Member Info for RagstoRich

sorry £ not $

They are offering $680m to Cairn (7000 crore) which is what they sold the shares for I believe? Seize high and sell low.....

No chance CNE will accept that (I hope not). Strengthens Cairns case though, India have effectively admitted they were in the wrong by offering this.

Sorry head in the clouds this morning.... ignore all my posts!

No the share price post dividend. However the divi is in USD so thats actually wrong.
The right maths would be: £417M Mcap - £71M (~$100M) = £346.
Share price post divi ~ £1.62.

Fairly simple maths....?

Market cap of £417M - £100M dividend = £317M

£317M / 213M shares in issue = £1.49 a share?

Not sure whats to argue about?

Personally the thought of any near term expansion does not get me excited.

I'm invested here because this company is a cash cow, with hardly any OPEX costs and a massive cost pool which will be be getting transferred to investors over the next few years via buy backs / divi's etc.

If development towards 110kbopd kicks in requiring a large CAPEX spend, massively reducing cash flow and halting any divi / share buy back for the next few years then I would exit this company as I am not looking for an oil company investment that bears fruit 2-3-5 years down the line. I want a big slice of that cost pool in the near term and that's the only reason I'm here!

Easyp - the world will always have an interest in Egypt because of the Suez Canal. Therefore its extremely unlikely it would descend into the chaos of something like Libya.

Agreed it’s not the most stable country but it has to date honoured all debts (BG springs to mind), all be it not always on time (sometimes with significant delay).

Some very interesting articles kicking about re: what’s happening with the majors (Exxon, Shell and Chevron). Expect this to continue and leave a massive gap in the market that will be filled by NOC’s and Private players and (maybe) some smaller public firms? The question is at what point does the investor pressure start to filter down to small caps.

OPEC and Russia will be rubbing their hands, oil price is once again coming back into their control

Not really, it matters what the fund managers and banks think. And they are all heading one way.....

I’m not saying there is no future for GKP, I’m invested here and think I’ll make some money. But long term I think things will change in a big way, in less than a decade I think we’ll see far less listed oil companies and far more privates.

In the end it doesn’t matter what you think, the bottom line is that the whole green agenda / GHG emissions is now a key piece of information for investors. Big funds care about this data (sometimes more than cash flow). It’s a new world in the industry and it’s only going one way.

Like it or lump it it's happening. Climate change isn't new, it's constantly happening. But there isn't any denying it's been sped up by industrialization.

Anyone trying to stop climate change is delusional
Anyone trying to deny climate change is delusional

I think we'll see the biggest change we've ever seen in the oil industry in the next 5 years. Majors leaving very profitable assets purely because they are high emission / dont fit the green agenda. Smaller (probably mostly private) companies moving in while there is lots of money to be made.

Where this leaves countries / companies like Kurdistan and GKP? Who knows, but I think we'll start to see countries with oil large reserves relaxing PSC's, fighting for investment and trying to speed up the production of their oil so they can sell it while there's still a decent market for it.

Sling, on the green / emissions point, I completely agree. But I think GKP isn’t actually to badly placed for scope 1&2 emissions, I think the field produces ~40kg CO2 equivalent per bbl, around half of that is flaring. So if a gas solution is found, the field has the potential to score quite well in terms of scope 1/2 emissions which oil companies are looking more and more at. I don’t expect this to happen anytime soon, but for anyone taking on this field there is the potential for a “good news story” in terms of emissions reduction...

Who are the trolls? Genuine question. I haven’t seen a single person on this board who thinks GKP isn’t substantially under valued?

I’m on here to make money. As is everyone, but I like to use these boards to share my knowledge, try to learn and try to post what I know. I’m also happy to correct people who may not have time or means to produce models or fully understand the make up of oil and gas contracts / PSC’s etc.

I don’t understand the agro from so many on here, everyone thinks this share is going to go up, including me! So why are people claiming there are people with agendas / trolls etc?

FH - Ghawar’s rumoured peak was 2006ish, but that’s contested by the Saudis. It can’t go on forever, but Aramco said 3.8million bbls a day was the rate in 2019. With a very high ~50% water cut.

What a game changer that would be when it starts to truly splutter. It’s interesting to see the lack of bounce back from US shale too, it looks like lenders have finally learnt their lesson.

Sorry one too many whiskies tonight, of course I have a strategy. To exit once the value gets to my exit point! Which is quite a way away yet

No strategy, I don’t think anyone has said GKP is overvalued..... some of us are just being realistic and trying to use data. The others.... well I’d love them to be correct but the figures are based on well wishing! Which is how you lose money on the stock market

Stick to the facts, the data and more often than not you will make money on shares! Start getting carried away with your emotions and basing your evaluations on incorrect data or guesses and your sure to lose money in the long run (unless your lucky)

Not sure why people think that those who are speaking sense have agendas, every poster in here is saying GKP is a strong buy!

Wiseman - You cannot value to company like that for several reasons:

1. This is a PSC so GKP dont own the oil but get a small % of it for being the governments "contractor"
2. There is a discount rate applied to all future cash flow
3. The vast vast majority of the value in this company actually lies with the cost pool rather than the actual reserves because it gives so much near term cashflow

Your all mad, this isn’t the AIM.....

Not sure why you label posters who put reasonable values up as having an agenda. I think everyone has stated that they believe this is under valued. Personally I think by ~$2-300MM and not by $2.5billion like yourselves.

Why do I have these figures? Because I built a simple model to work out how much value GKP get from the PSC each month and discounted it forward and that’s the figure that came out with a reasonable WACC.

Why do you think $2.5 billion? Or is that a number that’s plucked out the air or based on some very dated info?

"At 55k production the share price should be around £5. At 110k you can double it. As for the reserves we dont know the true amount of oil in Shaikan. GKP going to £17 - £25 a share may be unlikely but its not impossible."

147king - no £17-25 is basically impossible, unless you change the PSC itself or oil goes to a unrealistic price (~$500). Even if you find another 1 billion barrels of oil in the group here it will never go to £17 a share. We already have more oil than we can probably produce in the PSC timeline.

SS I can help out with some of those:

(1) explain exactly what the "alleged " gas issue is
It's not alleged, its been stated many times that any further development is subject to a gas management plan. It's also a known fact that the MNR / KRG do not allow production above 55kbopd without this. I wouldn't call it a huge issue as I personally am happy sitting at 55k and making a heap of cash from the cost pool recovery.

(2) Explain the (alleged) issue with the FDP
There isnt an approved FDP? Thats the issue? Tied in with point number 1

(3) Explain why you disagree with my sale price for GKP of £17 -25. Give your calculations.
Impossible. Dont need calculations to work that one out. To get to that value you'd need an oil price of $500+ per bbl (based on flat 55k/d production). Or you'd need someone to come in at $100+ oil and pay an undiscounted price for all of the 2P reserves....? If you really want a breakdown of why £17+ a share is impossible I can put one together.