Member Info for Straycat

ValueS,

I get the present direction of travel, as tenuous as it is.

I'm taking a position based on the sales possibilities, which are uncertain.

GKP can, to some extent, contain the costs.

The selling opportunities are a very different challenge.

Both the local interest in buying, and, much more importantly, the short term margins.

Why would we give back capital to shareholders right now when it may well be needed to shore up the Balance Sheet?

Unless you think the business is failed and you just want out...

ValueS,

Let's repair the Balance Sheet first.

Put ourselves on the front foot again.

We took a lot of money in dividends when capital redistributions were on offer.

Let's dig in and hold (or sell, or buy!!).

In any case, now's not the time for any more redistributions of capital, surely?

Very amusing...nothing like a properly orchestrated self-flagellation to get the blood flowing again!!!

Good chat.

hi c0ckeye,

so missed, so loved (but not in a *** way!).

so how do you read the future trajectory for gkp?

you've been around the block and seen all this before in gkp's history, by which i mean the excitement surrounding gkp's extraordinary and sometimes traumatic history.

don't want to engage in geopolitical theory. dull.

interested in your thoughts on the current business platform. and how you reckon it will play out.

'I'd expect all hell to break loose'.

What would that hell look like?

Why wouldn't JH keep the cash as an offset?

Perfectly within his remit.

His duty is to his shareholders, not the KRG.

It makes perfect sense.

R,

I can't even express my share dealing mistakes.

They still hurt and there's so many of them...

For me the issue with GKP is in the fundamentals.

$80+ m in the bank, no debt, available sales avenues (albeit at a significant discount), extraordinarily low oil recovery costs and a willing Board who are prepared to put their money on the line pro-tem.

And sooner or later the tap will be turned on.

Meanwhile GKP can tread water in P&L terms while managing its cash reserves for at least twelve months (probably more).

The share price is a side show right now unless you're a Trader, in which case good luck because you probably won't understand or care about the fundamentals anyway.

'Patience is required'.

When did rogthegamer invest in GKP and why?

This has always been a high risk investment.

Part of its attraction.

And you must have known that if you did due diligence...

Why are we worried about the Market valuation of the Company right now?

It's irrelevant.

What matters is what the Board are doing to deal with the current challenges.

I reckon they should be about intensive cost control and serious sales development.

The structure of GKP is based on low costs and cheap sales (i.e. what the KRG allowed under the contract).

That's the underlying premise of the PSC.

When I bought in, all sales were via trucks. The pipeline happened later. And saved GKP money.

But without the pipeline and even given the discounted prices for selling oil locally, GKP MUST keep selling oil.

Because its cost base is so small and, as far as I can see, it will continue to make money until the tap's turned back on. Just not as much.

Got to keep an eye on the FCF which is all about cash collection and supplier management..

Not hard to do.

Just sell the product. There'll always be a market for it.

It's not like trying to parasols in the Antarctic...

But the oil will flow.

Armas,

No.

Not right now.

Repair the Balance Sheet first.

Stabilise the business first.

Put it back on a proper footing first.

I reckon a year away...

Armas,

Excellent!

I wanted to make a response relating to necrophilia but chose the High Way instead!!

I reckon GKP are good going forward.

But I do like the idea of your 'dead cold hands'!!!!!!

I'm a troubled man.

Hi Armas,

I feel your pain and your regrets. I've read them. We've all got them, believe me!

But I've got a feeling you're not quitting on this right now.

P,

Almost everyone on this bb, in fact most PI's, are taking an absolute caning right now.

So the judgment ends up being buy/sell/hold.

For me the fundamentals are an essential element of that decision.

Because one thing's for sure; the oil will flow.

The issue is how the Board manage this pivotal point in GKP's extraordinary journey.

The fact that they've sacrificed 20% of their earnings is an indication as to their commitment.

And they're on the case re cost reductions at all levels.

Plus they've got alternative sales channels to exploit.

The Balance Sheet is shored up (for now).

And sooner or later (Q1 2024 imo) the tap will be turned back on.

JH and the Board have to navigate GKP through this difficult interim period.

Which is all about cash management.

And they are doing just that.

Which is what they're paid for.

It's why you make the big bucks.

Because managing a business in easy times is easy.

All you need is an accountant to count the numbers.

Now GKP need strength of character.

And for me that's clearly on display.

So if you've got confidence in the Board then relax and let it roll.

Or sell and take the pain.

Interesting times...

That's got to be right.

And you know I hate to agree with you!

However, in my world, GKP should continue to squeeze...the pain should be shared, just like the benefits that were delivered to GKP contractors during the good times.

That's an issue about relationships, and more, that's about JH and his ability to turn heads.

In the end, it's all about his ability to relate to his Board internally and his sense of his supplier dependence.

I'm pretty relaxed about this right now.

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.

Exactly.

I know.

But in JH's position right now you have to play what's in front of you.

Simple as that.

And he is.

As a consequence he's shoring up the cash position and the shareholder exposure.

Give him a break...

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.