RE: Placing in next couple of weeks?11 Sep 2023 10:22
‘It isn’t at all assured, however, that it [the oil] will flow for GKP in its current form.’
I don’t understand this phraseology:-
1) Are you questioning the possible ongoing form of transport i.e. pipe/truck/or even some horrific combo?;
2) Are you considering that there will almost certainly have to be significant changes to GKP’s contractual arrangements involving KRG/ICG/MNR/SOMO/AKIPUR (and any other acronyms you can think of with an interest in the outcome!);
3) Or are you referencing the possible need for financial and management restructuring within GKP to accommodate the changing circumstances as they develop?
4) Or maybe all of the above.
I am.
But the oil will flow.
‘if we are lucky export sales will restart before year end but I wouldn’t at all be surprised if this situation drags on into 2024.’
I’ve already expressed the opinion that export sales will be delayed until Q1 2024. Because of the complexity of the negotiations, given the competing ambitions of the geopoliticians.
And then there's AKIPUR who've defined (to some extent) their expectations before the resumption of exports. Guaranteed payments being at the top of their list.
But the oil will flow.
‘That’s been the case since June. Why do you keep believing las if this is something new.’
That’s easy. There’s a lot of gloom and doom being expressed on this bb right now. And with some justification. But there are some bb contributors who have very little faith in the Board, even though they are, to a man/woman making their own commitment to the cause. Gentle reminder, that’s all.
‘…if local sales stutter and the pipeline remains closed it’s [a placing] a real possibility.’
That view is posited on the very worst case scenario and also involves a serious cash drain which cannot be recovered by the Board because there’s little/no revenue for an extended period. Certainly twelve months. Meanwhile the Board are suggesting a ramping of truck driven production to 40k bopd. Even now they’ve ramped up to 23k.
JH stated in the H/Y Report:-
• While there appears to be significant local demand for Shaikan Field crude, volumes and prices are difficult to predict
• If sustainable local sales do not materialise and absent [of] other revenue sources GKP would take further actions to preserve liquidity
• GKP would also consider additional sources of liquidity as necessary including external financing
JH is NOT saying that’s part of his current plan. Quite the reverse.
But he has a reporting duty to his shareholders, as do the rest of the Board, to include any Company threats that should be recognised as material to the ongoing performance of GKP.
For the Nerds amongst us, it’s listed under Principal Risks and Uncertainties in the H/Y Report. And that section states what those risks and uncertainties are. The Board have a principal duty to cover that ground so that BDO LLP and the shareholders ar
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