Member Info for rogthegamer

I previously mentioned my suspicion that Turkey would take advantage of the current situation in the expectation that the legal procedure would end as a condition to reopen the pipeline, this article seems to confirm that. Also looking at the share price the market seems to be comfortable between the low of 143 on the event of the closure and 216 or so alongside the recent results. This should lead to a return to 216+ on the pipeline reopening and given a decent agreement regarding future oil prices and timely payments, including arrears, in a new climate of less risk in GKP shares they should advance alongside increasing production and steady profits, dare I say beyond the recent 320 peak ?

Yes Largo it seems so, the comfort is in the share price movement. For instance on the Friday before the ‘Bad news re. Closure’ was announced GKP shares dropped unexpectedly. ie someone always knows more than others, on this occasion I can only hope that ‘someone’ knows good news.

I did expect to see an RNS today and I must admit that its absence was a concern, ( one early post here predicted 150s. However, the market seems to know something that I don’t or could it simply be nervous shorts in fear of a long weekend that we don’t share with Iraq?
With 90% of my portfolio in ‘sensible’ blue chip stocks I do seem to be spending a lot of time focused on one the one that my cautious wife doesn’t know about, and I must say it has been an interesting year to date. Happy Easter.

Last week Iraq won a long standing legal dispute, this week the Kurds accepted the terms of a settlement that was offered because they had no other choice. Iraq do not want to escalate the dispute at the risk of political instability when the factional situation is comparatively calm, in part due to Kurdish parliamentary support that includes a Kurdish president. Kurdistan needs a rapid return of oil income therefore this will not be the best time to enter a different dispute with oil producing companies. The risks include Turkey taking advantage regarding terms to reopen the pipeline and Iran’s increasing influence in Iraq at a time when they have violent disputes with Iranian Kurds. Yes the shares are a risk but those risks were already factored into the share price, including the pipeline problem. The change this week has been for the better in the improving relationship between Baghdad and Kurdistan. Patience should be rewarded, if not the risks of a very high yield stock were there to be seen and I for one can have no valid reason to complain if I become a victim of my own decision to buy a high risk high reward stock. In short Wait and the accept consequences of our own decision.

I can only suppose that you’re trying to find other things to occupy the mind while waiting for the GKP situation to progress or be resolved. Fair enough because speculating with regards to all possible outcomes is becoming tedious, and In this case patience while putting the shares on hold should be rewarded.

As I’m sure we all know, one reason, the most important, why GKP has been considered to be a very high risk investment is the long standing dispute between Iraq and Kurdistan, even with the oil price at 120 and massive profits being made the shares remained low priced (even at 320) and very high yield reflecting that risk. Given that most of the risk and uncertainty should be removed this week logic tells me that the yield will reduce. Will that be via continued dividends and a higher share price ( 300 / 500 ) or via higher capital investment, and reduced dividends as a company that reinvests profits and grows alongside increased production? We shall see and it now appears that we won’t have long to wait.

Yes, but the Saudi government prefers the fact that China doesn’t care when they murder their own citizens for daring to criticise them.

Disappointed at 7am no RNS but the increased share price was as expected nevertheless. On second thoughts assuming that the next RNS is positive that should trigger a second share price boost. That said the price remains far lower than it was directly following the results. On that day 174 would have felt bad and the only reason for it to feel good today would have been the recent chance to buy at 143. With two or three positive announcements in the ‘Pipeline’ and the increased oil price a return to 220 should be expected.

As I mentioned last week the ‘bad news’ could turn out to be good, and at the time I posted this as a strong buy because after nine years of uncertainty, something that the stock market prices in, a 30+% yield, the KRG will be forced into a deal that starts the process of removing uncertainty thus making GKP more attractive to lower risk investors. ( the nervous kind or should I say sensible ) At 144 the shares would still be a strong buy but I doubt that this price will be on offer 8 am Monday unless the reports published this weekend prove to be incorrect . There is a way to go yet because Iraq with Iran in the background will not be easy for Western oil companies to deal with, but that’s the nature of the industry and we don’t have oil wells in Hertfordshire.

It now seems that the KRG owe 6 billion to oil traders that should have been repaid via future crude oil sales.

In theory the KRG have no choice other than to accept whatever terms Iraq offers, they have no income other than oil. In reality too many countries in that part of the World are ruled by politicians that have an agenda that doesn’t include the best interests of their own people or common sense. In this case Iraq influenced by Iran could deliberately offer a deal that they know the Kurds can’t accept and the Kurds might not accept a deal that is the best that they can get. Just hope that common sense prevails and the oil flows for the benefit of the ordinary people, and of course ordinary shareholders here.

Haven’t been in GKP for long and it’s fortunate that I’ve enjoyed excitement of the ride while waiting for the outcome in a dispute situation that’s been simmering for many years, and thanks to the court judgment, will change in one way or another, hopefully resolved to the benefit of those that have had the nerves required to hold the stock. If I possessed the benefit of hindsight I’d have been in and out of these shares and be a rich man by now.

The question now could be, who can last the longest with the pipe line shut? I suppose Kurdistan’s income has virtually disappeared, so in theory they will have the most to lose and could crack first, but will Iraq with Iran behind them push for a deal that the Kurds will struggle to accept. Turkey can only wait for the outcome of an agreement and then pump the oil for an inflated price because they control the only exit route for the oil. Iraq needs the oil money and they won’t relish the prospect of instability if they don’t reach an agreement that the Kurds can accept. In the mean time GKP can shut down and survive on their cash, hopefully not for too long because the share price will continue on what has become a roller coaster ride. Fortunately Iraq needs Western oil companies and they may offer GKP better terms than Kurdistan has previously alongside less risk. This might be a rough ride and shareholders will need nerves of steel but the rewards will arrive.

While yesterday’s price fall was disappointing I believe that in the longer term this will turn out to be the day when the a long standing problem came to a head and had to be solved., as it must now be. We should all know that GKP was a high risk share because of that dispute between Iraq and the Kurds and for that reason the share price even at 300 was lower than it otherwise should have been.
With production going up and a reasonable oil price, all that we now need is an agreement, one that the Kurds must accept reluctantly or not, and a new deal with Iraq agreement will be one that can work for all parties, because we all need each other.