Member Info for Straycat

Dead right.
Either/both are financially possible in the new climate of 55Kbopd and & $70+.
And what a great conversation to be having, after so much pain for so long for so many LTHs.
On balance I favour the buyback option, but only for cancellation.
I really like the idea of shrinking the share base by another ca. 10% ($50m @ current sp).
I'd love to force the markets to decide whether they want to play or pass.
JH has created a climate where if he shrinks the share base, then given what's on the horizon (massive re-investment; more shareholder returns; or a combination) then it's going to get more expensive to join the Club.
And I like that kind of exclusivity...

What's your view on a buyback next time out, instead of another dividend Jens?

Jens,
When I bought into GKP in early 2018, what drove me was the almost sexual attraction to a Company that was so fresh and clean out of a complete restructure, and so obviously set for self-funding expansion.
Neither was it lost on me what a potentially attractive sale proposition it was/is, notwithstanding the ‘awkward’ nature of the geopolitics and my major misgivings concerning the Chairman and his gofer, JF.
I still believe in the sale possibilities for this Company.
But I also believe that as patient shareholders the future looks pretty good, given the options now available to JH in the upcoming negotiations.
And that includes at least some of the LTHs as well…God knows they deserve something out of their difficult and painful experiences.

The art of negotiation is completely lost on you, isn't it?
He will have one eye on his shareholder base and another on his upcoming dialogue with the MNR...his job is to navigate the best way forward for his shareholders in the context of his perception of what is possible in terms of field development.
Does he milk the 55k bopd asset before the terms move against him?
Or does he dig in and pursue the goal to 110 bopd?
He'll probably want to restructure his debt arrangements if he wants to do the latter.
But right now all the MNR can see is him taking money out of their only asset without any serious commitment to the future development of the field.
And unless they decide to commit, then why would JH press on?

What’s on JH’s mind?

Taking the half year results as presented, the full year P&L looks a bit like this:-

Revenue - $270m-300m;
Post tax (pre dividend) Profits - $130m-$140m;
Dividend payments - $100m;
H2 net capex - $50m - $60m (H1 @$14m);
Estimated Y/E Bank Balance (post second half $75m dividend payment) - $200m-$250m.
Estimated Net Asset value - $475m-$500m. (Current Marcap: $430m)
Note: The 2021 $100m dividend payment has no material impact on the P&L. it only affects the Balance Sheet and the NAV of Company; the P&L carries both with ease @44k bopd and $70+ poo.

It’s worth noting JH’s comments as well.

In his H1 commentary he states his commitment to 55k bopd by Q4.
But his full year guidance stipulates an increase from 40,000-44,000 bopd to 42,000-44,000 bopd.
Since H1 production levels were aggregated at 43,500 bopd, then his full year forecast suggests he refuses to anticipate 55k bopd in the full year forecast at all. Prudent? Or provocative in advance of FDP negotiations?
At the same time he indicates that in the second half:-
‘…there may be opportunities to consider further distributions to shareholders and to optimise capital structure.’
This man is clearly setting his stall out so everyone around the table can see and feel his power in the upcoming FDP discussions…no harm in that as long as he’s read the MNR/KRG right, and understands their needs as well.

Refreshing at last to see a negotiating strategy though, isn’t it?

Well if he wanted to 'spice up' the market then he's certainly succeeded.
And why not, with $100m in dividends this year and the tantalising prospect of more to come (remember his half year announcement declaring an 'interim' dividend; not special, just interim i.e. half yearly)
Existing shareholders are staying; new investors are sticking around.
Like he doesn't know exactly what he's doing...
And the plan is?
Because this will certainly invigorate the upcoming FDP discussions!

Gertjan ran and owned Sothic capital.
He then invented Astaris which he also ran and owned, but as a consequence had to declare his interest under Stock Exchange Rules.
This is all a matter of RNS record.
Now we have an out of date share register declaring Koomen with 4.71% of GKP's stock, and a Dutch based private wealth fund holding another 11.2 %. Between them they control more shares than anyone else invested in GKP.
When I get a moment, I'll track the shareholdings of Sothic, then Astaris. And I think I know the outcome.
But for now I simply pose the question.

Rephrase:
Is Gertjan Koomen the largest shareholder in GKP including his nominee account(s)?

Is this man the major shareholder in GKP?

TheBig,
In fact, because of the way the interest accrues cumulatively through the year, the net effect is an 11% charge.
But let's not quibble.
You're new to the bb...and welcome.
Are you newly invested in GKP?
Because if you are, you've just stepped straight into a pile of deep sh8t!!!
And if you're not you must know exactly what you're doing...

'Nothing wrong with debt. It can aid returns to equity significantly. Just don't want too much should it risk the company's survival'.
The problem with GKP's debt is that it is so expensive and it's irrelevent to ongoing activity. It's just legacy debt based on old shareholder concerns...11% is DEFINITELY NOT the way forward.
Better to pay it off, if terms allow (and I think they do) then look for a more productive way of spending the $11m in annual interest; or better still leave it in the P&L pending the outcome of the forthcoming FDP review.
It's not like we can't afford it.
In other words, strip out any debt dependency in GKP and leave our negotiating position clean and clear.
So Jon can act accordingly if things don't go his way on the road to 110k bopd.
I think he may be bringing things to a head...and not before time imo.

Officer Figby makes a good point. But then so does krok.
The idea that this is an oligarch getting off on his own reputation, building his business and milking his own Company along the way, while still maintaining his Stock Market credentials, is hard to bear.
But it's not anything we should ignore.

Hi oldholder.
Interesting.
Seems as if someone didn't like my first response to your mail...so be it. I'll try again.
It would be nice to think that there's a greater level of probity as you scale the accounting league structure.
In fact, in my experience, at the highest level you get the most self interest.
As a consequence, the accounting of publicly quoted companies can become more about what is defensible, rather than what is actually happening. The best accountants are like the best lawyers; it's all about who makes the most persuasive argument.
No cynicism, just experience.
Anyway, I digress. What's your view on Enwell going forward as an investment?
Hope this blog makes the trip!

Hi oldholder,
Got ya.
Unfortunately, while you would hope that there was a different scale of accounting probity with the multinationals, my own experience tells me different.
Like the best lawyers, they are paid on their ability to make an argument that, when tested in court, will be persuasive...it has nothing to do with the greater good at all.
Not cynical, just seen it. It's how they make their fees.
Anyway, I digress; what's your position on the future for this stock?

Hi oldholder,
Don't understand.
It was you who pointed out that the auditors were PWC, using it as a counter to Krok's argument concerning 'capex management'.
Have I misunderstood? Apologies if so.

Hi Krok,
I see.
Not a great endorsement of this share investment if your share valuation is wrong, as we have all been before...
I shouldn't be writing like this; my interests are in you being bang on the money!!!
But I can't help thinking that the 83% major shareholder will do what he wants, irrespective of the rest of us.
And if you're right and he takes his money out regularly in other ways, then he will. It's cheaper.
Talk of dividends will be for future investors to evaluate for themselves.
All he's got to do is to keep us interested.
I'm going to stop now; I'm depressing myself!
GLAH.

Oldholder,
Smart energy might have reasons to depress their performance...with intercompany trading this happens all the time. Profits are regularly moved around for tax purposes to support the best possible tax outcome.
That would be an issue for Smart energy and their auditors, not Enwell.
And PWC would eventually have to accept the Directors' position in Smart Energy and Enwell on market trading conditions and whatever plausible reasons they gave for their purchasing/sales arrangements.
Not very palatable, I know.

Hi Krok,
Good post.
So you're holding because we'll get the benefits of what?
On your analysis new investors would have to be crazy.

'JH must be judged against his success executing beyond 55k and not against the mere continuation of JF's plan to 55k.'

JH may decide/have already decided that a plan formulated pre-restructure six or seven years ago is no longer viable, now he's met the challenges for real.
He will, by now, have assessed the commercial/political/financial climate for himself.
It could be that the best way forward has nothing to do with Field expansion and massive re-investment, given what's gone on over the last few years, and the people/circumstances involved.
He's made it clear in the half-year statement what his preference is; he's prepared for re-investment.
He's also made it clear what he's prepared to do unless there is a sea change in the approach of the KRG. Hence the 'interim' extra $50m dividend
In the end he will be measured, not against other plans formulated by previous senior managers (and Jaap Huijskes questionable involvement!).
He will have formulated his own views on that, as we all have.
No. He will be judged against his ability to return maximum shareholder value in these unique circumstances.
And he's earned that opportunity imo, given his actions in the first few months of tenure..

Absolutely got it FH1, nail on the head.
And so much better articulated.

SC