 , we already saw Brent reaching ~$90/bbl in 3Q, driven by seasonal tightness and inventory draws. However, after that, we expected a gradual decline back to $80/bbl. With the extension of all OPEC cuts for 3Q24 but a gradual unwind of some of the cuts in 2025, we believe these forecasts are still applicable.

From Morgan Stanley last night:

OPEC Extends Production Agreement; Supportive for Near-Term Tightness

OPEC's production decisions tighten our balances for 2H24, leaving the prospects for a tight summer intact. However, the partial unwind of cuts during next year is slightly faster than we had modelled. Still, we expect OPEC to remain proactive, and in the end, we leave price forecasts unchanged.

The situation so far. In recent months, the OPEC+ production agreement that has been in-place consisted of three layers: 1) a set of formal required production levels, 2) additional voluntary cuts from a sub-set of countries agreed in April 2023, which add up to 1.65 mb/d, and 3) further additional voluntary cuts by the same sub-set of countries agreed in November 2023, adding up to 2.2 mb/d. Although the formal required production levels were already extended end-2024, some of the voluntary cuts were about to expire.

What has been decided? After a short meeting on Sunday, OPEC+ announced the following decisions regarding it future production levels:

• The formal required production levels have been extended to end-2025, with the exceptions of the UAE, for whom there will be a gradual 0.3 mb/d increase, starting in Jan 2025, to be completed by Sept 2025.

• The additional voluntary cuts agreed on April 2023 have also been extended, all the way to end-2025

• The additional voluntary cuts agreed in November 2023 have been extended to end-3Q24, but will thereafter gradually be unwound over the period to September 2025.

What does it mean? In the near-term, the impact on the oil market is broadly in-line with our and consensus expectations, and likely neutral-to-possibly-bullish for prices. The oil market has recently seen modest inventory builds, indicating a small surplus. However, oil demand typically increases ~3.2 mb/d between May and August. Without an increase in production from OPEC, that seasonal upswing will likely drive the oil market into a renewed deficit over the summer.

Previously, we had modelled a small 0.2-0.3 mb/d increase in OPEC production in 2H24, to account for the possibility that compliance could start to slip. However, with all cuts extended during 3Q, we have removed that increase. On our updated estimates, our total liquids balance is 1.3 mb/d undersupplied in 3Q, whilst our crude-only balance shows a 2.1 mb/d deficit. We were already modelling inventory draws for the period June-to-September, but with OPEC production decisions for 3Q, they now look marginally tighter than before. This leaves the prospect of a tight summer, with prices rising towards $90/bbl, intact.

"as inferred from your comments"

I posed really basic questions as to potential catalysts for upside and timing thereof. No real answers have yet been provided. If you want to infer from questions that "they're no catalyst or reasons to buy" (sic) then that would be odd but that's up to you. My interest is to go long, but not simply on a whim. "Cheap" is a necessary but not sufficient reason to invest. Hence my questions...

As for it going down, for one there will be increasing pressure - absent sufficient, defined catalysts for appreciation - on current institutional holders to dump a dog (particularly if it begins to no longer meet their basic risk criteria) and ownership will need to rotate to those who enjoy distressed situations or non-publicly traded holdings. So, yes, there's risk there.

Never try to catch a falling knife...

"If we look at the actual trading statistics, however, only 10k shares changed hands in the entire day at 145p. What I said was impossible."

Still no ability to read? Timestamp 11.34.13 on the LSE website. (Trade type AT i.e. Automatic Trade on SETS.) By all means continue to shout your stupidity...

Well sure but 2 and 3 aren't catalysts and 1 requires some definition/granularity. Re:

1. Timeframe? Intermediate steps/milestones?

2. Without catalysts to change it can stay cheap for a very long time

3. While I see some minor easing hereI believe it's going to occur much slower than we'd all like and won't be as extensive as we might hope for.

I've been watching this for a few weeks. What are the catalysts to share price upside here? I see reasonable fundamentals developing over the balance of 2024 and 2025 but I'm struggling to identify catalysts in the near term for meaningful upside appreciation before late 2025 and 2026. Genuinely seeking input from those that have followed this for much longer than me...

Belgrano, I don't place a lot of emphasis on charts except for short term limit placement when I'm looking to trade, but since I've now done (and disclosed here) the trades I was looking to execute I will give you my interpretation of the same OHLC chart. Take it with a grain of salt:

Bearish flag formation with strong resistance currently at 147/8 (but rising with time). Weak support only at around 122p. No intermediary levels between those. The move higher left a gap at 122.10 - 123.67 which still needs to be closed.

My 2p on the current chart. Other, more sophisticated, chartists might have a different view.

BSMonitor it looks like my sale of 15k went through at 145p today. Happy to bank some profits on the rebuy trade and now back to my core position (less the trims at 320p and 207p).

Belgrano, don't give up your day job to become a chartist...