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GKP reported 2019 profits at $49m on sales of $206m.
Yet net assets are showing at $520m, down $33m on the prior year.
This is in part due to the fact that GKP paid out $49.1m in dividends, effectively wiping out 2019 profits and degrading the Balance Sheet in the process.

And in 2020 the Company has given itself another mountain to climb.
There are currently 19,059,064 shares sat in Treasury. At the AGM it was announced that the Company has now resolved to cancel all but 1m of these.
I estimate the cost of this cancellation exercise at c.$45m given that the year end vwap was $2.86 on 10.5m shares(including the 82k nil cost options vested in the year), and a further c.9.4m which were purchased in 2020 @ a $ converted vwap of $2.32.
All off the bottom line. Half way through 2020 and the full year trading performance is already compromised by this latest resolution to cancel, assuming the Board takes the full hit in 2020.
And the treatment of the write off is irrelevant. Whether the auditors are convinced that it’s an exceptional item or not, nevertheless that’s hard earned cash out of the bank and into the bin with no tangible benefits accruing.
So, unless there is a dramatic improvement in poo, GKP are staring down the barrel of another breakeven year at best, and that without taking into consideration any plans for further dividend initiatives they might contemplate, which can only be paid out of profits anyway.
Meanwhile the Board have also resolved to spend more precious cash on share buybacks to treasury, up to 23m shares in principle, while junking 18m they already have and don’t need, sacrificing the P&L for the year in the process.
This with unanimous shareholder approval.

It’s almost as if P&L performance is no longer the name of the game. As if it doesn’t matter.

You couldn’t make this sh*t up.

Unless it’s part of a greater plan. Let’s hope so.

All IMO. DYOR.

So Ferrier and Huijskes have lost the confidence of nearly a third of GKP’s shareholders. That is a BIG DEAL. Now the Board (JH and JF) will have to go cap in hand to those dissenting shareholders and beg for clemency.
At the same time, GKP’s second largest shareholder, Lansdowne has had one of their own co-opted onto the Board, such is their level of disquiet:-
‘Garret Soden has to be welcomed back to the GKP Board as a Non-Independent Non-Executive Director representing funds managed by Lansdowne Partners Austria.’
This despite being removed by GKP last year as a NED because he had too many jobs.
Well the clue is in his title as now being ‘Non-Independent.’
How serious are those major shareholder concerns that they are driven to this action?
Neither should it go unnoticed that nearly a third (probably the same third) of voting shareholders demurred from the Directors Remuneration Report (look out Kimberley). This is clearly an expression of dissent in the pay awards meted out generally, and a blatant vote of no confidence in Huijskes’s and Ferrier’s remuneration in particular.
And now, on top of all that, the Board (JH/JF) are going to cancel all those unwanted treasury shares, 18m of them.
Because only now do they recognise they only ever needed a couple or three million for vesting purposes.
What a load of tosh.
If they know now how many shares are needed for vesting purposes, then they obviously knew when they embarked on the buy back initiative last year.
And yet they bought 18m more than required.
Why? And why to treasury and not to cancel, when they would have likely accelerated sp performance?
That moment’s probably gone for now, because the belated decision to cancel is far too late in the trading cycle.
This is either incredibly inept resource management, or part of a share price suppression strategy.
A terrific way to reduce the shares in circulation for good without hiking the sp in an extraordinarily and ridiculously undervalued share.
What a crock.

SACK FERRIER AND HUIJSKES.

NOW.

IMO. DYOR.

As per yesterday’s TR1 release:-
‘Sothic Capital Management LLP has changed its name to Astaris Capital Management LLP and that Sothic Capital Management (Cayman) Ltd has changed its name to Astaris Capital Management (Cayman) Ltd.’
Put as simply as possible:-
1) Sothic changed its name five months ago on 14/11 2019 to Astaris. GKP’s website really needs to try and keep up, UNLESS its deliberately obfuscating;
2) Astaris LLP’s (formerly Sothic) parent company is its Cayman affiliate, Astaris Capital Management (Cayman) Ltd;
3) That Cayman affiliate is owned by Gertman Koomen;
4) Gertman Koomen is also Managing Partner and Senior Investment Officer in Astaris LLP as he was before at Sothic;
5) As the owner of the ultimate holding company Astaris (Cayman) Ltd, GK owns all the assets of his subsidiaries (current net worth £7.2m) AND is responsible for his investors interests in GKP as Senior Investment Officer.
His Companies are now the biggest shareholders in GKP, either in their own right or on behalf of their investors,
AND:-
‘Mr Koomen and Astaris Capital Management LLP are therefore making an aggregate disclosure of their joint holdings.’

We got lucky. He’s been outed because of UK disclosure requirements which kicked in because of his need/desire to change Sothic’s name.

We now have the name of the man with the biggest direct and/or indirect investment in our beloved GKP.

Though not recorded on GKP’s website yet, Koomen’s companies hold directly or indirectly 15.57% of GKP or just under 33m shares. (When they get round to it, GKP will probably rename their largest shareholder as Astaris Management LLP. I wonder why they haven't done it already?).

Until he took the decision to name change,Koomen was invisible to us.

And he’s been Managing Partner of Sothic since 2009, before its name change, so he is bound to have a view on the GKP shareholding performance since Restructure.

Astaris LLP’s address is:-
One Knightsbridge Green
Sothic Capital Management
SW1X 7QA.

Perhaps one of you would like to ask his opinion as to the quality of his investment?

ALL IMO. DYOR.

Given their respective investments in Block Energy as private investors, you’d be forgiven for wondering what Alastair Ferguson (with 5.2%) and Jon Fitzpatrick (3.3%) were up to.
Because they are also Directors and shareholders in Solo Oil, AF as Executive Chairman with a 2.66% stake and JF as Non Executive Director with 4.15%.
Solo’s new strategic purpose was articulated in a March 2019 corporate presentation as being to :-
‘Assemble a balanced, full lifecycle portfolio comprised of production and development assets that provide a sustainable path for growth alongside funded G&A.’
The vision was declared to:-
‘Achieve scale through inorganic growth with a net production target of at least 5,000 boepd [per acquisition] within the next three years.’
So how’s it doing?
In his H1 2019 interim statement AF informed us Solo:-
(a) Was actively screening acquisition opportunities in Europe and North Africa with a net production target of at least 5000 boepd within three years;
(b) ‘Commence[d] a highly active period of screening opportunities (c.20) in line with strategic objectives – the Board has taken 5 identified opportunities through due diligence and carried 3 through to detailed negotiation’;
(c) Begun monetising non core assets;
(d) Been recruiting to the new strategic need;
So far so good.
On 9/10/2019 Solo announced that it had:-
‘entered into a binding sales and purchasing agreement (“SPA”) with ONE-Dyas B.V. (“ONE-Dyas”) to acquire a package of non-operated interests in natural gas fields from ONE-Dyas in the Dutch sector of the North Sea…’
The consideration was an upfront payment of 30.1m euros with a further 2m euros payable when first gas was struck post acquisition.
It had raised the cash through a combination of a debt facility with Mercuria Energy, existing resources and ‘new equity’.
But within five months the deal was sunk, scuppered by poor European gas prices, higher than estimated production and capex costs, Brexit and the U.K. elections.

Financially in H1 2019, the Company lost £800k on the back of losses of £1.7m in 2018. Notwithstanding further asset sales these losses will continue.
Nevertheless Solo appears to be in very strong financial shape.
It still has a solid balance sheet with net assets at c.£21m, backed by £2m-£3m in the bank and no material debt.
Also it values its non operating 25% interest in Ruvuma PSC (Tanzania) alone at c.£19m though this does not appear to be reflected in the unaudited accounts.
Finally the failed bid for ONE-Dyas assets proved that it can raise acquisition funding if required.

IF Block is a viable production proposition AND in need of further external finance then Solo MIGHT provide an opportunity for both Companies to benefit from each others’ predicaments…….but could that deal ever get done?

Given their exposure, I can think of two people who have every interest in seeing it happen, if viable.

IMO…DYOR.

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