Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
This is simply a negotiating tool that Erdogan is playing out.
Turkey don't want to pay the $1.5bn fine...obviously.
They certainly don't want more litigation in the USA which may well work against their best interests.
And they've weaponised the pipeline as sanction of their own to put pressure on the ICG for change.
Simply a negotiating tool.
And it will work, whatever the short term consequences to their local/national economics.
And whatever the consequences for IOC's.
But sit where GKP are for a moment.
The Board are attempting to navigate a minefield not of their making.
They have little/no influence of the power-play going on.
And they're doing that as best they can as far as I can tell.
But they have to try and protect our best interests.
And I think they are.
For what it's worth, when I reckon the sp has settled, I'm in.
Btw I'm already properly in!!
Q1 2024 is my estimate as to when normal service is resumed...
I can't believe there are many investors, PIs or institutions that are not suffering right now..
Unless they bought a sh8tload of shares during the (unnecessary) Covid panic. As I did.
And even then, if they've topped up as a consequence of the inevitable sp improvement post Covid (as I did) then there's inevitable pain to bear. Even if it's only lost paper profits.
But let no-one forget the return of capital to shareholders via dividends (and let's forget the debacle of the rigged share buyback!).
We've all been surprised/stunned by the pipe closure. Including the Board.
It's time to put your big boy pants on if you believe in the future for a modified GKP.
Or it's time to sell up and lick your wounds.
Either way the oil will definitely flow.
Armas,
PUTUP's comments are right.
And you're not the only one with serious 'skin' in this.
But Swell3216 is right as well; if you didn't appreciate what you were doing then you shouldn't have done it. First time out or subsequently.
Bit rich that you're now coming back to the bb complaining, whining and blaming geopolitics, the complicated history of GKP, and the suggestions of other bb contributors who do not share your view and have a different view of the outcome.
It's a risk share.
Just live with that knowledge.
And the fact that you might lose even more money that you can afford to lose (maybe).
You just seem to be doing a lot of whining...
‘It isn’t at all assured, however, that it [the oil] will flow for GKP in its current form.’
I don’t understand this phraseology:-
1) Are you questioning the possible ongoing form of transport i.e. pipe/truck/or even some horrific combo?;
2) Are you considering that there will almost certainly have to be significant changes to GKP’s contractual arrangements involving KRG/ICG/MNR/SOMO/AKIPUR (and any other acronyms you can think of with an interest in the outcome!);
3) Or are you referencing the possible need for financial and management restructuring within GKP to accommodate the changing circumstances as they develop?
4) Or maybe all of the above.
I am.
But the oil will flow.
‘if we are lucky export sales will restart before year end but I wouldn’t at all be surprised if this situation drags on into 2024.’
I’ve already expressed the opinion that export sales will be delayed until Q1 2024. Because of the complexity of the negotiations, given the competing ambitions of the geopoliticians.
And then there's AKIPUR who've defined (to some extent) their expectations before the resumption of exports. Guaranteed payments being at the top of their list.
But the oil will flow.
‘That’s been the case since June. Why do you keep believing las if this is something new.’
That’s easy. There’s a lot of gloom and doom being expressed on this bb right now. And with some justification. But there are some bb contributors who have very little faith in the Board, even though they are, to a man/woman making their own commitment to the cause. Gentle reminder, that’s all.
‘…if local sales stutter and the pipeline remains closed it’s [a placing] a real possibility.’
That view is posited on the very worst case scenario and also involves a serious cash drain which cannot be recovered by the Board because there’s little/no revenue for an extended period. Certainly twelve months. Meanwhile the Board are suggesting a ramping of truck driven production to 40k bopd. Even now they’ve ramped up to 23k.
JH stated in the H/Y Report:-
• While there appears to be significant local demand for Shaikan Field crude, volumes and prices are difficult to predict
• If sustainable local sales do not materialise and absent [of] other revenue sources GKP would take further actions to preserve liquidity
• GKP would also consider additional sources of liquidity as necessary including external financing
JH is NOT saying that’s part of his current plan. Quite the reverse.
But he has a reporting duty to his shareholders, as do the rest of the Board, to include any Company threats that should be recognised as material to the ongoing performance of GKP.
For the Nerds amongst us, it’s listed under Principal Risks and Uncertainties in the H/Y Report. And that section states what those risks and uncertainties are. The Board have a principal duty to cover that ground so that BDO LLP and the shareholders ar
I guarantee you, if you're sat in GKP's boardroom right now 'patience' will be that last item on the Agenda!!
Added by some tragic young attaché who wasn't listening/understanding.
And if it did appear at the bottom of the document as a default, it would be laughed off as a sick joke!!!!
Urgency is the matter consuming the Board right now.
How to secure the next period of production uncertainty by reference to trucked sales. And how to make the most money out of it while protecting the asset from neglect/harm.
Sales, margin, logistics and cost control will be all consuming...I hope.
FH1's assessment is absolutely correct.
Right now there is no prospect of more funding need to support current performance.
Just run the numbers.
And if that changes, it would demand a catastrophic adjustment in trading circumstances on the ground.
In simple Balance Sheet terms, the current position is stabilised for now.
No problem.
And trucking up to 40k bopd is only going to develop GKP's stability.
So here's the thing.
As a Board, they simply have to play what's in front of them.
I feel like I'm banging a drum because I keep repeating the same mantra.
But we should take it easy for now and trust in the Board to keep their nerve and develop their current position.
Guys like PUTUP are in danger of panicking; he doesn't get that the oil will flow.
One thing's for sure. The oil will flow.
And if you have confidence in the Board, they will manage it on our behalf.
Particularly since they're now financially invested by their 20% salary deferments...
Tough times, but as I say, the oil will definitely flow.
ValueS,
I get the present direction of travel, as tenuous as it is.
I'm taking a position based on the sales possibilities, which are uncertain.
GKP can, to some extent, contain the costs.
The selling opportunities are a very different challenge.
Both the local interest in buying, and, much more importantly, the short term margins.
Why would we give back capital to shareholders right now when it may well be needed to shore up the Balance Sheet?
Unless you think the business is failed and you just want out...
ValueS,
Let's repair the Balance Sheet first.
Put ourselves on the front foot again.
We took a lot of money in dividends when capital redistributions were on offer.
Let's dig in and hold (or sell, or buy!!).
In any case, now's not the time for any more redistributions of capital, surely?
hi c0ckeye,
so missed, so loved (but not in a *** way!).
so how do you read the future trajectory for gkp?
you've been around the block and seen all this before in gkp's history, by which i mean the excitement surrounding gkp's extraordinary and sometimes traumatic history.
don't want to engage in geopolitical theory. dull.
interested in your thoughts on the current business platform. and how you reckon it will play out.
'I'd expect all hell to break loose'.
What would that hell look like?
Why wouldn't JH keep the cash as an offset?
Perfectly within his remit.
His duty is to his shareholders, not the KRG.
It makes perfect sense.
R,
I can't even express my share dealing mistakes.
They still hurt and there's so many of them...
For me the issue with GKP is in the fundamentals.
$80+ m in the bank, no debt, available sales avenues (albeit at a significant discount), extraordinarily low oil recovery costs and a willing Board who are prepared to put their money on the line pro-tem.
And sooner or later the tap will be turned on.
Meanwhile GKP can tread water in P&L terms while managing its cash reserves for at least twelve months (probably more).
The share price is a side show right now unless you're a Trader, in which case good luck because you probably won't understand or care about the fundamentals anyway.
'Patience is required'.
When did rogthegamer invest in GKP and why?
This has always been a high risk investment.
Part of its attraction.
And you must have known that if you did due diligence...
Why are we worried about the Market valuation of the Company right now?
It's irrelevant.
What matters is what the Board are doing to deal with the current challenges.
I reckon they should be about intensive cost control and serious sales development.
The structure of GKP is based on low costs and cheap sales (i.e. what the KRG allowed under the contract).
That's the underlying premise of the PSC.
When I bought in, all sales were via trucks. The pipeline happened later. And saved GKP money.
But without the pipeline and even given the discounted prices for selling oil locally, GKP MUST keep selling oil.
Because its cost base is so small and, as far as I can see, it will continue to make money until the tap's turned back on. Just not as much.
Got to keep an eye on the FCF which is all about cash collection and supplier management..
Not hard to do.
Just sell the product. There'll always be a market for it.
It's not like trying to parasols in the Antarctic...
But the oil will flow.
P,
Almost everyone on this bb, in fact most PI's, are taking an absolute caning right now.
So the judgment ends up being buy/sell/hold.
For me the fundamentals are an essential element of that decision.
Because one thing's for sure; the oil will flow.
The issue is how the Board manage this pivotal point in GKP's extraordinary journey.
The fact that they've sacrificed 20% of their earnings is an indication as to their commitment.
And they're on the case re cost reductions at all levels.
Plus they've got alternative sales channels to exploit.
The Balance Sheet is shored up (for now).
And sooner or later (Q1 2024 imo) the tap will be turned back on.
JH and the Board have to navigate GKP through this difficult interim period.
Which is all about cash management.
And they are doing just that.
Which is what they're paid for.
It's why you make the big bucks.
Because managing a business in easy times is easy.
All you need is an accountant to count the numbers.
Now GKP need strength of character.
And for me that's clearly on display.
So if you've got confidence in the Board then relax and let it roll.
Or sell and take the pain.
Interesting times...
That's got to be right.
And you know I hate to agree with you!
However, in my world, GKP should continue to squeeze...the pain should be shared, just like the benefits that were delivered to GKP contractors during the good times.
That's an issue about relationships, and more, that's about JH and his ability to turn heads.
In the end, it's all about his ability to relate to his Board internally and his sense of his supplier dependence.
I'm pretty relaxed about this right now.