Member Info for Straycat

Hey TT,
It's just irritating, that's all. Ne incompetent.
I remember posting on the number of outstanding VCP option shares at the time GKP announced the closure of the VCP in early 2019.
It's not like we didn't know what the VCP potential exposure was.
Similarly we had a good view of the potential LTIP exposure.
And yet we proceeded to buy back 20m shares and apparently forgot to reserve for the potential VCP and other option share exposures when we cancelled 19m of them fifteen months later.
I know I keep bangin' on about it, but I think the Board should be asked to answer for their actions/in actions.
And as a truly responsible Chairman, Jaap should speak up and respond to his critics.
Because, apart from anything else, he's the last remaining survivor of the buyback debacle.
Oh yes, and we're getting diluted unnecessarily as a consequence.

So the VCP is now 'fully wound down.'
It was originally established in 2016 as a device to keep Executive Directors and 'key drivers' in place.
That was never the case.
In fact it rewarded only two people ever; Jon Ferrier and Sami Zouari.
There were no other beneficiaries.
And now those two have received their final payout; between them 1.8m nil-cost option shares @ £2.53. Or £4.6m.
This on top of their previous combined 5m share payout.
And all resulting in a further share dilution that the rest of us have to bear. Common shares in issue now up to 216m.
When we'd already bought back 20m shares to cover such eventualities, just to cancel 19m of them at the 2020 AGM!
Instead of reserving some for this moment which GKP knew was coming in April 2019 when they announced the closure of the VCP.
Idiots.

What an excellent post.
But I reckon it is important to recognise that:-
Your argument that'"it's all about the payments"' will continue to be a paramount consideration;
Equally, the relationship between the Cost Recovery Pool and Profit Oil cannot be ignored.
The $850m - $950m self funding capex plan to 85k bopd - 95k bopd will only come into sharp relief if/when the FDP is approved. Until then we'll continue (for this year) to debate how best to deal with the cash bonanza.
Along with other geopolitical considerations.
But I absolutely love the idea that all our alter egos are all eventually destined to be shattered, sacrificed on the altar of AI progress and our own investment frailties.
Not sure PUTUP will go silently though!!

'The next six months has potential for the stupid factor to rocket in GKP. The key is not to get caught up in it. Good luck Straycat.'
Can't help feeling I've offended you.
Was it something I said?
You don't have a monopoly on the vision for GKP's future.
Because it's a matter of opinion.
And other opinions should be aired and considered, not ridiculed and threatened.
Particularly when they have at least as much validity as your own.
I know you can't see that though.

I didn't say they needed to raise capital to service FDP capital requirements. I'm not even sure they need short term finance.
Any sensible cash flow analysis proves this as a self funding exercise unless there's a complete collapse in the price of oil.
What they do need is to be able to rely on regular and punctual payments reflecting the value of the invoices presented...that's my worry about funding, not raising capital from anywhere else!!
As for getting giddy, it always gives me a nose bleed.

If you mean the annual dividend of $25m being the norm, then I don't believe that the sp will be affected at that level of redistribution whatsoever.
Not when this year GKP will receive anywhere between $290m -$390m in cash receipts.
The bigger question is how GKP chooses to utilise that cash.
Further distributions to shareholders this year in the form of dividends and/or buybacks are clearly a very real option in the absence of any FDP progress.
Maybe as much as another $150m-$200m.
And if GKP chooses that route, then even with net capex @$95m there's plenty to go at this year.
But IF there is FDP approval, well that's another matter altogether.
That'll cost $850m - $950m to take production rates up to 85bopd-95kbopd and that's over a four year period.
However, on the back of such news, then I'd expect a complete re-rate of the Company's prospects as well and that would show in the share price too.

At £2.73, how do we explain the XD share price support unless it's market sentiment?
Historically the XD price has broadly reflected the value of the dividend and reduced accordingly.
But not this time.
Okay, @ $113 the oil price is now a (limited) factor, but it certainly doesn't explain the 13% price movement in the last few XD days...
The sp is now trading @ a 12% premium to the 2021 year end net asset value.
That is unusual in my experience. Suspicious markets tend to undervalue the assets of a business, notwithstanding other extraneous events.
And that premium is after distributing $65m to shareholders, with another $25m to come.
Clearly JH's dividend policy has traction with the markets.
The question is whether that's all that's driving the share price.
Or is something more fundamental going on?
Is it possible that the markets are seeing the possibilities for the Company for the next eight months, not just the next eight weeks?
Or even longer?
Like I've said repeatedly, this is a big year for GKP.

You've never fancied the long term capex investment view based on FDP approvals have you?
Too many variables.
You prefer the present and what's possible in the current conditions.
Fair enough.
Anyway, if you cash in you can always re-evaluate if circumstances change; I'm sure whatever you do you'll keep an eye on the share!!

So you pitched up on the bb around August/September 2020. You declared previous buy prices @ ca.68p and bought back in @ ca.83p.After that you stopped declaring your position, but it's inconceivable you haven't bought more in the interim.
So you've done well and good luck to you for that.
My own investment in GKP goes back to early 2018 and was based on a clean Balance Sheet with no material debt and a plan to develop the Field which was clearly self-funding on any sensible forecasts. And the cash flow forecasts were very sexy.
For me, 15%-20% returns (pre-dividend) given my shareholding, is something to stick around for.
Which is why I'm so interested in the projected sp.
I think your model deliberately ignores market sentiment because it's impossible to calculate...but it is possible to observe.
Explain the sp movement since GKP went XD.

Hi damofari,
Not quite sure what to say about that except that I think you may be delusional!
But because I am incredibly shallow, massively hedonistic and deeply rooted in narcissism I will accept any compliments in a heart beat.
When I bought into this share in early 2018, I was struck by the very ugly nature of the bb discourse; it was obviously too soon after the Restructure; the pain of the LTHs was palpable.
However, over the past couple of years that has changed. And for the better.
Like I said in a previous post, GKP looks like it's in better shape right now than it has been at any time since I've been a part of this bb community.

Don't worry too much about the bb aggression; it comes with the territory of dealing in what has been (historically) a really volatile investment.

Your target's starting to look a tad anaemic...

Maybe, but that doesn't matter because I'm butt ugly...the one eyed three legged moggie, with no chance of pulling anything but my sorry sad a*rse back to the alley every night.

I'm guessing you're a chartist, which I certainly am not.
In my world, a Golden Cross means the faint possibility of redemption when its all over.

So what does GKP's share price look like right now from where you are over the next 2/3 weeks?

That's ****ty talk...I'm getting aroused!!

Hi CCC.,
Yes, I get your points and I have previously posted my rationale for a potential share price above £3.00 this year.

And even for any LTH still carrying losses, it's still a pretty good place to be right now, isn't it?

Certainly better than at any time in my association with this share.

I know I keep bangin' on about it, but anyone else impressed with the support levels for the share price @ 46kbopd and no material movement in the oil price...particularly since it's XD?

Hey vim,
Don't be confused.
Truth is, you've got to admire the resilience of the sp following the xd date...truly remarkable.
Almost as if faith was returning to the Company and its performance /objectives.
GKP now trading above 2021 y/e net asset value; new territory in terms of the relationship between the balance sheet value of the Company and the value the market places on it...and all after developing $65m in shareholder returns with a further $25m to come shortly.
Not really surprising though:-
2022 v 2021 P&L estimates:-
Revenues - +26% - +60%;
Profits (pre dividend) - + 21% - +60% ;
Cash receipts - +30%-+75%.
What's not to like?
£2.53 looks okay to me.

'GKP has three basic assets; its net cash on the books at any point in time, the CRP which it is monetising at a rapid rate now, and the free cash flow it makes from Profit Oil.'

It may have another intangible asset though now.
Goodwill.
Can't value it, but it looks like it's finally made an appearance....

2022 share price forecast.

Let’s deal with the assumptions first (simplified):-
Bopd = 46k-50k. (F/Y 2021 43.4K. First quarter 2022 45.5k);
Brent Crude = $85 - $100. (F/Y 2021 $71. First quarter 2022 $100);
Continuance of payments baaed on 90 day terms and residual $8m clawback achieved.
Net Capex $95m;
Additional nil cost option issuances @ 6m shares.
There are others, but trying to make this intelligible…
Forecast Outcomes:-
Revenues $380m-$480m. (2021 - $301m).
Profits $200m - $260m (2021 - $164m). These 2022 profits are stated before any further shareholder dividend distributions which could be up to $100m. And any buybacks for cancellation, which might amount to another $50m.
Cash Receipts $290m - $390m (2021 - $222m).
Normally market cynicism means that without Regulatory News or wild speculation, plc’s trade at a discount to net asset value. And with one notable exception, this has been broadly true for GKP as well. However, tonight GKP is trading at or around 2021 closing net asset value. Having gone XD. Pretty impressive stuff.
Driven by shareholder incentives and other encouraging news over the past twelve months, it may be that market sentiment is changing.
IF GKP makes between $200m and $260m in 2022, then the balance sheet will close with net assets@ ca. $630m - $680m, and that assumes another $100m in dividends during the year.
If the nil cost option shares increase the Common Share total to 220m, then it’s possible to see a share price in a range between £2.90 - £3.09 if sentiment remains constant.
Obviously this analysis ignores any RNSs, which will affect sentiment one way or the other depending on the content, including any further dividend announcements.
But supposing GKP gets FDP approvals to 85k-95k bopd?
Or simply works out its production issues and moves to 55k this year?
Then what?
I might be wrong, but it feels like something is changing in terms of market perception of the Company.
And if I’m right it has got to have something to do with the change in management approach since JH arrived on the scene.

£3.00 minimum on my numbers...possibly more.

£3.00 by year end on current trajectory.