Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
As I write, the sp is sitting @104p. That values GKP @ a paltry £230m. The Fixed Asset register alone is valued @ £463m.
And GKP have no debt.
And they have a self-funding plan to 100k bopd.
Given free rein, they have already established their production credentials to 55k by reference to their own RNS numbers.
Just run those numbers @55k bopd and even $60-70pb under current contractual terms.
No wonder JH is taking care to mothball the business during this difficult time that he cannot properly influence because of the geopolitics involved. The infrastructure is being safeguarded due to defensive capex measures.
Tough job. Top Man.
And don’t even know him. But credit where credit’s due.
Jon Ferrier would never have taken JH’s position. He didn’t have the credentials and was motivated by self interest above all else as far as I can see.
If I’m right, Jon Harris will do what’s in the shareholders’ best interests and press on to 100k bop, all of it self funded.
If I’m wrong, well then I’m going to lose money.
Because I’m about to buy into the sell.
Don’t you love this share?
That's a just cash flow argument.
Whether GKP settle @ three or even six month payments it doesn't matter even though it might inhibit the FDP for a few months.
But GKP MUST get an agreement which guarantees payments for future investment. And that's the hard bit.
Nor does it matter whether GKP retrieve delinquent debt...not in the grand scheme of things though GKP must fight for that $150m.
What matters is what GKP can make by sticking with the self funding plan to 100k bopd.
Just run the numbers over the next few years. It really doesn't matter what realistic oil price you use, on current lifting costs GKPall make a lot of money.
And as shareholders, given JH's dividend policy imperative,
And that's the key.
'Don't want to pay big cost oil amounts? Then don't spend so much on field development capex and be satisfied with limited, if any, production growth.'
Whatever the revisions to the PSC, the critical issue will be cost recovery through reliable cash flow i.e. regular and reliable payments.
Otherwise self funding growth to 100k bopd doesn't work.
The delinquent debt does need to be resolved in the equation, one way or another.
But in the greater scheme of things it's not a critical feature. Just run the numbers to 100k bopd over the next five years and see...
It'll just be part of the negotiation.
However, GKP's position is much stronger i.e. less reliant on Balance Sheet considerations than other APIKUR MEMBERS.
We have no debt.
We are in a good negotiating place though we'll have to take account of other APIKUR MEMBERS' needs...hmm...
Hey P,
The CRP is a ledger and nothing more. Obvious.
The critical issue is one as you've described as 'untimely cost recovery'.
That's JH's job. Nothing more , nothing less.
Big bucks.
But given that, the investment decision is pretty simple.
Do you believe (or do you not) that the management team can hold the line?
Can the strategic plan to self funding growth stand the test?
I say yes.
The CRP is critically predicated on the level of GKP capex, given current contractual terms. Which in turn is predicated on regular and reliable payments for production and then re-investment.
But in essence the whole GKP proposition depends upon GKP investing based on regular payments for self-funding growth.
It’s not a difficult concept, howsoever it will be repositioned in The Brave New World.
JH needs to maintain the GKP model. Albeit on modified terms.
Unfortunately that’s not easy in this climate. But that’s why he gets the big bucks.
Because if you run the numbers, IF JH can maintain that motif and perpetuate a sensible self-funding model then, as shareholders, we’re in the money on almost any rational analysis.
However he needs to hold the GKP strategic line.
Not the UPIKUR line, which is based on individual members’ different financial circumstances and prejudices.
I reckon he gets that.
We’ll see…because in the end the oil will flow.
Hi Solarfire,
Seen the presentation and it tells us nothing we don't already know unfortunately.
Just for Pareto O&G purposes.
The 80/20 rule that means most Companies will contribute in an effort to be a part of the Club.
Doesn't contribute in any way to our understanding of the GKP fundamentals and where it sits in the firmament.
I've made my views clear.
We're good. Just got to navigate the headwinds and that's all.
I reckon JH can do that.
'It's been a good call...'
B0llocks.
Kelty has no real credentials at all. His track demonstrates his abilities.
Grow up PUTUP.
We all know it's a risk share.
Another view other than the terror stream of short-term misery permeating this bb.
Some facts;
1) GKP’s current contractual arrangements are with the KRG and no-one else;
2) GKP have absolutely no influence on regional geopolitics howsoever they present their APIKUR credentials in the region vis their recent absences at keystone meetings;
3) Whatever they say about their contractual position, GKP need to resolve this issue in real time, recognising their need to re-start exporting to make sense of their self-funding development proposition in this Brave New World. Otherwise their plans are f***ed and they’ll have to bail, one way or another;
4) JH has a fiduciary duty to deal with these issues, and he is doing so to the best of his knowledge and abilities, given the constraints of his negotiating position;
5) But one thing’s for sure…the oil will flow. And he knows that too;
6) As for the $150m delinquent debt, it’s a small price to pay for the re-start of GKP’s self-funding plans for growth if that’s necessary. But it MUST be included in any renegotiation, naturally. And good luck with that;
7) But all you’ve got to do is run the numbers on a self-funding planned development to 100k bobd over the next five years to understand the potential rewards for longer term holders.
JH has got to be in that game because GKP are debt free and more than covering their costs. Other APIKUR members not so much. Check it out.
This issue will be resolved by negotiation and GKP will adapt, because the oil will flow. Albeit with changed contractual arrangements that may be more complicated.
In the end it really doesn’t matter much in the grand scheme of things; the oil will flow. And GKP will revive its serious intent to go to the next self-funded production stage up to 100k bopd.
JH knows that too. And what that means Realpolitik.
Serious shareholders are onside with this.
JH must play what’s in front of him…not the other stuff he can’t influence in the geopolitical arena.
Geopolitical bb supposition, while amusing, is inevitably inconsequential. Because nobody knows, least of all us simple minded folk. And certainly not Ashley Kelty.
However the truth is the oil will flow…inevitably.
The terms of engagement are going to change (as I predicted years ago).
And as a debt free business, GKP must pursue its ambition for self-funding growth in a new and more challenging environment.
And if you don’t get that then get out, because otherwise it’s a rough ride.
I love it.
For those penniless trading people, good luck and take your profits when and if you can afford to...in any case, good luck.
But don’t listen to Panmure Gordon and Ashley Kelty’s assessment…just look at his pedigree.
Joined this bb in early 2018 and it was a very difficult introduction into a completely toxic bb experience.
I embrace this new world because it's so less antagonistic...new Team New Dream.
Definitely nothing to do with me!!
But I'm probably bowing out now after five years on this bb...everyone has their own experience of GKP.
Mine's been excellent and that's has less to do with skill and more to do with investing in the fundamentals...not the geopolitics.
For what it's worth, I own a 'significant ' part of this Company and I will hold, maybe increase, but not on the basis of geopolitical schisms.
All I'm looking at is the basic Company set-up (post Restructure) and the current Management determination to see it through.
Don't rely on APIKUR....trust in the GKP management, or sell.
Bye PUTUP., genuinely will miss our exchanges...
The next OpUp is scheduled for w/c 18/12/23...probably 21/12.
Until then we all have to endure the speculation of the speculators.
Dull and as un-informative as ditchwater in the end.
The oil will flow. And the export taps will get turned back on, probably in Q1 2024 (as previously predicted months ago).
And for the initiated well we too easily understand the underlying financial structure of GKP's self-funding proposition.
And its innate commercial strength even in the face of adversity.
So whatever the settlement detail arrived at between the competing geopolitical parties, the critical factor is the strength of GKP's fundamental trading platform position. GKP have a fundamentally different P&L trading and borrowing proposition to their co-members in
'As for the company, They buy nothing. The shares bought are cancelled.'
But what if they're not? what if they're bought back to Treasury as last time by Jaap?
Because you used to argue that Jaap Huijske's buy back TO TREASURY amounted to the same thing!! You used to argue that those purchases fell into the same category i.e. they had no value. That they were simply a return of capital to shareholders.
Classic case of cognitive dissonance.
Don't make me embarrass you by retrieving the detail of our disagreement on this fundamental issue.
Hoist by your own petard P.
So any future GKP buybacks should be for cancellation then?
Yes, of course.
Because otherwise buybacks to Treasury mean that those shares can be re-introduced into the market at some future point i.e. they have an intrinsic value. Which is why buybacks to Treasury are represented as having value in any published accounts.
Well at last/least you've finally seen the light.
If/when GKP buys back its shares they MUST be for cancellation.
On the matter of participation in any buy back FOR CANCELLATION, it's clearly a matter of personal opinion as to the buyback price and whether that proposed price represents under or over valuation of the stock. Obviously.
I reckon GKP need to address some much more pressing issues right now though.
Hope you found the dog of your dreams...presumably it's a 'handbag' mutt with no pedigree whatsoever..
I’m not posting to the traders on this bb.
Good luck and I wish you well. I bought into the dream of self-funding growth to 100k+bopd. And I still do.
Which makes me a ‘lucky’ LTH, i.e. I initially bought in early 2018.
GKP are currently owed $151m in overdue debt by the KRG.
Indeed, in the FH results there was a necessary $14m accounting adjustment required to recognise a ‘provision for impairment of trade receivables’.
That provision will only accelerate over time unless and until that delinquent debt is repaid.
And the KRG can’t pay it.
Most certainly the FGI won’t pay it, because they’re not signatories to those contractual arrangements. I wouldn’t. Would you?
So it’s down to GKP/AKIPUR to negotiate a payment way forward with the KRG. No doubt guided by FGI requirements.
And as it stands, that will inevitably involve a restart to export production coupled with a cast iron payment regime which incorporates additional delinquent debt repayments over production time to anticipated levels. Years then.
And here’s the rub; whatever’s written down in that contract, the FGI now know that GKP/AKIPUR prefer production to litigation.
So what happens next time the cash taps are turned off?
For whatever FGI reason.
Another contractual review?
I’m in and have been for five exciting years.
But this is a seminal moment.
Stick or twist?
Klassic,
Speaking on behalf of PUTUP I would ask/beg you for a little kindness.
The menopause plays with the mind; thought processes can become easily contused; mental agility is compromised at all points. Also there's a shortage of HRT in the global markets right now which doesn't help her in her hour of need!
However, her next dose is imminent and therein lies her salvation.
So please be gentle and cut her some slack.
Take a leaf out of her book. After all, you'll never find her being abusive to other bb contributors and treating them like they're something unpleasant stuck to the bottom of her Louboutins.
She simply needs support at this time.
Frenchchip, off to Paris soon by the way, Jazz in St Germain all the way for me...
I bought in March 2018 in quantity.
After and as a consequence of the Restructure.
And since.
There are two types of LTHs now; the ones who went through massive financial pain after the necessary re-financing; and the investors like me who have enjoyed the benefit.
Always going to be a problem. But all of us have taken risk in a risk share...my view is that GKP can grow and develop. And if I'm right, so will the share price as consequence.
I could be wrong.
Back in...£50k on top of a sh*t load of other buy-ins at a variety of prices.
Thankfully doesn't matter, but pride is a big motivator!!!
Maybe I'm a complete loser.
Time will tell...
Unless I'm a complete Numptie then the fundamentals will out.
That's the bet.
We'll see...