Member Info for Straycat

opulentia,

As far as I'm aware no shareholder approvals are required.

Up c.50% on the deal news….Block have certainly piqued market interest.

PH now needs to manage and direct that interest very carefully, delivering Block’s revised proposition to market armed simply with facts and a strategic clarity for the Company's future.

And no more hyperbole.

This market response to the acquisition is exceptionally positive; it’ll be interesting to see the share register as it develops over the coming months.

Well said Opulentia.

Fuze7,

Ignore him, he's got form.

Good get CCC.

Whatever we may think about the audacity of this cry for help from the KRG, it makes any immediate payment relief for GKP a more distant prospect.
However, we should take solace in this most recent OpUp RNS statement:-

‘At current production levels, the Company covers all operational, general and administrative costs and interest payments with a Brent price of c.$35 per barrel.’

My own analysis suggests that at this price GKP actually makes a small profit, with the true b/e c.$33 per barrel at 38k bopd.

However, that’s not the point.

The real take away is that with its current reserves and operational and financial structure GKP can sustain significantly lower oil prices for several years before the balance sheet begins to truly feel the strain.
Even if the KRG maintain their current blockade of payments for an extended period.

Notwithstanding dividend payments and share buybacks of course.

IMO. DYOR.

Genel’s Full Year Results RNS today were entirely respectable in the current climate.
And yet the share price has made only very modest gains on the day (+3.5%).
All that in the context of an upbeat assessment of current KRG payment attitudes:-

‘ Payments for production in October and November 2019, due in January and February 2020, have not been received. The KRG continues to state the importance of ongoing payments to oil companies and we expect the government to deliver on this promise.’

It’s our turn in a week’s time, with similar 2019 outcomes to Genl and a COVID-19 cloud hanging over the next phase capex developments.

This raises a real live issue which is by no means academic for any GKP believers with funds……where is the share price floor?
Our results next week will be no better than Genl’s, so who’s to say where the floor is?
I would love to know, but we’re not there yet imo.
So I continue to watch and wait….

I posted my own views on McFly’s sickening post over on ADVFN yesterday.
That post was an outrage, one for which he would suffer in open forum.
That’s not going to happen though, ugly cowardly creature that he is.

However, apropos Rhena’s post yesterday, this was posted by BroadfordBay on 31/7/2019, 13.30p.m.:-

‘Yes, I support Oilman and Bigdog on the other board. Why? Because they too have taken an awful lot of sh** over the years from folks like you who seem to post on both boards under alter egos and (this is the most important reason for my support) because they try to deflate the most incredible trashy hype dished out.
Both of these gentlemen respond with great vigor to the rubbish that gets presented there and that vigor (bit like Donald Trump) over time has attained a sharp, cutting edge, so it hurts.’

So BB, Rhena, and the overwhelming majority of right minded posters here have a right to ask about your continued allegiance to this disgrace of a human being.

Given Oilman’s most recent stomach churning posts re Mikey where do you sit?

What’s it gonna be Broadford?
Do you still admire his ‘vigor’ and his ‘sharp cutting edge’?
Or are you prepared to accept that he is out of control?

Your continued silence will tell its own tale about you and your moral code.

Good call Rhena.

Mikey,

Genuine surprise and sorrow at reading your most recent post regarding your health.
You’ve been around this Company and these bbs an awfully long time, unlike me.
And the weight of information and knowledge you’ve passed on has been vital in helping me better understand some of the complexities surrounding the conundrum that is GKP.
So thank I you for that.

I don’t know what the future holds for you Mikey, but I send you all my very best wishes, and I know I won’t be the only one.

Theoryman,

Interesting.

So how do you explain the following:-

‘it has become difficult to ensure that Gulf Keystone has the appropriate drilling personnel and equipment on site in order to continue safe drilling operations. Therefore with the SH-13 well - the current well in the campaign – at a safe stage, a decision has been taken to suspend drilling activities until conditions improve to ensure safe operations.’
The RNS then goes on to say that:-
‘certain construction activities related to the expansion to 55,000 bopd have also been suspended until circumstances improve.’

Theoryman,
Is it your understanding that the Field is still producing?

The GKP Board agenda for several months now will have included an item relating to how to get paid for the oil they’re selling.
And what to do about it now they’re not.
The pressure to come up with an answer will have been building since last December when the MNR declared that August’s and September’s payments would be delayed to January.
With no formal communication from them since. And no more payments since 3/2/2020 either.
Why continue to produce and sell oil at breakeven or a loss when you’re not even getting paid to do it? And you don’t know when the next payment is coming?

The very last thing this Board wants is a repetition of 2015/2016 when non payment was one of the reasons leading to the catastrophic Restructure.
Nor do Lansdowne or Sothic who, as major shareholders, were there then as well.
So if GKP aren’t getting paid and have $70m-$80m of outstanding debt, with some $30m-$35m being delinquent, what do they do about it?
No other oilie in the region has sought to follow suit and stop production…we’re on our own right now.
The facility was running well:-

‘Production rates at the field are at c.38000bopd and production currently continues unaffected by the impact of Coronavirus (COVID-19). However, as a precaution, the Company has restricted the access to its production facilities.’

What if the Board of GKP, in conjunction with other major shareholders, is using COVID-19 as an excuse to stop production and pressure the MNR for a return to normal payment terms?
And what better time to do it when oil prices are in the dirt and GKP would be producing at a loss if it ran its facility now anyway?

Why produce and sell oil at a loss when you’re not getting paid?

MOTHBALLS.

So GKP have shut up shop, and goodbye short term production targets.

But remember:-
1) They have £159m in the bank on which they’ll be making ca $200k a month in interest;
2) They are owed another $100m+ covering the last five months activity. This is now a collection imperative;
3) There is no other debt apart from the need to service the $100m loan facility, which is less than $1m a month;
4) The wage bill in 2018 was $29m, or $2.5m a month to keep the business ready for its return to production.

Put simply this can go on for a very long time before GKP show any signs of financial distress….how many other oilers can say that?

But they must now collect that overdue debt and press for the rest as it becomes due.

And watch the market meltdown.

Forget the dividend, but watch out for further buyback authority requests imo.

As long as the MNR keep paying GKP will keep buying….at these prices why not?
I bet there isn’t a shareholder here with any spare cash who isn’t contemplating another binge.
I know I am, because 26/3/2020 is starting to look like a good day for a rerate if the news is as it could be.
Just trying to work out where/when the bottom is.
A week before the publication of the full year results on 26/3/2020 is my current best guess.
We’re still on for 8% in treasury by the end of next week and I’m still forecasting another buyback authority request shortly after that.

If:-
1) current commercial trading terms are maintained;
2) production targets are met;
3) notwithstanding a complete collapse in the price of oil; and
4) continued shareholder support for the spend,
then any/all cash flow forecasts predict that the Board can sustain their buyback programme for as long as they wish to, or as much as Company law will allow (Special Resolution 13 passed at the last AGM saw to that).

As of last night there were 16.7m shares in treasury representing 7.3% of GKP’s issued share capital.
And at current run rates, with $3.5m left to spend in this final buyback phase, there will be approximately 18m shares in treasury, or 8% of the issued stock, by the end of March.
Just as GKP publish their full year accounts.

Given the favourable current buying conditions, if the Board were to seek and obtain further buyback approvals, the next $50m authorisation likely results in another 18m shares repurchased into treasury or another 8% of the issued stock.
Of course this would depend on the number of vested staff share options released in the period.
$150m and a few shareholder approvals later GKP could have bought back close on 30% of its own shares.
And the cash flows suggest that this could be achieved within the next eighteen months.
Moreover, you can change the above parameters any way you want and nevertheless GKP will be able to afford this share grab to 69m shares, or 30%, if that’s the plan.
Because there’s definitely a serious motive behind this Board’s current behaviour. In the last eight months they’ve become GKP’s third largest shareholder ahead of Hof Hoorneman who have 16,130,145 shares (see note 1), and quickly catching Lansdowne and Sothic.

It’s got to be worth considering whether triggering a takeover bid is on this Board’s agenda.

Now that would be a plan.

Note 1: the GKP website’s ‘Shareholder Analysis’ is incorrect. It uses 216,221,787 as the figure for common shares in issue whereas in fact there are 229,429,566 shares in issue INCLUDING the shares held in treasury.
This is reflected, for example, in last night’s repurchase RNS which stated:-
‘the Company’s issued share capital consists of 212,705,079 common shares plus 16,724,487 common shares held in Treasury.’

ALL IMO. DYOR.

Well if we don’t take advantage of this market trauma then we’ve only ourselves to blame.

I posted on Friday why I thought GKP should/must ask for further buyback authorisations at or before the upcoming AGM.
And I’ve explained why imo.
The response was muted.
Only one poster made reference to the unrequired debt and a preference for paying it back and saving the P&L c.a.$11m a year.
Actually his/her exact words were:-
‘This useless, self-serving, lying Bod should be getting rid of the debt instead of this fruitless hairbrain buyback scheme.’
I share these sentiments I just think buyback is a better spend of surplus cash right now with the markets in such turmoil.

Anyway….

Whether you approve of this buyback policy or not, can anyone think of any sensible reason why the Board shouldn’t get on with this aggressive form of self-cannibalism?
Because unless they’ve got a fixed predetermined quantity they want/need back in treasury, or they run light on funds, then why would they stop right now?
Tell me.

Hi BD,

Staff share options aside, if GKP did cancel the unrequired shares at the AGM, there would be a paper loss of up to $50m.
But that’s it imo.
Everything else is already accounted for in the figures, primarily up to the $50m cash paid for that stock sat in treasury.
And in fact there may well be an argument for creating a ‘Goodwill’ element in the Balance Sheet under ‘Intangible Assets’ to literally balance the books.
Either way the cancellation of treasury shares should have had no practical impact on the Company whatsoever except to concentrate shareholder value as and when the new share base at c.a.210m shares is recognised for what it is.

But taking out 9% of the stock for good at a single stroke…what would that do for the share price?
Given the basic economic theories of Supply and Demand that’s anyone’s guess. It’s definitely not a bad thing.

Anyway, I see the buyback as one means for the Board to start ‘taking back control’ to use an overworked Brexit phrase,
and as such I welcome any further buyback initiatives, but to cancel preferably.

All imo.

Thanks for that AJ.

'good news days'.....

We could do with one of those but I'll be sticking around for a while now anyway.

I note that on 26/6/2019 the Company announced its change of accounting reference date resulting in fully audited eighteen
month accounts being released on 30/4/2020.
Watching PH review Amati shareholding activity on 21/2/2020 he suggested that OpUp(s) would be available ‘in due course’ and ‘pretty soon’.
On that basis I have added to my stake today as an exercise in avco, but does anyone have any clue as to when this/these updates will occur?