Member Info for Straycat

There's something strange about this buyback...it's clearly motivated for different reasons.

Please, for the sake of intelligent dialogue, can we engage in a conversation about current GKP buyback motives?

Because I am wholly unsure.

In my Corporate world experience, buybacks always have a motive.

And GKP have expressed theirs. They think the shares are undervalued compared to their 'intrinsic value'. Even in a difficult and turbulent trading time.

Yet GKP are not pursuing them. One buyback in nearly three weeks tells its own story.

Why aren't they following through?

Stop talking b*llocks and try to keep on point.

What's the Board's buyback strategy in the context of their view of sp undervaluation?

Surely the Board should be buying back at current levels to 'press' the Market to make its mind up in the current commercial trauma.

To establish whether their premise is right.

Why aren't they?

But you have persistently argued that capital redistributions to shareholders are price insensitive. They’re just redistributions.

Now you’re arguing that the Board, through their delegates, can be selective as to when and how much they buy!!

Score pointing aside, ADVFN aside, there’s obviously something else going on here.

Where’s the buyback strategy going?

There clearly is one.

Not a clue…

Look on ADVFN, where the lunatics devour each other, bereft of any sensible discourse.

Unfortunately peeps on there are making an argument...and it has slight resonance simply because there is an information void.

For me, the lack of buybacks is part of a strategy...I just don't know what it is.

According to RNS dated 13/5/24:-

‘The Board believes that GKP’s current share price trades at a significant discount to the intrinsic value of the Shaikan Field and does not adequately reflect the near-term free cash flow generation potential from local sales…’

And the Board then engaged in a regime of a $10m buyback for cancellation.

Which they are continuing under a new initiative on 8/10 under which GKP has launched another $10m buyback for cancellation.

Presumably under the same rationale. No other rationale has been given.

The only problem with that analysis however, is that It’s now 4/11 and there’s only one buyback for 16.6k shares reported on 18/10 @ ca $20k with a vwap of $1.2475. That’s one purchase over nineteen trading days, and meaningless in terms of the impact on the latest $10m buyback initiative.

Oil price variations are irrelevant in this context because these buybacks are clearly pre-determined by GKP’s view of its discount market price referenced against GKP’s view as to its intrinsic value.

So if the Board think the share is undervalued, why aren’t their brokers buying back?

Normally in these circumstances the cancellation buyback would test the Board deliberation that the shares are undervalued by challenging that market valuation, using the buyback for cancellation tried and tested approach.

But that’s not happening. Quite the reverse. Why?

The purchasing brief to PH and C has clearly changed since the original briefing on 13/5.

Something’s seems different and, in the absence of further clarification, rumour and speculation always fill the vacuum. Elsewhere the speculation is rife.

I don’t have the answers, but like I say, something seems slightly different this buyback around…

Patronising and hilarious in equal measure!!

PUTUP can’t deal with sardonic humour…he’s not had to deal with it yet.

Poor little Bot.

So you think the shareholders are going to vote against a final dividend next year?

What planet are you on?

There’s something about the word ‘interim’ in the context of dividends that is mildly erotic, suggesting more to come (as it were) at year end.

But not so much as the word ‘cancellation’ in the context of buybacks:-

‘RNS dated 13/5/24:-

The Board believes that GKP’s current share price trades at a significant discount to the intrinsic value of the Shaikan Field and does not adequately reflect the near-term free cash flow generation potential from local sales…’

And the Board then engaged in a regime of buybacks for cancellation. Which they are continuing under a new initiative on 8/10:-

“in line with this approach, we have decided to declare a $20 million interim dividend and initiate a share buyback programme of up to $10 million."

‘The Buyback Programme will be executed in accordance with the Company's authority to make on-market purchases of Shares which was approved by shareholders at the Company's AGM on 21 June 2024’.

‘The sole purpose of the Buyback Programme is to reduce the capital of the Company. As such, all Shares purchased under the Buyback Programme will be cancelled.’

But I have a question for bb contributors.

GKP clearly have instructed their brokers Peel Hunt and Canaccord on the terms of purchase. Obvs.

So what are those terms?

Because it’s two weeks since the announcement on 8/10.

And the instructed buyers have only bought on one occasion, and only 16.5k shares…

Is there a bigger game at play?

I don’t know.

Can anyone help me?

Simple truth is that buybacks always reflect perceived value.

And those judgments, quite rightly, are within the Boards’ domain. That’s what we pay them for…their judgment.

If shareholders don’t like those judgments then they can vote with their feet.

RNS dated 13/5/24:-

‘The Board believes that GKP’s current share price trades at a significant discount to the intrinsic value of the Shaikan Field and does not adequately reflect the near-term free cash flow generation potential from local sales…’

So if the Board believes that (and they clearly do given the most recent announcement in October about the Board decision to initiate another $10m buyback of shares for cancellation) then as investors, either back that judgment or disinvest.

Binary decision.

I reckon GKP is undervalued, even in this difficult environment, so I back cancellation buybacks.

But it depends on your view of the future...

The only problem with all of this is that we're (I'm) giving him/her airtime to promote his/her own dystopian agenda.

My mistake and I'll chin it. On me.

I'll try and not get tagged and respond, but I can't promise!!!

Okay, it's time to stop this.

RNS dated 13/5/24:-

‘The Board believes that GKP’s current share price trades at a significant discount to the intrinsic value of the Shaikan Field and does not adequately reflect the near-term free cash flow generation potential from local sales The Board has decided to initiate a share buyback programme (the “Buyback Programme”) of the Company's Common Shares of $1.00 each (“Shares”) for up to a maximum aggregate consideration of $10 million (the “Maximum Amount”) The Board will keep under review the Company’s capability to distribute excess cash by way of dividends or additional buybacks, considering the operating environment and the Company's liquidity position…’

Now GKP have doubled down on their position by buying back another $10m by RNS dated 8/10/24:-

In line with the Company's updated approach to shareholder distributions, the Company has decided to initiate a share buyback programme (the "Buyback Programme") of the Company's Common Shares of $1.00 each ("Shares") for up to a maximum aggregate consideration of $10 million (the "Maximum Amount").

What is it about that you don’t understand?

Who the hell are you?

Seriously I doubt your integrity on this board.

Understanding how buybacks work is fundamental in investment terms.

GKP has stated that it regards its sp as fundamentally undervalued.

Hence the continued buybacks for cancellation.

GKP are either right or wrong about their stock market valuation.

If they’re right then the stock will respond positively as the share base shrinks.

If they’re wrong then it won’t.

Either way the share base shrinks and it becomes a more exclusive investment club (for good or bad).

Critically, everything depends upon judgments about GKP performance potential going forward.

And I happen to be a believer in self-funding development to 100k bopd without any debt.

Obviously new terms will inevitably have to be agreed to determine future performance.

And I reckon JH and the Board can navigate those troubled waters because of their resolve.

But I have no time for loose financial analysis without context or commitment.

Any contributor falling into that category is simply trading, which is fine by me but not why I’m here.

PUTUP,

You’re starting from the wrong premise:-

“Self funding" implies that GKP recoups the required investment (done on behalf of the resource owner) fully - at least within a financial year…”

Why is that?

‘Implied’.

Grow up. Self funding in the GKP model is a premise based on cash flow regeneration over time. It is not based on annual returns as a basic requirement.

On occasion, GKP will have to stump up way in advance of undetermined returns…obviously.

It’s called FDP strategy.

You’re deploying an argument that is predicated on your own assumptions about capital investment and returns on a yearly basis.

It’s a five year plan for f*ck’s sake!

You might have to forgo short term profit for long term gain. Surely you get that?

‘For now, the current stock price isn't demanding that I be bolder anyway. If you're so bold, put your money where your mouth is.’

I already have. And I’ve made a fortune doing it.

More pertinently, what’s your interest in this share?

‘The question is "how much capital will it take?" That is currently very uncertain. I want as much of the money as possible currently tied up in receivables and cash returned to us.’

That’s PUTUP’s basic direction of travel.

Which is perfectly defensible.

Unfortunately it provides no reason for long term investment.

At the last count, the capex estimate to 100k bopd was ca.$850m over five years.

All self-funded. Regenerative investment.

Clearly there are going to be revisions to that financial outlook because GKP are going to have to revise their contractual position under geo-political duress.

But the self-funded growth proposition will continue to be key to investor sentiment. Because it provides dividend and buyback cover during the development period.

And JH knows this.

So if shareholders don’t get that basic strategic imperative, then they should probably exit or they’re going to get hurt.

This is a risk share.

Some investors who make commentary here simply don’t get that.

'Oh I am. But I need to see the results of contract discussions. And then I need to see performance by management.'

The rest of your diatribe is predicated on a false premise that the basic self-funding model is flawed.

You're letting yourself down...relax.

Or disinvest...either way I couldn't give a toss so long as you can't mount a cogent argument against self-funding growth.

Got to question your motives on this bb...

Got it in one BS.

‘You fail to understand how capital is deployed within GKP.’

Stupid and insulting in equal measure.

You and I have been disagreeing about GKP’s investment strategy since 2020.

You’re clearly a ‘Snatch 'n Grab’.

Not invested in the potential in the Field at all.

I wonder why you’re still around in that case? Just want to keep milking it?

I’m a baby (i.e. post Re-structure) LTH because I believe in the strategy of self-funding development.

And I’m not on my own.

There’s a lot of lock-in shareholders out there.

Are you real?

Or just the Bot you come across as?

Inv,

My last post was to PUTUP.

I should have specified...

Forget about the $151m delinquent debt. It'll be renegotiated away in any new deal. At least that should be the investment assumption.

But even in this toxic environment, cash conservation in the context of future investment is crucial.

Remember, the plan to 100k bopd is self-funding...

On a personal note I'm loving the latest redistribution, but your myopic dystopian dogma doesn't suit my view of GKP's potential.

Call me an optimist....