Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
It can also be read that we are finally getting close to developing the oil first; which is what we have been asking for, for ages.
Gas is still up in the air, as it has been for the past few years. Given the current climate, is it realistic to expect the gas being developed soon ...
The option now would be to secure a proper extension to the PSC ... and sell it. It has been clear for a long time that this project was just too big for Genel. With the current crisis and the one coming ... standing still even if it is not pleasant, is a good solution.
On a separate note, I an really concerned by Hawkey47. I genuinely hope he is ok.
Good luck all.
Tartine.
You really thought they would just pay up given the current market situation ? I was more concerned with the current status quo continuing. As soon as they did not honour their plea to catch up with payment in January, I read it as being delayed for much longer. At least like this it is stopping the rot. The fact that the receivables agreement is suspended maybe is a good thing as well (if it is eventually resumed) as volumes are going to be less and it is based on volume.
I am not saying it is ideal but it is not as bad as it could be.
I actually think it might be a good time to finalise BB while KRG is on the back foot .... the key is payment terms !!!
I see this as a positive. Genel is going to reduce output (did I read this correctly). We would get paid the following month for production.
I wonder if the balance of power has not shifted slightly towards the IOCs. As pointed by a previous poster, the KRG/KRI cannot function without oil revenue and given their previous payment record, the crisis in international market, they are probably as close to getting no revenue as ever; I.e the IOCS have to think about survival and producing without getting paid might have not been as straight forward as before.
I really see it as a bit positive .... it is still very challenging of course.
I don't think it will have a material effect on oil prices. As Ocelot pointed out, the main factors is the demand destruction.
One of my friend working at Airbus told me they expect air traffic level to take 3 years to go back to 2019 levels and take 19 years to go back to the pre crisis growth levels (doubling every 20 years, since the 1970s). As a result they think demand for aircrafts to be 40 to 60% of 2018 levels over the next 5 years.
Personnally, I find those numbers a bit bleak but even half of this will put a significant lid on any oil price recovery .
It is possible that Donald will have more pressing issues than the oil price to sort out in the next few weeks. Politicians are actually playing their complete legacy with this pandemic.
The American cultural model is bound to take a hit as their health system is not designed to absorb that type of sanitary crisis.
Their social system will be under considerable strain with the sharp rise in unemployment ...
Difficult to see when the oil market will be on the path to recovery. IMV it will take another 3 months to have some visibility ... when the bulk of the health crisis is behind us, then serious thoughts will be directed at "what next for the economy, oil prices etc ..."
Only my view ...
GLA
Stay safe.
Let's not assume the talks between Russia and USA will necessarily work out. It is not that straight forward for the USA to dictate to their producer (although given the current and future crisis Donald will find a way). More importantly, Russia is under American sanctions and has been for a long time. One of the aims of this price war for Russia is probably more to damage the USA economy/oil industry than the SAS one (even if it started as such). Seeing uncle Sam coming cap in hand, I would not be surprised if Putin takes his time to decide; within reason obviously. They will all have to play ball eventually.
A long haul still ....
I would not be surprised if it does. Stopping production seem the right thing to do from a pure economical sense but the KRG need any dollar they can get, so it is not going to be that straight forward to do so.
Whether the dividend is maintained is another question. Is the announcement at FY results binding? Maybe it is as it would have mislead the market ....
Very long way to go in this ...
Bilgin building up its stake in the company .... Cheap TO offer to come ....???
It makes perfect sense Boyo .... whether it can be done is anther question (stopping production). Some production being taken off the market will be key to rebalanced the price. However we are long way off to the end of this crisis. A lot of companies will go under, companies that were viable before, a lot of people will be laid off ...
It is impossible to say at this stage what the impact will be on our economies, spending habits, travelling habits, etc ....
I agree Boyo. This is now just a gamble as you cannot predict :
1) when/if payments will resume
2) what the effects of the economic crisis (which is still to come)
Praying might be an option for those of you who believe ...
Personally, I am more worried about the more general crisis but regarding Genel it would seem prudent to look at cash and asset preservation rather than being all guns blazing about assets, we will be paid etc ...
The very large rise in the past few days might hint at something extra-"ordinary" happening but it is very difficult to know what ... TO might happen in the end ....
GLA ... Testing times ...
Well Guys, I am a bit baffled by Genel surge in the last few days. I did buy a few after the results at 61.20p but I was not expecting this.
What do you think is in the works? I saw people talking TO bid. I would be very surprised in this environment. It would have to be by one of the current holders ...
Personnally, I would be more thinking about gas news/agreement.
As to the more general market recovery, I think we are a very long way from it. There will be a wave of bad news in the coming weeks, direct Covid-19 bad news (let s hope not too many), a lot of consequent companies failures and surge in unemployment. It will be fairly big in Europe but the main one will be USA. How bad is it going to be there? Who knows? Africa in the coming months?
We could be surprised and most economies manage to turn the corner reasonably swiftly, but I doubt it.
We will see ...
Any ideas on what could be brewing for Genel ???
On a separate note, I hope our friend Hawkey47 is ok ...
Good luck all.
I did buy a few yesterday at 61.20p. I was a bit surprised to see go up so sharply.
However, as mentioned yesterday, it is going to be a long crisis across all sectors and it is a bit of an unknown as I think a lot if businesses will close shop in the next 6 to 12 months. It is difficult to see where all this turmoil will lead. However, if payments resume and goes back above 40USD, Genel is cheap ....
DYOR
Stay safe ...
Hasiba,
I did read it but it is no different than what happened previously. First it was to be settled in January, now they mentionned Q1 (not 100% sure but I seem to remember Q1).
The truth is we are used as an adjustment fuse for the KRG revenue which is far from ideal and they do pay some other companies.
I understand these times are very testing for everybody but it doesn't look like help is a 2 way street in KRI. We have been waiting for Bina to be approved for ... years now.
So something is not quite right.
Coming back to our little exchange the other day (no bad feelings on my part), the reasons why Genel went down from £3.00 to £1.50 are those. Genel overshot a bit on expectations of the gas being approved imminentlyrics. It did not happen. Went down to £2.20 ish ... not in a straight line and then the payment issue arose and brought it down to £1.50.
The potential is still here but the issues as well.
At this price it might now be a bargain, but we cannot be sure because 1) The SAS has been silly (or not depending on what happen next) and 2) more importantly this Covid 19 pandemic is a real unknown and it looks like it will be an economic disaster.
I agree with Boyo, there is probably plenty of time to buy more ... we will see.
IMHO
GLA...
One thing I find a bit worrying is that Dana is still getting paid. It does not say much for our importance in the KRG setup.
Going forward, finding a solution for the payments is crucial. It is very difficult to commit cash to any development if you are not sure to be paid for the oil .... or gas.
Well, this bad new indeed. The 2 bad we could expect have happened : write-downs and interruption of payments.
IMHO, this is not an investment option anymore (even if most of us are stuck here at this level).
I hope they concentrate on cash preservation going forward. Any production is just draining assets and cash.
The main goal going forward for the company is to try and move away gradually from KRI (difficult I know as all our eggs are here) and work out a way to be paid directly for our production. Keep pumping and just hoping to be paid is not tenable. This is the second time it happens and the company cannot be a fuse for all problems in KRI.
Buying assets elsewhere might be an idea now (I know a bit risky, but no riskier than pumping in KRI). There must be companies that are attractive to buy, even smaller ones would do.
Does anyone here know if this lack of payments is affecting ALL the producers in KRI?
Implosion of the region comes to mind .....
GLA
Tartine
Hi Dodger777,
Well, it makes sense where we are to suspend the dividend. One has to assume that the financial pressure on the KRG is as intense as ever, therefore I don't think the payments are unlikely to resume soon (hopefully I am wrong). If this us the case Genel will need all the cash they have.
So on balance, I think the dividend will be suspended ... probably to be reviewed later this year ....
As for Genel share price, you cannot call the bottom but what I meant was that this crisis us going to last a few months and therefore there no real benefit getting in now that the market are still volatile .... my guess is they will calm down at the bottom at some stage.
Britain is in the very early stage of this pandemic and it is only when the actual extent of it is clear that the market will start bottoming and then go up again.
The bottom line is .... nobody knows ....
Very possibly a lot cheaper .... I agree. there is not rush to buy as it is going to be a while before market normalise the situation.
The covid-19 is likely to be a lot worse than it is now and this will last at least 2 months.
I was thinking about buying a few days back but like you I believe there might be better opportunities in the weeks ahead . For Genel, we are probably there or there about ... unless the FY results are bad. I suspect they will try to present them as neutral.
We will see ...
Stay safe all ...
Tartine.