Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
PUTUP,
Here's some 'proper news'.
You squeeze your suppliers, you aggressively push your short term sales position, you crush your overhead, and you deal with your capex commitments. And that includes asking your suppliers to become a part of the current problem.
They will have any /every interest in participating if the communication is common sense and business based.
Simplez.
But that takes real management and explanations to the Board concerns to achieve,
The Board have to believe.
So good that JH has invested the Board in his quest by deferring their earnings by 20%
They're in. They've acquiesced/ committed..
And good on them I say.
And there's a reason for that.
Either they're terrified of his presence (very unlikely) or they've understood the position and have responded accordingly and become 'Joiner Inners'.
You and I should strike up a dialogue again.
In General Management terms, right now the job is to rein in costs and develop sales concurrently.
And on that matter of cost control, capex features large.
Only essential maintenance to 40k/50k bopd should be considered right now.
If they can sell it @ meaningful prices!!
Stating the blindingly obvious.
Forget the 'dream' for a moment and settle on the survival and development of GKP in its current circumstances.
Let's take the histrionics and emotional turmoil out of this.
GKP is fully functional at current production levels of 23k bopd ( let alone 40k bopd ) and even @ $30.
The Board have a duty to inform investors of their concerns as to future performance.
And they have.
Including the possible need for further cost cutting measures and even the prospect of further funding if necessary.
They also have a duty to inform shareholders of ultimate failure. GKP is finished.
But if anyone on this bb thinks JH is sitting idly by and watching/hoping what he's done to shore up curent FCF is enough, then they are way out of their depth.
If he's as competent as I think he is, GKP will be trawling sales from various new 'contacts' and working hard to improve the market price locally. Or trying to develop new markets for their products.
Because, come what may, the oil will flow.
And sooner or later that tap will be turned back on.
But this time the IOCs will hopefully (via AKIPUR) be able to determine the direction of travel re regular payments and contractual commitments. If they stand solid. Unfortunately some of the members are not in the same financial position as GKP, so we'll see...
And if they're smart, it will be before they recommence pumping oil.
Once again I stress, the oil will inevitably flow.
This when JH earns his money, and he's at least made a start.
And a good one for my money (literally!).
Anfil,
Exactly.
Well sort of; as that analysis is good enough for me to go to guns (largely because it confirms my own spreadsheets)! !!
In management terms at some point you have to face the challenge or run away.
JH has chosen to front up...and we need him to do that right now.
I read like a JH sympathiser and I'm not.
But I've been in similar situations and his Team are looking for guidance and support.
That's his job right now. And the Board are obviously onside by deferring 20% of their earnings...such a support message to us PIs.
Excellent.
Now he's got to generate profitable sales...God knows what that looks like in Kurdistan.
That Reuters report is both ignorant and inflammatory.
No basis in fact i.e. RNS regulatory information.
We're good for now.
The fact that our performance has been crushed by extraneous circumstances should not detract from JH's determination to 'hold tight'.
And the projected FCFs are all solid, even at $30 and 23k bopd.
Love that he's deferred Board earnings by 20%...cool.
Exactly the right thing to do in the circumstances.
Cost control is now an imperative. And JH is doing it in spades.
I'm probably going to buy back in tomorrow.
The Markets are spooked. I'm not.
Great geopolitical chat on the bb, some of it quite helpful.
But the truth is that we don't know what will be resolved, nor when.
And neither do GKP.
But one thing's for sure; the oil will flow.
The Board can only control the Company performance in the face of what's in front of them.
And in the best interests of their shareholders (which is their primary duty).
And they are.
For me, cost control is now the primary concern.
And it's time for them to look at what the cost base is in the context of what the business is currently generating in cash.
As at 8/8 they held $80m in cash with no debt. They are currently selling 11.7k bopd with advance payments (albeit at a discounted price).
So they have breathing space for now. I reckon it'll be Q1 2024 before this issue is resolved. and that is not a problem on current cash flow projections.
In the interim the Board need to be looking at cost control measures including but not exclusive to:-
Capex;
G&A expenses.
In particular the Board need to review their own earnings and how they are paid i.e. on what basis they are paid.
In particular whether they want to reflect/participate in the general shareholder suffering.
For example, suppose they deferred some of their earnings until serious production resumed, even if there was a claw-back clause.
Or any other mechanism that preserved cash right now.
What a statement that would be as to Company solidarity. A PR coup.
Probably won't happen though. Greed is a huge motivator.
Shame imo.
PUTUP doesn't work in isolation.
He never did. And PUTUP knows that because his acolytes are paid by his Owner. One way or another.
Trouble is, we don't know who his Owner is!!
And I don't care.
Because I own serious shares in GKP and care about its future.
And that lot don't.
And I'll continue exposing this bb corruption if only for the honest investors who just want to understand what's actually going on in GKP right now...to the best of my understanding and ability.
I'll tell the truth as I see it.
Not as others projected (PUTUP) that the CPR would be completely depleted by the end of 2022.
What a load of projected tosh. Yet he was selling that as a truth.
Here's the truth.
We've got a problem.
Let's give the Board the chance to deal with it.
I reckon they're doing a decent job in very difficult circumstances.
I know I'm in danger of reading like a Boardroom sympathiser.
I'm not.
I'm a realist.
Hi Slings,
My only issue with is P is that he's corrupting this bb with financial b/s that has nothing to do with the real GKP world right now.
What do you want to know from me?
I'll give you a real view as I see it.
But it will be based on a a reasoned and serious assessment of what's Boardroom thinking right now.
I have no inside info'.
But I am a seasoned senior Executive if that is of any consequence (I wonder sometimes nowadays).
SC.
The first place paid financial analysts go to when they are challenged is numbers and acronyms.
And that's what PUTUP represents.
They will never have actually run a serious business. It's a pipedream for them.
Because they are devoid of any interpretation and general management insight/vision experience.
So for the uninitiated:-
FD =Fully Diluted share;
FCF = Free Cash Flow;
CRP =Cost Recovery Pool.
The point is that this site is now being manipulated by paid posters. Probably without any investment in the future of GKP .
So here's the truth.
We have a serious problem due to circumstances out of our control.
But the oil will flow.
JH's job right now is to limit our exposure as far as he is able.
And that's exactly what he's doing.
Don't be intimidated by acronyms and pitiful financial analysis which is completely irrelevant right now.
Look at what GKP are doing today to protect our position in an environment which is largely out of their control and unpredictable.
The oil will flow.
JH has one job.
To enable that.
And he is.
So take the $80m and look at any future cash flow projections that you might propose over the next six months.
ignore recovery costs et al. Irrelevant right now because outside of JH's control.
In fact, ignore everything else that has been contractually agreed.
But control manageable operational costs, including development capex where it is clearly unnecessary in the circumstances..
We're in shape for the long haul.
Ignore the P&L. Right now it doesn't matter.
Not relevant right now.
Btw, If you stop saying 'huh', then I'll stop accusing you of being from the USA and a Hick to boot!
Yeehah!!!
PUTUP.
Brilliant!!
Your excursion into the English language and its meaning shows no bounds in its ignorance of the subtleties of OUR language.
I forgive you because of your American heritage and lifestyle.
And your complete ignorance, or have I already mentioned that?
You panicking PUTUP?
You should relax.
The oil will flow. The model of self financing growth to ca. 100k bopd is still alive.
Unless the people that pay you tell you to write to the contrary.
In which case you're going to look stupid sometime soon.
Love
Straycat.
I bought my shares (then added later) in early 2018.
At that time the oil was being trucked at 32k bopd for that year. There were problems with hi-jacking, but the oil flowed. The pipeline connection resolved those issues.
The problem is not whether the oil will flow.
It will.
The problem is about how we'll get paid and by whom.
For what it's worth, I reckon JH has done a sterling job in very difficult circumstances. And we've got incoming cash as a consequence.
Enough to sustain the business model for now.
But that's not the solution. The solution is inevitably beyond his remit.
All JH can do is manage GKP resources around issues within his control.
And he is.
I don't necessarily believe that Q4 23 is the deadline.
Q1 2024 is my assessment.
But I do believe that the oil will flow again. Obviously.
In the interim we'll get punished.
And there may be a question about financial support. Whether it be rights issue or private investment.
But for me the bigger consideration is whether to buy or sell, and more importantly, when?
I think I'll stick around a while...
Itsaponzi,
Relax.
The oil will flow again.
Maybe there will be a rights issue, probably not.
But the oil will flow in any case.
The terms of engagement are changing between GKP and their Masters.
That's all.
We'll just have to chin it.