Member Info for Straycat

‘The company continues to have excess capital, a lot of which is tied up in no-return assets.’

What about the future, and any plan for production development?

And the cash flow to develop it?

This is a volatile commercial and geo-political environment.

With no debt, cash conservation is our best defence against interference about which GKP have no direct control.

The bigger question concerning the timing of this largesse is; what’s going on behind the scenes?

Hey rog,

As you stated so succinctly yesterday;

‘Patience ( and balls ) being rewarded’.

Quite right, this share is not for the faint-hearted.

But I’m not so sure it’s best to invest part of your pension fund in GKP.

As you posted:--

‘Personally I can only hope they’re not gambling with my pension fund because I’d bet they’re not gambling with their own money.’

However I certainly I haven’t take my own advice. It’s a limited part of my pension fund!

Truth is, you’ve got to be able to balance success and failure in your judgment of lifestyle and investments.

Critically in a share like GKP (and as a baby LTH) you’ve got to be able to afford to lose.

So we’ll see.

SC.

Good isn’t he?

But what does all this really mean?

BACKGROUND

‘Gulf Keystone is today setting out an updated approach to shareholder distributions in the current local sales environment to enable investors to better evaluate the prospect of future returns ahead of the restart of Kurdistan exports.’

DIVIDEND

‘The Company's cash balance was $110 million as at 7 October 2024.’

‘The Company is committed to returning excess cash to shareholders. Looking ahead, the Board plans to review the Company's capacity to declare an interim dividend on a semi-annual basis around the time of the Full Year Results and Half Year Results. Furthermore, share buybacks will be considered opportunistically throughout the year.’

‘Gulf Keystone today announces the declaration of a $20 million interim dividend. The dividend is equivalent to 9.216 US cents per Common Share based on the Company's total issued share capital as at 7 October 2024 and will be paid on 31 October 2024, based on a record date of 18 October 2024 and ex-dividend date of 17 October 2024.’

SHARE BUYBACKS

…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").’

‘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. 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. 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. 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.’

THE FUTURE?...

‘Following the reopening of the export pipeline and normalisation of payments by the KRG, the Board plans to provide an update on the Company's approach to distributions.’

‘…with a year of capital expenditures and costs evaluated as the primary reference pointensure the Company is able to transition successfully from local sales to the restart of Kurdistan exports and normalisation of Kurdistan Regional Government ("KRG") payments.’

GKP are clearly invested in taking care of their shareholders.

But what is their motive?:-

1)Is this a sop to keep us on board during the current difficulties because they find they can afford it?;

2) Is it the prelude to a different style of trading locally and rewarding shareholders under a new local trading model?;

3) Or is it the prelude to a re-opening of the ITP and a resumption of export trading?

Don't get me wrong, I’m personally delighted at this news. It’s a very bullish RNS and may trigger future announcements on exports.

Hi C*ckeye,

Long time no speak.

You might be right about that.

But if you are, then JH just milks the Field for the shareholders and the staff.

He has no other choice.

However, I believe you're wrong.

I reckon the bet is that we're going to get through this and revive the self-funding dream.

Unfortunately, I might be wrong too!!

Don't you just love this share??

So shortly there'll be five NEDs on the Board and JH and G P-L as the only executive Directors.

Twas ever thus in my six year experience of this share.

Excellent, faultless Board self discipline...

Why aren't there more operational executives sat around the Board table?

You know, the peeps who are 'living the dream'/'enduring the nightmare' on a daily basis and could contribute to the strategic debate?

Not wanted? Not good enough?

No wonder confidence in GKP is, as Hemmingway might have said, 'a moveable feast'...

The Operational perspective is surely critical right now?

‘Straycat, then - under those conditions - you have to assume they can recover only the costs incurred each month. The "36%" yardstick no longer applies as Cost Oil is no longer at the allowed maximum and more sales are Profit Oil.’

Exactly right. And it is a ‘Doomsday scenario'.

Profit oil. Not my preference.

Remember, I’m the one championing a self-funding development to 100k bopd!!!

But if you can work a P&L on the basis that it’s a stand-alone business, regardless of outside influences (and I reckon GKP can) then finally JH has regained control of shareholder destiny.

More importantly, he can re-define it.

Then shareholders can make informed decisions about investment. At the moment we are working in a vacuum.

Currently GKP’s destiny is largely out of its control. JH is simply doing what he can.

Look at and read the noise on this bb right now, debating any/all potential outcomes of future deliberations about which we have little knowledge and absolutely no control.

In management terms, worst case scenarios enable defensive strategies. Nothing more.

But right now we need direction and clarity.

At the moment we have neither.

And I find it incredibly frustrating.

For what it’s worth, I reckon the ITP will inevitably re-open and GKP will re-negotiate its future on acceptable terms.

It’s the timing that is the problem for me.

Stars,

I'm talking delinquent debt and taking it out of the equation for the purposes of analysis.

I'm assuming NO debt recovery and NO ITP re-opening.

Just a continuation of existing trading conditions.

What is it about that you don't understand?

On any sensible analysis, and given the current status quo, GKP is cash generative in its current mode will make between $50m-$100m FCF per annum.

That is not to say that this is the ideal solution...far from it.

The ITP needs to re-open on commensurate terms.

In the absence of that, the question remains:-

How does GKP manage and enhance shareholder value when it's not entirely in control of its future?

Answer. It milks the Field and looks after its shareholders and its employees.

What else can JH do?

Starsalign/P,

You both assume the current status quo.

Take the P&L back to zero, the previous arrangements as now are irrelevant, and sit in JH's place.

How does he make sense of his new environment?

His primary duty is to protect and enhance shareholder value.

Surely he has to look at a future where he doesn't even know who he's dealing with?

In that case he'll take his annualised $70m-100m FCF and deal with it accordingly.

In any case he has to take steps to exercise his primary duty.

To enhance shareholder value.

Harsh.

Don't agree.

Have you run the P&L numbers at current performance levels?

The FCF is strong and capable of growing more production with more capax.

= potentially more shareholder distributions.

P,

Model it on non repayment of the delinquent debt and no re-opening of the ITP in the next twelve months/ever and no other variables apart from local sales.

Where do we sit, as investors?

I reckon we're in good shape in that brave New World...just got to get used to a new sp perspective.

What's your opinion?

Obviously you need to outline C, D and E in that case...

Sooner or later, us lot have to have a discussion about Plan B, i.e. no re-opening of the ITP until its contractual conclusion and its potential impact on GKP's performance going forward in the interim.

I'm not sure we're ready for that...are we?

In response and sequentually\;-

1) 15%.

2) The capex replenishes itself out of monthly returns as you well know, if the self-funding model is reformed on a comparable basis.

3) Yes. Because nobody says 'have taken a bathing'.

Not anywhere. Not any time.

'[For that to represent a 20% return on capital employed, GKP has to keep its invested capital under $260m. Capital is currently invested in cash, the CRP and receivables...]'

Two points:-

1) who said a 20% ROC was the barometer? You? Because it's a risk investment? In a renegotiated environment that may or may not be so;

2) Given a re-set of the arrangements to enable self-funding growth to 100kbopd, it's a five year plan. At no point does it require more than $260m a year to develop. And even if it did, GKP could carry the load, if JH renegotiates accordingly.

Oh yes,

3) and I forgot...I'm talking to a Bot!!!!

'FCF per month is a better metric to look at rather than revenues.'

Really?

You think?

How patronising...

You're getting found out now P.

Just keep posting; love it.

The trouble with you and me Jens is that we believe in real analysis, not propaganda perpetrated by gainsayers who have their own private agendas...

Sadly, I too have my own agenda.

I'd really like GKP to see it's way through these current difficulties.

And I think they can under the stewardship of JH.

And I might be wrong.

But at least I'm not 'taking a bathing'!!!!

At the very least, I'm taking a bath...

PUTUP,

'GKP and the other IOCs have taken a bathing in the past by investing too much capital and relying on long-dated, highly uncertain and difficult production progress and payments reliability from the KRG. How much appetite for risking capital remains? '

Who in the real world says that?

...'taken a bathing...'

The phrase is 'taken a bath'. That's common parlance around the English speaking world.

No one's ever 'taken a bathing'.

That's bot language stripped down from the internet...

I have growing suspicions about you and your propaganda...seriously.

Or maybe I'm 'taking a bathing' without knowing it!

You need to clean up your act.

Ha!

It's not a p*ssing contest P.

And if it was, you'd be a long way short...

Go back to your number crunching and get your nuts off in the only way you can.

By attempting to influence the innocent with your analytical misdirections.