Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Here's the thing.
Whatever else happens over the coming months, the oil will flow.
And eventually there will be a resolution at a geopolitical level.
That can be the only and inevitable outcome.
And the IOCs will have to review their individual positions as a consequence of changed contractual arrangements.
Because that will be the inevitable outcome. The rules of engagement will change.
The problem is each of the IOCs have their own financial constraints.
For debt-free GKP that amounts to some security as to future payment reliability. Simple as that.
But other members are not in the same place. And debt is a burden as an IOC in the region right now. Cos no-one's getting paid.
The big question is whether APIKUR is genuinely committed to the cause of securing agreements as a group of producers.
I suspect that when push comes to shove, each IOC will bow to its own shareholder needs, and that commercially communal spirit will collapse under the weight of real time commercial pressure to restart exports via the pipeline...
One of the many joys of high risk investments.
But where does that take GKP?
It's rock solid, it has no debt and it's sitting on a proven oil field which is capable of producing volumes on a daily basis which other oil companies can only dream of.
And it's recalibrated its performance to deal with the adverse conditions it finds itself in right now.
It also has a plan for self-funding growth. GKP just needs to make sure that it gets paid regularly. It will take care of the rest. That's the only help it needs...to get paid when the money's due and not have to look over its shoulder for the next payment.
Sooner or later, idiots like me are going to pile back in.
The only question is when...
That is a great analysis P.
Of a very complicated position that JH and the Board have to navigate.
Currently I'm of the view that if GKP press on and reach $40k+bobd locally , then there's a new temporary model that works and carries us through the temporary problem until the Grown Ups (acronyms) settle their differences.
in the interim, I can only see I slide in the sp....
Which is not good for my investment plan wrgt GKP.!!!
There was more content, but I can't be bothered...sorry about the 'W'.
Don't worry, I get back to my dissimulation of your ridiculous position.
In fact I don't need to bother...just read the latest P&L and stop theorising for God's sake!!.
You're really struggling with this P&L/Balance Sheet argument that I've made, aren't you PUTUP?
It defeats your technical and motivated diatribe.
Which is, in the end, pointless.
Th numbers are the numbers. And no amount of spin can get away from that.
Which is why you're struggling...
TM,
Try looking at it this way.
The reported Balance Sheet shows GKP being owed $151m.
And a $14m impairment (with consequent P&L impact) set against that unrecovered and delinquent debt in the first half accounts and before.
Meanwhile the Board (to their credit) are successfully mitigating the damage caused by the pipeline shut down.
In fact they've carved out a new way forward despite the pipeline closure, albeit at discounted prices.
In the end, the proof is in the P&L /Balance Sheet pudding.
And the Board's job is to make it as palatable as possible in the circumstances.
That requires cash conservation at all points right now.
And without any receipts for a year, they're doing a decent job on those criteria.
Let's not pay back KRG money that they don't deserve for breaking their contractual obligations. Again.
'Get a grip'.
Please explain to me how detailed knowledge of the half year results and what they mean, is such a problem for you.
You continually rely on the PSC and its construction to validate your arguments.
Unfortunately for you, neither the audited or unaudited accounts reflect your opinions...
That's the problem.
Don't get me wrong PUTUP, it's not that I don't value your technical input. I do.
But it doesn't substitute for resolute management in the theatre of conflict which is where JH finds himself right now.
That is a stupid post.
GKP are owed $151m net as per their half year statement.
Why are you repeating PUTUP'S narrative dictating more PSC detail which has nothing to do with the RNS reported in GKP's own financial assessment?
You know, the one that every shareholder has read. and responded to by their investment decisions.
Accounting fact as opposed to PSC mechanics. and bb manipulation.
As I say, stupid post.
Tell PUTUP to give you more prep and a better brief...
An issue was raised last night that I didn’t deal with. So let’s deal with it now.
I stated that GKP are owed $151m. And i proposed offsetting it against delinquent debt.
PUTUP’s reply was:-
‘Why would they offset something they’re entitled to against something they’re owed?’
And here’s the problem with that response as per the OpUp of 9/8/23 by JH and the Board:-
‘Outstanding receivables of $151 million net are owed to the Company for the months of October 2022 to March 2023 on the basis of the KBT pricing mechanism.’
PUTUP continually conflates the PSC and its operational mechanics with how the PSC is interpreted in the published financial statements. Statements which crucially influence investor opinion.
The simple truth is we are owed $151m NET by the KRG, whatever the reasons.
And GKP have received NO money in the last twelve months from them.
In fact GKP suffered a $14m impairment in their half year results as a consequence of their financial need to recognise that delinquent debt. And that took GKP into a small loss. If they don’t do something about that, the impairment requirement alone will grow until the delinquent debt of $151m is covered in accounting terms. As well as the reduction in GKP’s future bank balance because they don’t receive the money.
So profit compression to offset delinquent debt and consequent and continual impairments as well as reduced FCF. Happy days…future profits are compromised even if we continue on the new trajectory. Good oh…like it wasn’t hard enough as it is.
And that needs dealing with. The simple answer is offset.
Who cares about PSC contractual obligations right now? Certainly not the KRG and the other acronyms. And anyone who continues to play by the rules that the KRG are not recognising is dreaming of a better world.
In Kurdistan? Really?
In general management terms JH MUST stop the cash bleed.
Offset is the way forward even if it is confrontational, (ref. C0ckeye). GKP needs to conserve its cash in these troubled times. And it mustn’t rely on its contractual allies to join in. Because they’re not.
PUTUP is a financial analyst. And a good one. But he relies on that detailed analysis and maybe doesn’t really understand the translation of his analysis into publicly reported financial statements.
Or maybe he does (I think so), but that takes us down a very different posting and motive route.
Because the fact is that the PSC must be translated into accounting language that other investors can understand. And take investment decisions on.
And that has nothing to do with the mechanisms of the PSC.
It’s all about accounting precedents and a common form of reporting financial performance in an understandable format. For ‘informed’ investment purposes.
And I reckon PUTUP knows that.
So GKP are owed $151m. And JH has to come up with a plan to get it back.
All I’m arguing is that offset is a simple remedy.
As long as JH has the