Member Info for Shevek

Probably right on the ops news but the fact they aren't communicating well or consistently on the dividend isn't helpful. They were meant to be a regular dividend payer and I'm all for quarterly dividends but it does nothing for credibility to say dividend will be announced at end of may and then say nothing in an announcement on 1st June about it when your last RNS said you would announce end of May for payment in June. I'm not selling any shares but it's really simple and easy stuff to do that they constantly don't.

Not what we were all waiting for to be honest.

I don't know why they can't just communicate properly.

It's not that hard.

Hey CC,

Agree with the quiet afternoon.

I thought clive needed about 30p for the pay day.

I read it as SP and Mkt Cap both needed to be met.

Given no of shares in issue at current fx $800m about 30p.

Have a good long weekend all.

Hey Somm, where are you getting your $20 a barrel?

I had thought that they were at a Domestic Price of $35 dollars which was going to increase by $5/10 a barrel with the new Oil Trading Sub. According to the presentation there are costs of about $7 for delivery and further taxes of about a dollar.

Therefore, I am expecting them to be netting between $26 - $35 a barrel through the domestic market.

FROM RNS:

Prices

The $25-30 per barrel discount for oil sent through Russian pipelines together with taxes still set at the full Brent price makes selling oil to the international market less attractive than selling domestically and to direct to local refineries, where the net price achieved is approximately $35 per barrel. Consequently, all output is currently being sold domestically.

Oil trading

The Group has also formed a wholly owned oil trading subsidiary to take advantage of changes in the regulations, which become effective from 1 January 2023, and which for the first time will allow the Group to sell its own production direct to international and domestic buyers. This is expected to increase the net price received by between $5 and $10 per barrel.

Thanks for this CC, great info as usual!

The mini village for production, the new drill at 803 all points to an excellent result!

This has made my Friday.

I look forward to a full update from the Company in a couple of weeks hopefully putting all of doubts people have to bed once and for all!

Onwards and upwards... :)

$100M is about 7 years of current dividends...
Imagine that as a special divi announcement!
I believe this was referred to as a potential M&A windfall at the AGM :)

It's flying now!!

The complete lack of RNS now has the market a bit stumped in my view. Why say nothing, is there nothing to say? Bidco suggests otherwise. This news blackout may continue with orthodox easter coming up this weekend so unlikely for news to come from Kaz till next week at earliest, I think people will start buying back in on FOMO soon. The ISA bounce will help. The hot money waded out assuming a quick RNS that never came, whilst long term holders here have kept adding. Many have just reinvested ISA allowances into CASP knowing that tax free dividends and capital gains are gonna be worth a pretty penny on this one! 42p soon says the Rocketeer. Holding out for the mother of all updates Clive, please.

Trotsky, I read this at the time as adjusting for potential dilution, a small amount of which has come to pass. So in effect the market cap is the limiting factor (it's an "and" not an "or") so the share price needs to be higher at the current number of shares, which is good for us. £15MM each is two and a half times the current annual dividend so they're not doing too badly! However, at that share price I doubt many of us will complain and I'm sure they'll flow some more deeps to pay for it!

I think the truth is they can still fit in a payment of the dividend on 16th March.
What is optically strange is that to declare the "February Dividend" after today by the dates in the table, means it would have a record date in March. I guess that's not the end of the world.
This is Caspian after all and maybe they've asked the exchange for an amendment, which is also possible.

Board Composition, Skills and Capabilities

Between 1 January 2021 and 4 March 2021 the Board comprise one executive director and three non-executive directors.
Between 4 March 2021 and 31 December 2021 the Board comprised two executive directors and three non-executive directors.
From 1 January 2022 the Board comprised three executive directors and two non-executive directors

Perhaps this is why things appear to have turned around in such dramatic fashion.

I think Free Cash Flow is a term that can generally be defined in a number of differently nuanced ways to mean different things to different people as it is a mix of P&L and Balance Sheet items.
The key here being the level of investing activity (in new drills).
However, it should be a number based on the cashflow generation of the business (which increases with BOPD increases and boat hiring).
I think this ambiguity is on purpose to give the Board flexibility.
However, I do not believe that they will stop at £1MM per month.
That's how they get money out...
They wouldn't have set up a UAE structure not to pay through it.

The important thing here is we have (almost) had ten trading days since the RNS and the price is solid.
That hasn't happened for a long time...

Fair enough McQueen, top slicing has been on my mind...
After all, we've mostly all been here long enough to know the Deeps are tricky and it's not a done deal yet but frankly that's why the price isn't in double digits.
The different from last time is that we have a dividend that is well covered and is expandable as per the policy.
If there's another barge lease for this year and the shallow production comes through back to 4k as expected that could increase the dividend to £2MM per month alone based on my calculations.
With a proper flowing deep (3k+) you've got the be looking at £3MM dividend.
So even the basic dividend yield (ca. 8% at these prices - declining daily as we rise) here is good with a lot of news non deep upside to come which could double it.
Admittedly, if they balls up the well this will take a battering but I think the dividend gives it a floor this time and lots of opps for dividend growth from shallows and boat alone.
Ahoy :)

The other bit I've pieced together is that in the WH Ireland Fair value report from it assumes a 4.5km2 reservoir at 6p unrisked (0.6p risked).
However, in their note they talked about a new 13km2 column for North Y.
This is another oil field discovery on top of that 13km above with what looks like 100m.
Importantly in more easy to drill sandstone.
That adds a lot of value.

I'm down with £10 :)

Clive's Goals of the month, so far:
1. 3rd Regular Dividend Payment (that still many here scoffed would never come - just saying).
2. Boat charter, with what looks like regular charters to come. Underscores 1. for a long period at current production, especially if 2023 charter follows as I would expect.
This brace from "Big Man" Clive in normal circumstances would be more than acceptable.
However, we know that to bag thr Champions League place Clive still needs to net a suitably upbeat [and detailed - may be too much to ask tho] operations update in the next few weeks.
Come on Clive, all we need now is news of 802 flowing at commercial levels and has been on successful test for a week already. I don't ask much.
That would be three rabbits out the hat in January to celebrate the Year of the Rabbit.
It's written in the stars Clive, make your first hat-trick happen.
I stand with Clive :)

On dividends, Clive said the first one would be "meaningful" at the EGM.
I think the point is that it's what cashflow that's being generated going forward that drives the dividend level for the next year, not a look back.
They should have been getting quite a bit of cash in over the lat few months and the most ever for the months May, June and July.
At 4k bopd (soon to be 6k bopd in my opinion) the maths shows an ability to pay a 2p dividend over 12 months quite easily (at about 40-50% cash to dividend usage) they only need to make quarterly dividend payments from July/August forwards so this is the relevant metric.

At 4,000 bopd it's about $100m revenue (pre taxes, costs and drils - which assume $50m) = ca. $50m for dividends
At 6,000 bopd it's about $144m revenue (pre taxes, costs and drills - which assumes $70m of these) - ca. $74m for dividends
This assumes an international price of $90... and domestic of $30

The past determines how much cash at the bank in hand they will have on the first payment date.
So it matters for the first dividend amount but to really to asses the payment of dividends for the year we need to look at the following:

1. Cash in the bank at August 22 (last figure was from June 2021 - £0.3M - so what have they generated from then)
2. Cash generation from August 22 to August 23 (that's where the 4/6k bopd comes in)

That's what drives the dividend.
I personally think the first one will probably be about 0.5p and go from there.
If they sell the barge then it's party time as you could easily use those proceeds to pay a much larger dividend.

Without the equipment in place (i.e. more riggs etc) there isn't much point in not paying a dividend.
Getting extra equipment to Kaz has in the past proved exceptionally slow.
God knows how slow it is now with all the delays to absolutely everything happening.
It was a masterstroke getting their own equipment.
Also, until a method is proven on deeps (which they are doing) it doesn't make sense to drill drill drill those, shallows yes but they are doing that.

I agree with Coffee. I think they will have more cash to pay a dividend than people think, that amoiunt grows day by day.
Also, I think that we should have some further prodiction coming through quite quickly from the shallows.
At 6,000 bopd (not far away in my opinion with the two wells soon to be finished) they shoudld have about 2p a year based on 40% of sales cashflow going to dividends. This number depends on drilling (costs are much lower now) and taxes - I forget how much % they pay on int'l and domestic - what the net take is after tax. However, 40% of cashflow feels like a good yardstick.
This is assuming 65/35 int'l / domestic and $90 / $30 (if the urals discount goes - gets even better).
They should in theory be able to add 2-3 shallow wells a quarter.
If that's at 1,000bopd per day it soon adds up...
Remember most operational costs are not in USD but local currency (that has devalued).
Also, when the accounts are done I think they have to accrue historic cost for the profit and loss.
However, the cash has already been spent.

I would expect them to be cautious on more deep drills until they have a proven method like the shallows.
They've said after fulfilling license obligations it will be about getting the already drilled deeps to flow.
Also, deep flows are 100% domestic at the moment....

Let's hope the sun it really rising this time, feels like it is.

Hello,
From memory they defo need to complete a 90-day flow test (also needed to resource estimate purposes) but I think they also need to have met their appraisal drilling obligations as well. The key bit however, is that once in production license scenario I think they are only allowed to infill drilling thereafter.
So my assumption is that they will drill to find the edge of the reserviour and then switch to a production license.
Obviously, before doing that they need to have cracked the deep puzzle.
However, with the shallows doing what they're doing it makes complete sense to focus on these build up cashflow and then focus on the deeps. If the deeps had flowed as they'd hoped, no one would have been complaining but hopefully they can use the horizontal techniques there to good effect as well and get crazy flow rates.
I think dividends is a good idea (I could do with some cash back after all these years...), they only have so many drilling rigs/assets. So it makes sense to make the stock more appealing to inst. investors, show they've delivered and get a full re-rate.
Once they declare the first dividend then people will wake up to this one and Clive can take his fresh presentation (hopefully with new buses) around the City.
Have a good weekend all. It's been a good week for news, more to come soon with the results.
This is only so low because of the war I think.
Cheers.

In summary, the highlights from the AGM were as follows:

- Divend expected to be "meaningful" wouldn't be drawn on exact amount but also expects it to create a very high dividend yield at this price range so hopefullly should help with a re-rate;
- They are happy with current route to market for the oil (even with the discount) but have three other options in need;
- Focus on shallows and getting production up. Will do the remaining drill committments on the deep but expect then to make those wells drilled work and produce; and
- The boat has some promising leads but nothing concrete as yet.

The management seem to have it in hand and aren't really that fussed about share price at this stage.
Let's wait for the dividend announcement and see what the amount is...
Cheers.

Hi KK - it's from the RNS this morning.
Quite a bit of stuff in there but it's a long read!
Main points didivdends and the purchase from Qatar.
Cheers.