Member Info for Straycat

Not if the sp is undervalued.

As GKP think it is.

So what's the intrinsic value of GKP shares as we continue to shrink the Common Share base under the current $10m plan?

And what's the intrinsic value if we continue to buyback for cancellation on the next phase amounting to a further 10% of GKP's Common Shares after this $10m buyback?

That's beyond my pay grade.

Anyone?

Greed.

Oh yes, I remember that.

Cost me a fortune.

Then I got real...

'Thank God you're not managing my money.'

I don't manage anyone's money, although I frequently mismanage my own!

Anyway, there's no chance I'd manage your money.

I'm more selective than that.

Not even sure you've even got any to manage...

Some contributors here do not account for investor sentiment.

Pure analysis is not enough.

Sometimes it's not even good enough. And always biased.

Sometimes it's used as a dupe to cloud the overriding sentiment towards GKP's new trading environment.

And the way the Board have responded.

The share price is still undervalued and the Board think so too.

Which is why they continue to buyback for cancellation.

They could stop at any time, but they're not.

The bigger issue is about the next tranche of buybacks and what their purpose is.

Cancellation or Treasury?

Cancellation yes, Treasury no.

Obviously I'm banging a drum...

You've never grasped the nettle of buyback to Treasury, have you P.

Those bought back shares become dormant. And inactive. But they can still be reactivated at any stage.

They're not cancelled. They still exist.

And for example, therefore they are available for future employee benefit without those employees performing.

Tell me what's wrong with paying employees for performance?

Rather than simply hanging around for 'retention' purposes?

What's wrong with Leaders leading?

And being paid according to their results out of the profits they produce?

They're definitely pressing the point of the intrinsic value in GKP right now.

What is it in current circumstances?

I don't know, but I reckon they're doing a decent job to find out.

Dripping the buyback for cancellation is obviously working.

But after the $10m buyback for cancellation we've got the spectre of 10% buybacks without denomination.

No specific identification as for cancellation...only a reference to Treasury.

Troublesome to me.

Thanks P.

So how many shares are held in the Employee Benefit Trust?

down in *****a do lago soon...how's the weather?

and how's the orca?...ugh...

'I don't like being diluted out'.

Another good post Nobull.

IF the next buyback is in partly/wholly to Treasury (which I strongly suspect it is) then the biggest dilution is in my belief in JH...like that matters!!

He should be paying rewards out of tangible profit performance, which is measurable.

And not laying it off against the shareholders to carry the burden.

Supposing FCF in the next twelve months is ca. $70m-$100m. On top of the current $99m banked with no debt offset.

ALL employees should be incentivised to achieve this goal as their bonus targets.

The idea that they should be rewarded for 'staying the course' is absolute anathema to me.

Given that GKP lost £11m in the last financial year, the Market won't give a toss if they make £50m or £60m in that context.

JH should have trusted his judgment and asked his employees to do likewise.

Performance is the only way forward in my experience.

That means that the Team have to believe and perform accordingly.

THEN they get paid for their efforts.

Love the $15m interim dividend now we’ve got the FCF to afford it.

‘interim’ suggests more to come based on current GKP projections…

Modelling @ 48k bopd and $28/bbl for the rest of the year there will definitely more space for additional shareholder returns.

For sure.

And there’s still ca. $5m to spend on cancellations.

That’s not the problem.

The problem is the next buyback phase.

Is it for cancellation or Treasury?

If it’s for cancellation then those shares are gone forever unless ‘in extremis’. Which would require another share issue, and none of us Plebs want that. And very unlikely on any current projections.

If the dividend is a sop, when in fact the Board are intent on sucking in shares to Treasury, those shares will sooner or later see the light of day in staff incentives to stay and then I’m questioning the employees’ commitment to the cause.

JH is a smart man.

I don’t like what I think his business management approach is if he’s going to back up shares to Treasury to reward retention.

Some might say so what? He’s done good job and he’s at the coal face.

With a lot on.

But watch out for his special bonus treatment.

For what it’s worth I think he’s earned it. But some of it is going to be paid in shares and currently there are none in Treasury. So where are they coming from?

‘Retention Arrangement for Mr. Jon Harris Resolution 12 deals with a proposed one-off retention arrangement for our CEO, Jon Harris, through an amendment to the Remuneration Policy. If approved, it will be paid 50% in cash and 50% in shares. The Board of GKP recognises that the retention of key staff is one of the biggest risks facing the Company in the current circumstances. In light of this, it is proposed that a specific retention arrangement is made for Jon. Jon has performed strongly since his appointment in 2021. With the export pipeline closed, he has provided exceptional leadership in urgently reducing costs, building a profitable local sales business, providing motivational direction and maintaining a strong working relationship with the Kurdistan Regional Government (KRG) and other stakeholders. The Board considers that it is in the best interest of the Company, taking into account its shareholders as a whole, to put an appropriate retention arrangement in place for Jon, to ensure he remains available to lead engagement with both the Federal Government of Iraq and the KRG towards an export restart solution and drive the business and the Company’s strategy in the current operational environment.’

It smacks of nepotism.

And suggests that the days of buybacks for cancellation are limited going forward.

Nevertheless, a really solid OpUp with many upsides.

That is exactly my point…just wish I’d expressed it as succinctly as you!!

Because if those shares go back to Treasury then they are dormant but still active.

And can be re-activated at any time.

22m share buyback, which is what is proposed under Resolution 9 MUST be for CANCELLATION.

Or we need a credible explanation as to why retention, a.k.a. rewarding employees just for sticking around, is the need. And how much money might be needed for that retention exercise.

Btw, you don’t buy staff loyalty by bribing them.

You do it by them buying into the GKP proposition and the future of the business model.

As shareholders we’ve all invested in GKP’s future. And we’ve paid enough over time for that particular pleasure.

If that future is at risk unless we dampen down that risk by reference to retention of staff via hoarding shares in Treasury, then we should have some rationale.

We deserve nothing more, nothing less. Particularly serious LTHs who are (rightly) cynical.

Including the Institutions.

Clarification is now King.

I doubt we’ll get it.

It won’t happen because the Board want to keep their options open.

But it will lead to deeper shareholder concerns as to real the motive for the next phase of the buyback momentum.

What happened to JH’s new world of openness and transparency?

We’ll see today…

GKP has categorically stated its opinion that, in its view:-

‘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 from local sales’.

Hence the launch of the $10m buyback programme for CANCELLATION.

Then:-

‘The Company expects to propose the renewal of the shareholder authority to carry out on-market purchases at the 2024 AGM so that this option remains available to the Board as part of the future overall shareholder return strategy.’

Key phrase here is that the renewal authority is that ‘this option remains available to the Board as part of the future overall shareholder return strategy’…

The Board are asking for permission to buyback up to 10% of GKP’s Common shares representing 22,269,865 shares as @ 14/5.

These new authorities to purchase have an expiry date at the end of the next AGM in 2025, and will be executed as the Board sees fit during that period.

So far so good.

But, 9 b (iii) is contentious: -

‘and such authority shall expire (unless otherwise renewed, varied or revoked by the Company in a general meeting) at the conclusion of the AGM of the Company in 2025 except that the Company may at any time prior to the expiry of such authority make a contract or contracts to purchase Common Shares which will or might be completed or executed wholly or partly after the expiration of such authority and may make a purchase of Common Shares in pursuance of any such contract or contracts and may hold as Treasury Shares any Common Shares purchased pursuant to the authority conferred in this resolution.’

Why is this contentious?

Because of the reference to ‘Treasury Shares’.

More importantly, no reference to cancellation of Common Shares purchased under the scheme.

Unlike the latest buyback activity, which is for cancellation, there is no reference as to how the Board intend to treat the next wave of buybacks.

Nothing about any intention to cancel.

The only reference is to Treasury buybacks of what might amount to another 22m shares

‘in such a manner as the Directors shall from time to time determine’.

Is Jaap Huijskes back?

Are GKP going to load up their Treasury war chest with employee retention bonus shares which will be released back to staff for simply sticking around, and/or on the basis of spurious targets?

Because if that is the plan then we can forget any significant share price buyback benefits after the current $10m spend. Those shares will almost certainly reappear on the market in the form of staff incentives.

The Board could at least specify how many Treasury shares they think might be needed to cover retention issues for the Snowflakes.

Otherwise people like me will be deeply suspicious...

We’ll see tomorrow.

Jrl,

One thing's for sure, you won't get 'Weller' if you don't understand this share 'Weller'!!

I thought they were rubbish and I told Parfitt early doors...he agreed!!

Nevertheless he took my serious BMW off to wherever he was going anyway and hurt it!!

Payback?

Nice bloke actually. And his wife was totally gorgeous in every way.

What's that got to do with GKP I have no idea.

Except that we all take risks on people.

I'm taking a chance on JH.

But my track isn't great...

Still damaged my car though...

So just another sad trader, frightened for his future...you should be.

Clue; the Lotto probably won't help you on this share.

That's because you have 'no sense' as to the change that's coming...

GKP's world is no longer settled in its previous enclave.

It's going to have to step out into a different arena, where nothing is the same, and everything is to play for.

If JH is up to it, then GKP will prevail in its self-funding form and we'll press on to 90-100k bopd over the next five years.

Or he won't, GKP will struggle, and I'll squirrel my profits and go find another gold-mine without debt and real ambition.

Trouble is, there aren't many of them.

‘Now, I believe the company is cheap IF it can return to exports with current contract terms in the near future.’

P. That’s not going to happen.

Forget ‘current terms’ and think ‘New World’.

Whatever modelling you’re doing, it must NOT involve the status quo.

Btw, I once met and spent time with Rick Parfitt and gave him my car for the night…not my best decision ever!

The GKP world has changed forever and peeps like you need to get to grips with the New Reality.

If you don’t like it then your choice is simple.

That's a thoughtful post P, and thank you.

Not got the time right now, but will consider your views and get back.

Serious issues raised.

Unfortunately sun seeking tomorrow.

Flights, Airport Plebs etc but Business will be my saviour... my partner will be determining my agenda.

Hopefully you'll hang around because 'I'll be back'!!!