Member Info for PUTUP

Nah, right now I prefer two let him find out the hard way

Seplat doesn't understand the CRP

Nor is investing excessive amounts of capital with uncertain recoverability. Eg the $121 million or so of costs sitting in the receivables balance.

(There's likely quite a few people who bought below £1 who find these levels nice profits taking ones. Us included.)

"potentially buying back a full 2% of an oil companies stock in just a month "

While it would place nice, short-term pressure on the stock, mopping up fickle retail, it would likely be ambitious to assume they feel the need to be as aggressive as we might like, especially at these levels. (Some of us have been pushing the company to do this since the stock was well below £1.) The good news is they've provided themselves with the flexibility to do so (not relying on safe harbour provisions). Let's see.

What we really need to see is progress on fundamentals of which there has been basically none.

"Perhaps we will thank the board for not making one..."

Of course that was wishful thinking...

"Jon Harris will be eligible to receive an LTIP grant of up to 200% of base salary and the incoming CFO will be eligible to receive an LTIP grant of up to 150% of base salary, which are expected to be granted after the 2024 AGM AND APPROVAL OF THE NEW LTIP SCHEME RULES." My emphasis.

I hadn't focused on this before, but it would appear that the 2014 LTIP has now expired (?) At the AGM you will all have your chance to express your gripe ("pigs at the trough" etc etc) or approval of the new LTIP once the programme rules have been made clear. I'm sure you will all have lots to say. Cast your vote but abide by / swallow what's approved.

BTW I'm sure you all noticed this pearl in the Annual Report:

Recognition and retention payments

To recognise the hard work and dedication of all employees (excluding Executive Directors) during these unprecedented times, the Committee has approved recognition payments. Additionally, given the current challenging circumstances of the Company, the Committee approved retention arrangements for a number of employees to stabilise management which the Board considered to be in the best interests of the Company. The Committee is therefore proposing to pay a one-off payment to our CEO on the same basis as other retention arrangements. The award will be limited to 100% of salary, is payable in January 2025 and will be subject to malus and clawback provisions and other conditions. This proposed amendment to the Remuneration Policy will be subject to shareholder approval at the 2024 AGM.

Anyone else find it interesting that there has yet to be an RNS regarding this year's LTIP grant? Perhaps we will thank the board for not making one...

"It's a distribution of cash - just like a dividend. Participation is up to you." Should have been:

It's a distribution of cash - just like a dividend - except participation is up to you.

At what point did I urge them to sell? None.

If you want a portion of the distribution then, of course, you need to sell into a buyback in proportional fashion. If you don't you are effectively buying more of the company at the buyback price. That's simply factual. As I said earlier, the choice is yours. It's a distribution of cash - just like a dividend. Participation is up to you.

"a big message to long holders that the company is enhancing the value of their stock"

In absolutely no way does a distribution of cash create free cash flow (value) within the company. Shareholders might decide to rerate the company's stock but management aren't creating value. Quite the opposite, cash leaves the company.

"Its almost certain that the share price will continue to rise unless we get of course some really bad unexpected news. "

Who knows? That will depend on events as they unfold including the whims of the marginal investor. Did it 'certainly' rise post prior buybacks?

One doesn't need a buyback to squeeze shorters. It's can help though - of course. But don't confuse investor trading and register dynamics with the creation of value within the company.

Oh I do. It's that you still have no understanding of who the investor in the field is.

Clearly you are angst with respect to the current distribution of value.

I'm more angst with respect to the lack of progress on creating value... And while little value is being created I'd like the excess capital back.

No, I want the company to invest only that which it can recover in the very near term. That's called capital discipline.

The 'original investment proposition' has always been make a slim margin (profit oil) with full cost recovery (and ideally sooner rather than latter).

3 x 10 = 30

30 - 10 = 20

A few months of free cash flow - even with local sales.

Tedious? Well, in your opinion. I know you have trouble with these things and so can imagine it becomes 'tedious' for you. You doubted any buyback at all. $10 million has been delivered today. Let's see who is right on the next $20 million.

14 day RSI back above 70...

"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."

This is good. Indicates a desire to act swiftly. Expect further buyback announcements to come once the little $10 million is done. I expect at least 3x the currently announced amount this year.

How now to all those who thought sales prices would be in the 30s? And current production running at max capacity. Stock is currently fully valued ex the receivables.

Returning a little amount of capital to shareholders via a buyback (well, those who elect to sell into the buyback) makes sense, but the amount is way too small. Remember fellas, the company is just distributing cash (for nothing in return). If you want some of the distribution you need to sell into it. If you don't you are effectively increasing your ownership at the same levels stock is bought back at. Choice is yours.

" In this case GKP should provide an update, certainly if there has been a meaningful price increase since their last reported 25 dollars. "

If there were meaningful news to convey, they'd have to provide an update. They haven't.

“Which he’ll be working on as we speak. At least I hope so…”

I think you’ll find that little is happening currently (still)

Yawn

"We can all lament that potential loss of $151m, "

Without the clear path to the recovery of this, the short term upside is limited IMHO. A lot is priced in - both with respect to losing the $151m (negative) and reopening of exports (positive).

"without its recovery being a structural impediment to progressing GKP's self-funding proposition."

Growth and the self funding proposition depend heavily on the contract and its cost recovery element. Yet another area of great uncertainty.

So we have $151 million of receivables and future growth up in the air...

We've still got historical costs to recover: the circa $121 million embedded in the receivables balance and, I'd estimate, a further $45-50 million beyond that. After that we just have the profit oil stream (as cost recovery = cost incurred). Free cash flow generation in the future will not look at all like the last couple of years.

"And the ICG feel no natural responsibility for the $151m debt because it was not incurred by them. It's not their contract.

If they're going to take it on, it'll be on their terms. Almost certainly ugly for us. But they probably won't.

And that's what we've got to recognise. A problem. "

Of course it's a problem and one fully recognized by all. It's already written off in the current stock price. Also, it represents a quarter (actually just over) of my forward fair value price. That's a big hit if it's gone.

The more nuanced question is the following. Let's assume the ICG say the debt isn't theirs and that the KRG have no way of paying i.e. we never get it. What will be the position taken by the ICG/SOMO with respect to the circa $122 million of it which is cost oil recovery. Will they say "you invoiced it, and it's not our problem that you weren't paid, and hence it can't be invoiced again and recovered from us." That is materially different from a situation in which that $122 million is still recoverable (from SOMO/ICG). In the latter case the hit is only the $30 million of profit oil. Who knows...

No one knows. Correctly, in my opinion, the current stock price has discounted the $151 million to zero - even though the final outcome might possibly be much better. Assuming such a discount is appropriate, and assuming a return to exports in Q4 and NO material impact to the current contract, I believe the market has priced in almost all the value of 50k production through to the end of the license. I make it only 10% cheap at current levels (on those assumptions).

(And paying today for 90k rather than 50k would only add about 60p of value.)

So a lot of value rides on recovering the receivables or at least the cost oil recovery therein.

That doesn't change the fact that the company is carrying excess cash which should be returned (alongside any near-term future cash generation from local sales or otherwise) via a buyback.

Waffle. Waffle. Beach day.