Member Info for PUTUP

Not long to go now. Expectations?

Wmsjames, it's good to see more well-reasoned discussion here.

"Let’s hope oil prices creep up and stay above $70". We can hope. But I still expect significant retracement in oil prices in the second and third quarters of this year. I've no reason to bet against analysts with much better insight than me. My volume weighted average Brent assumption for GKP in 2026 is $59.50.

Wmsjames, I think you missed the biggest thing - a marked compression in the expected discount for Shaikan oil. $20, rather than $30, is enormous.

To go down your list, no one should expect much from retail interest/placement and listing on Oslo without new institutional support. More is required and will happen subject to market conditions. If anything the price jiggering we've been witnessing may potentially fall away. Who else is contacting friends and relatives in the region to buy shares at circa 170p or below? I would take half the issue.

Agree current firm oil prices help. Long term assumptions re oil prices matter more though and geopolitical tensions typically burn brightly but swiftly in the oil market.

Everyone should expect a $25 million dividend to be announced in March (and another $25 million with the half year results if payments continue) as the company continues to pay out its free cash flow generation and recovered arrears. Nothing 'intangible' there. Were the arrears to be recovered in a lump sum (not my expectation) I'd expect further capital distributions. The company still has too much capital tied up in non-performing assets.

Personally I'd look into April/May/June for the consultative review elements. I'm confident these will be fine but on a slightly longer timescale. Happy if sooner but no big deal here. More uncertain is the process around the arrears. It would be great to have some announcements re this. For now, I expect half the o/s balance of arrears to be recovered this year and half next year (finger in the air).

Regarding production, GKP remain with hatches battened down. What I want to hear is that a rig has been ordered... For now I already price in 20%+ more production in perp than 2026.

So, yes, things are moving along rather than stuck in no man's land and that is why we are in the mid 180s and not in the 150s or lower. Steady as she goes!!

Not a trick question. I simply hadn't done the calculation. MY assumption of 1/2 the outstanding arrears (c$137 million) this year (and half the next) yields $68.5 million from arrears in 2026. The difference remains immaterial given the uncertainty.

Add to this the $43 million or so of FCF from actual current operations.

Assume they do. How much arrears do you think are recovered in 2026?

Now you know why the stock was being walked up. Unfortunately a tiny placement to retail is immaterial to seeding true interest in the company. A much larger placement to institutions is required. When market conditions allow it...

"THERE IS ABSOLUTELY NO WAY A £1B WOULD EVEN BE CONTEMPLATED - NO WAY !"

I agree. No way anyone would pay that much. But consolidation makes immense sense and so stock-based mergers based at or very near to current market values would be very attractive. Bigger entity, bigger clout. Also would provide a more liquid security for the capital markets (and improve access to monetisation opportunities for the insiders that restructured GKP 10 years ago). Mop up Genel and Shamaran, which have no real reason to exist as public companies (not operators), at the same time.

Conditioning

Schroders sold another 0.887% of the company's shares

For every buyer there's a seller - always. The three trades have a MIC of "SINT" used to report trades under MIIFID rules. We will have to wait to see if an institution (or institutions) crossed any holding reporting thresholds. Keep an eye on the regulatory news section of the company's website. In an institutional context the trades aren't that big. (Norges held 9.7 million shares as of 23 January.)

"Not totally relating it to Wood Mackenzie but just the feeling the interim arrangement will somehow be extended."

Hence it is useful to calculate the 'breakeven' Brent price (assuming a particular Shaikan discount) below which the provisional arrangement is favourable and above which it is disadvantageous. For now the variances aren't dramatic.

"Also not sure how you envisage the KRG finding the facility to pay back IOC debt at $40m per month for 2 years?"

I don't have the answer but the IOCs won't invest unless there's a suitable (and working) arrangement in place and so between the KRG and ICG a solution has to be found. If not, lop the 42p of my valuation. That would hurt (and dramatically more so than a three month extension to the provisional arrangement).

"Sounds ominous, anybody else thinking another 3 month extension to interim arrangement is on the horizon?"

Not me. I don't think this is a difficult process. Maybe they're still squabbling over transport costs or something but reconciliation to contracts can't be hard. So I don't see the Wood Mackenzie review as a big deal at all. The - very separate - negotiations with the KRG regarding the arrears (and contract elements) are likely much more of a challenge. I reckon the true balance of the receivables at the end of last year was about $137 million. I assume they get half of that back this year and the other half the next. Discounted, that's 42p of my valuation.

"Carelessness yet again,

Profit Oil = 38%"

45% (versus 40%) provides a little more headroom for investment.

They have no R Factor? 38% of all non Cost Oil would be remarkably generous.

[With Shaikan, the split between Cost Oil and Profit Oil is 40:60 (for as long as there are enough unrecovered costs to meet the max; less if not). The Contractor has an 80% share (61.5% GKP, 18.5% MOL, with the KRG having the other 20%) of the Working Interest in Profit Oil with the Working Interest being determined by the R Factor. Currently, with an R Factor of 1.25, the Working Interest is about 26.3% and so the Contractor has 0.8 x 0.263 = 21.0% (16.2% GKP, 4.9% MOL).]

"higher Cost Oil percentage (45%) AND higher Cost Oil percentage (38%)"

???

"moved down with the FX to 204"

down to 203 now

Basically if you had simply grossed up my YE 25 value of 172p to YE 26 at my discount rate you'd have 198. Then dropping the discount would have ceteris paribus added about 22p. But having extended my model for 2026 in detail I got 208, which has now moved down with the FX to 204. All cum dividend.

My 2026E average bopd is 39.5k and weighted average Brent is 58.50 (assuming strong Jan and Feb, weak 2nd and 3rd Q, $60 in 4Q).

I currently price in 50k production 2027 and beyond, reflecting field production decline offset by the benefits of water handling. Successful drilling would add to that and is a key potential upside. I'd love to see to see them drill 3 wells early next year. (9 month lead time on ordering a rig to drilling.) But we need to get through this important interim period first.

Gave you that on the 23rd

That was a good plus up, partially offset by the weak production and Brent expected in 2026. The fx has continued to chip away at it.

And the USD down. Ugh! The weakness over the last week or so has knocked 4p off my valuation of GKP.

Let us know when you've raised these questions with the company and what they said. The company has provided costs associated with the water handling equipment. They've also guided that such equipment "target[s] incremental gross production of 4,000 – 8,000 bopd above the anticipated field baseline at the beginning of 2027." So we have expected costs $ and benefits to volume (bbl). That's good enough for me.

And continuing in the New Year