Member Info for Straycat

C0ckeye,
I’m delighted that GKP have given up some much sought after operational insight.
The production uplifts already achieved will transform the P&L and Balance sheet of the Company in short order. And that’s at 42kbpod.
Assuming regular payments from the MNR the further planned capex activity is a self fulfilling prophesy.
Also, given the weight of capex bearing down on the bank balances (as planned), our current cash position remains robust with two further payments due before the year end.
As to your specific question-
‘how many of your list of questions did this mornings announcement answer?’
Points 10) and 12) were answered in part.
I did anticipate further buyback activity because of the unanimous voting support (99.67%) for the general authority given by the shareholders to the Board under Special Resolution 13(b) at the AGM.
I just didn’t know why or when.
So I was surprised at a commencement date so close to the year end.
I still don’t know why it was thought necessary.

As for the share price, that will inevitably conform to reflect our changing fortunes.
When I get time I’m going to look at what even the movement to 42bopd-43bopd does to our revenues, profits, and cash performance on an annualised basis.
I think we’re all going to be surprised at what that uplift means in real terms…..

Yes, but those cash balances include c.a.$90m in 2nd half capex spend.

Edit. $275m s/b $245m.

$206m cash @9/12/2019 + August and September invoices to be paid before y/e = c.a. $275m year end cash balances if paid.

Outstanding.

There are too many questions and not enough (=no) answers.

At the risk of courting controversy and abuse in equal measure, nevertheless it’s still worth pointing out that if GKP were sold in principle awaiting technical sign off, the following would all be explained:-
1) The awards of millions more nil cost options to JF and SZ on 1/5/2019 only two months after the Board had announced that no further option awards were envisaged;
2) The requirement for buy back authority in May to satisfy the vesting of staff share option plans only a few weeks after SZ had denied the possibility of buy back during Q&As at the Capital Events Day;
3) That buyback authority request being sought years before the staff options were due to vest naturally;
4) That otherwise extraordinarily expensive $100m stand by facility to be drawn down in the event that any buy back might cost more than envisaged;
5) Sami’s unexplained departure with an effective date in early December without any care for Year End accounting procedures;
6) The share price resilience on the news of Sami’s leaving the Company;
7) The application of dividends to treasury shares ;
8) The delays in FPD approvals following resubmission over six months ago;
9) The absence of any updated CPR;
10) The delays in operational deadlines to 55k bopd;
11) The remarkable II perseverance with the underperformance of the Company and its share price;
12) The complete operational information ‘lock down’ for the last three months;
13) The appointment of an obscure low level accountant to oversee a major capital expenditure development;
14) The absence of option shares in Ian Weatherdon’s offer package;
15) The delay in his start date to mid January 2020;
16) The apparent lack of any senior financial year end oversight.
17) The non payment of August invoices.
And there may well be other pointers I have missed.

Of course, such an explanation involves an acceptance that such a sale has to have been in the making for some considerable time.

But equally it could be that there are other interpretations of the above events.

For example, it could just be that GKP are doing exactly what they have set out to do and are simply suffering the vagaries of operational difficulties faced on the ground, and the management **** ups when implementing the Company's newly defined corporate initiatives coming out of the Boardroom.
But one thing’s for sure……if that is the case then there’s a desperate need for more transparency if they’re going to get on and develop their organic growth plan unquestioned.

ALL IMO. DYOR.

C0ckeye,
So what's in it for the IIs then?
They were there before the announcement of the dividend initiative and still they remain.
Why?

tom,
I'm right in saying they were all on the Register before the Dividend initiative was launched in March 2019?
If so, I've no idea why they would hang around for this painful experience as it plays out before our very eyes.

Unless.....

Only 12 trading days to year end and these FACTS require explanation-

Complete GKP lock down on shareholder information;
No Ops Updates for 3 months despite the major ongoing activity in the Field and admitted delays;
Majorly overdue cash receipts way out of line with this year's payment model;
No CFO leadership at a critical time;
No new share option incentive plans for employees;
Treasury shares in place to 'satisfy the vesting of staff option plans' years before time (and dividend attributed);

Coincidences?

Maybe.

Explanations?

None.

On 18/11/2019 Alliance News reported the appointment of Ian Weatherdon and his start date as follows:-

‘Weatherdon is expected to take up the role in the new year, on January 13, but Zouari will assist Weatherdon for a short handover period, the company said.’

This conforms to my understanding of the appointment RNS and Weatherdon’s start date.
And I may be wrong.
But if I’m right then on the face of it this interpretation means there is no senior oversight for the year end cut offs which are so crucial to the compilation of meaningful audited accounts for the full year 2019.
The negative consequences of any such omission cannot be overstated.
The CFO is the senior executive responsible for the financial conduct of the company.
And among his many duties some of the most pivotal concern the preparation of the Full Year Accounts.
This is necessary so that the audited accounts represent a true and fair view of the financial affairs of GKP free from material misstatements, faithfully representing the financial performance and position of the Company.
To this end I reckon GKP have a duty to ensure that the CFO transition period is seamless in so far as it pertains to the assembly, preparation and production of the financial affairs of the Company.
Pivotal to all this are the cut off points and ledger postings used at the year end.
Sure the CIMA qualified ‘grunts’ will do the donkey work, but who is the final arbiter of any disputes over cut offs, inclusions and exclusions, ledger contents and a whole bunch of other discretionary financial matters?
The CFO.
I am not a qualified accountant. But I have been around talented ACA qualified Financial Directors for a good part of my working life. And in all that time I have never come across a situation where a company has gone into the year end run without senior internal financial governance.
And particularly this year of all years, with so much capex investment money to account for.
Worse, the Board had seven months’ notice of Sami’s intention to leave.

And yet here we are.

I’ve said it before, but it seems to me there’s something seriously wrong here.

ALL IMO. DYOR.

2019 Shaikan Payment Update:-

21/1/2019 - $22.9m – 22 working days following previous payment.
1/3/2019 - $15.9m – 29 working days…………
19/3/2019 - $$11.7m – 12 working days……..
26/4/2019 - $11.5m – 25 working days……..
12/6/2019 - $$10.7m – 31 working days……….
28/6/2019 - $17.0m – 12 working days…….
6/8/2019 - $18.0m – 27 working days…….
28/8/2019 - $20.0m – 15 working days…….
19/9/2019 - $11.0m – 16 working days……
16/10/2019 $16.8m – 19 working days……….
5/12/2019 $0.0m – 36 working days or 7 weeks and counting………..

Anyone seen a CFO anywhere?
I’m sure we used to have one, but I can’t seem to find him right now….
Coincidence? Maybe.
Couldn’t come at a worse time though could it?

And in the same vein;
the last time we had an operational update was at the beginning of September, and that only came under the auspices of the Half Year Results.
Why can’t we know whether the PF-1 pipeline and export station have been completed and commissioned?
Has SH-12 gone into full production?
What is our bopd now?
How is the capex spend progressing?
What news on the FDP re-submission?
Why was the dividend plan constructed in such a way that it allowed GKP to change the Common Share base without it affecting the cash sum paid? Why not a dividend per share?
Why have we paid a dividend on treasury shares?
Where’s the payment for August sales?

On 1/5/2019 within 18 short working days of the Capital Markets Day presentation, Sami was awarded another 1,565,817 nil cost options. This in itself was surprising since on 28/2/2019, announcing the 2018 full year results, the Board had stated that under the VCP-
‘No further awards of Performance Units are envisaged.’
Later that month, on 23/5/2019, Jaap Huijskes sought authority to begin buying back shares into treasury to ‘satisfy the vesting of staff option plans’.
He needed to because there weren’t enough in treasury to cover SZ’s and JF’s new entitlements.
Then, 5 days after that, Sami’s unexplained departure was announced.

Conspiracy theories abound, and is anyone really surprised?

A simple two line explanation for Sami’s departure would have avoided all of this and so much more.

What is wrong with us knowing why he left, as is the norm?

There’s something really wrong about all this.

ALL IMO. DYOR.

Edit on 2nd half 2019 estimated revenues:-
$145m-$150m s/b $120m-$125m
Apologies.

First Half results for 2019 presented as:-

Revenue - $95.6m
Profits - $24.2m (after the $5.2m interest payment on unutilised $100m loan facility)
Net Assets - $527.8m (of which cash $302.7m)
BOPD - 29.3k

This suggests second half headline figures in the range of:-
Revenue - $145m-$150m
Profits – $0m-$5m (after $50m dividend payment, $25m buyback and the waste of money that is the interest on that loan)
Net Assets - $510m-$515m (including $80m second half capex and the dividend and buyback spends).
BOPD – July @29.3k, then average 40k through year end, poo comparable to first half.

All this in the midst of massive production upheaval during the initial phase 1 this year.

Today, the market cap is £457m or $590m.
Yet within four weeks our net assets will be just 10% under that market valuation and:
1) Monthly production will be up 25% on prior year (minimum);
2) Over 40% of our net asset value will be sat in the bank;
3) We’re right on track to nearly double our 2018 bopd actuals within six months;
4) The self funding capex rolls relentlessly on to 75k without FPD approval;
5) The Company has engaged in a very aggressive dividend policy which it fully intends to repeat next year, poo and cash flow permitting;
6) It has secured the future benefits of its key employees by reference to its buyback initiative;
7) A new CFO is now in place to oversee the cash resource of the Company during the development phases.

And the market response – nothing.

None of this makes sense to me.
I recognise the ‘wait and see’ argument that the price will move with the increases in production but it’s not happening is it? We’ve been banging out 40k bopd for months (it even admits as much on the GKP website) and the sp hasn’t responded at all.

Nor will it if nobody knows.
So all we’re left with is the hope that JF understands our frustrations and responds accordingly.
But he won’t, because if he did he’d have done something about it already.
After all, what a story there is to tell. So why isn’t he telling it? It’s as if he were being gagged.

Lack of information has only ever led to speculation, and GKP seems to go out of its way to garner it.

ALL IMO. DYOR.

Couple of good posts there ss.
Just demonstrates what a complete paradox GKP is.
Historically you appeared to be more accommodating of JF’s management style and approach, but lately you seem to be taking a more critical line.
Any particular reason (other than his silent running communication skills!)?

And where's that payment?
Like FH1 posted, how many CFOs does it take to collect the (over)due debt?

‘Straycat, there is nothing in that quote that implies the company were unable to publish their internal review.’

That’s right.
But they didn’t publish it did they?

I have a problem with the paucity of information coming out of GKP, so some time ago I sought out company guidelines outlining which events might warrant the use of an RNS as a tool for shareholder information.
And one of the tests posited was whether the information might be material to the valuation of the company.
If that’s right, then surely the results of an internal valuation would fall into that category.
Sure, there might be other considerations like the partiality of the work, but if that were the case then why go to the trouble of mentioning it in the operational highlights?

I really don’t get their PR policies.

From the 2018 Full Year Results operational highlights:-

‘GKP internal review indicates an upgrade in Proven (1P) reserves and no material changes to Probable reserves (2P). A revised Competent Person's Report to be released following FDP approval’

I’m sure this will have been covered before, but can someone explain why the release of that internal review is contingent upon FDP approval?

ANGINA,

Whether GKP were correct to attribute dividends to treasury shares is pivotal in assessing whether the Company is more or less likely to have been sold imo.

Can't argue that it's dull as ditch though....

Theoryman,

I'll have to work through it, but that looks like a very thoughtful resolution to our conundrum.
It would help explain why GKP might think they are acting within Company law by attributing dividends to treasury shares.

And it would certainly satisfy my curiosity as to whether GKP are acting within the legal framework or not.

But that would mean that those bonus shares would be fully paid up, right?

Theoryman,

‘the clause is there to cover a situation when a general bonus offer is distributed - that was the only type of distribution I came across.’

I don’t see that. This is not a general distribution by GKP.

Section 42B(12) is there to make treasury shares more adaptable in their application for company purposes, and GKP are using it to achieve their particular end.
The Act specifically allows the company to make
‘an allotment of treasury shares as fully paid up bonus shares in respect of shares held by the company as treasury shares;’

This means that GKP can look again at the shares they already hold in treasury and allot (recreate) them as fully paid up bonus shares without the need for a general bonus distribution of extra shares.
This means that they must have a value placed on them ahead of time. It also ensures that those staff share options are in place to honour contractual commitments on sale. And it means that a dividend is then attributable to them because of their reclassification under 42B(12).

Your interpretation of Section 42B(12) imputes a meaning to the words which is nowhere reflected in the text.
It seems to me that the Section clearly enables GKP to create fully paid up bonus shares out of those treasury shares already sitting in treasury.
This is because they are not the subject of a general distribution to all shareholders. They have already been bought back into treasury out of Common Stock.
Now they are effectively being (re)created in the form of fully paid up bonus shares that still sit in treasury, but to which a dividend is now attributable because of their new personae.

ALL IMO. DYOR.

Theoryman,

Your post makes me smile for all the right reasons.

We are both demonstrating, without any effort whatsoever, how opaque, how subtle, and how impenetrable the actions of GKP are in relation to this matter.
And these are difficult issues which are also pivotal in any assessment of what’s really going on in the Company right now.
But if I follow you correctly then you’re arguing that IF there had been a general award of bonus shares to all shareholders then more treasury shares would have been needed to make those general awards.
However, since there wasn’t a general award of bonus shares to all shareholders (the bonus only applies to those shares already held in treasury) then it follows that there is no requirement to issue extra treasury shares.
And on that basis GKP have behaved entirely in accordance with Bermudan Company law and there is no need for them to correct their behaviour.
Which is what I’m saying.
And if all of that’s right, then those treasury shares would have morphed into fully paid up bonus shares with all the fully intended consequences that brings prior to sale.

ALL IMO. DYOR.