Member Info for theoryman

Apologies, should have included ValueS in that first sentence after his post the other day, got removed during editing out an auto correction.

Looks like PUTUP and i were the only people in the market that thought the swap to KBT would have an effect, never mind the 16% one delivered!

I had 10% based on the quality discount to KBT being a lot less than that to Brent with the transport costs being the same.

With Brent the realised price should be (90-23) or 67.

With KBT the realised was 56 based on 72, so they are STILL taking SIXTEEN off.

That means the quality discount only decreased by 7, compared to that for Brent!?

A couple of things have resurfaced after watching the video yesterday.

Reference to almost having got all the historical Capex back and how this would allow the next set of costs to be recovered much faster - nice to have upfront confirmation of what some of us have been banging on about for many months now.

Very keen to keep adding new wells and it will only be lack of payments that dials that down. After three disappointing ones in a row, have the recent ones met expectations or better? Not long to wait until next update, just for once it would be nice to see production moving forward faster than hoped for instead of reading about very reasonable things that have held them back.

Tawke and Sarta were both around API 27 the last time I looked, which was the ball park figure for KBT before everything about it, including API and current price level disappeared from reports in all my usual goto places.

Shaikan comes out at roughly API 18 and with a higher than average S content.

Looking at the charts from a dividend adjusted point of view, the 221 from November is now at circa 211p after the a quick and dirty knocking off 10p.

So even a bit of concerted buying pressure will result in a BOGOF.

My adjusted support ( No I am not wearing a truss.) is (190 -10 )or 180p.

Got back in, after what turned out to be a misjudged attempt to get some golf in before the bad weather arrived, to find a message suggesting I should watch the video.

“Did the vertical scale need redoing it to fit in the delay for September or maybe they didn’t want to upset “our hosts”.”

Got that one wrong, I think even the original slide would have gone down well, an updated one even better.

Judging by their tone of voice and body language, all four of them are puzzled by why they are not being paid on time - previous cases had clear triggers.

Very clear message sent IMO, get the payments restarted and let us know how you are going to catch back up as well or we all cut back on Capex because financial prudence dictates that we have to.

No updated average production, just copied and pasted slide from last Corporate one - lazy IMO.

Slide containing chart showing delayed payments removed.

Did the vertical scale need redoing it to fit in the delay for September or maybe they didn’t want to upset “our hosts”.

Not going to watch the video when it comes out this time. At a previous event the GKP bloke was very professional but one of the other IOC’s main man was so sycophantic I wanted to throw up - the KRG took a payment holiday anyway :)

When Shaikan oil was sold as a stand alone product the price was related to Brent, standard practice.

When it became part of the KBT it was still related to Brent , which was not a problem at the time because KBT itself was selling at a roughly constant discount to Brent.

Since last February it has become a big problem because the discount has roughly doubled with a lot of wobble.

It NOW makes zero commercial sense for them to pay the IOCs based on Brent when the market pays the MNR based on KBT.

Flagged all this up in early January, modelling suggest circa 10% effect on GKP if applied to September’s production - hopefully proves to be less and if not then already priced in by the market.

@Lazenby, spot on, that’s how PSCs in general are designed to work and how this one works.

There is one possible area of misunderstanding and it is a major one in terms of how the company might be valued by some posters.

What’s on offer would be a PRODUCTION sharing contract and not a RESERVES sharing one.

The Shaikan field is an asset but one which the company does not own. It is producing asset I.e. the company has time limited access to benefit from getting oil to the surface.

“That portion of future production (and thus resources) legally accruing to an entity…”

The Net Entitlement Production transfers ownership of the company’s share of production at the point of delivery - standard PSC, rewards company for risks and services provided.

When the new CPR is published it will be interesting to compare the updated Net Entitlement Reserves with those from the 2016 one. (Table 1.1 Summary of Oil Reserves on Page 13)

The Net Entitlement Reserves remain under the ownership of the people because the oil is still in the ground - fundamental pillar of every PSC ever written, they are not Concessions.

I picture this as being an assessment of what the company could get ownership of eventually if things go to plan - it’s about the potential future transfer of ownership of oil but ONLY IF they get it to the surface and delivered.

Summary - under a PSC the oil in the ground always belongs to the people but some of the oil at the point of delivery on the surface gets its ownership transferred to the Contractor.

Don’t focus on the Net Entitlement bit, focus on where the oil it describes is, delivered or still in the ground.

Appears to be an outbreak of multiple !/? in middle of sentences - linked to schools being closed during COVID?

How late will payment be?

Will it be based on Brent or KBT??

How far below opulentia’s predicted $60 million by end of year (assumed to be 2022?!) will it be???

https://drawmedia.net/en/page_detail?smart-id=12204

Opening paragraph below, rest is well worth a read, according to it several differences still exist around Articles identified by the FSC as root cause of old KRG O&G Law being unconstitutional.

It refers to state of play 12 days ago, hopefully progress has been made in the more recent meetings.

“According to a document obtained by (Draw Media), the Legal Office of the Iraqi Oil Ministry on 15/2/2023 have responded to the proposals of the Kurdistan Region regarding the oil and gas law and rejects 10 out of 15 suggestions. The proposals have not been directed to the Kurdistan Regional Government (KRG) delegation, but instead the legal office has submitted to the Iraqi Oil Ministry.
The Iraqi Oil Ministry is against the KRG (selling oil, having its own oil and gas pipelines, having an oil and gas council, and reviving the KRG's oil and gas law after being repealed by the Federal Court).”

Tracked the original back to baghdadtoday but it’s in Arabic, the unverified translation is from quest4dinar.

IF the contents are a reflection of how things are going, then the only things left to decide are:- what % of the budget goes to the KRG and whether the MNR or SOMO can sell the oil.

If this was “Homes Under the Sun in the Country” then it would take just two phone calls to get a deal. A cheeky offer would be rejected but they’d settle for 13% and a 50% each split on selling the oil :)

This lot have had the same two points of disagreement for years.

@peabody, you have not allowed for the T+2 effect, so you are mistaken.

IMO the confusion arises because if you sell today your online account updates instantaneously, so your eyes see you are no longer the the owner.

Behind the scenes you REALLY are still the owner until the records are updated on Monday, which is Thursday + 2 trading days.

Since the Record date is Friday, the seller keeps the dividend because they are still the owner on that day.

Today’s ex-div is a warning to the buyer, they are NOT getting the dividend.

The talks do appear to be going very well BUT they are only the starting point.

Do they eventually get turned into drafts that can go before Parliament? (Some press releases say they are ready but others keep referring to ongoing talks!)

Will the session be quorate when it comes to the votes?
Will they get the required majority if they are quorate?

Will the FSC be asked to intervene by disgruntled opponents to what does get passed?
If they are, will they rule each decision as being constitutional or not?

What effect, if any, will an O&G Law that survives that journey have on the current PSCs?

“ Genel just received payment”, correct but it was for AUGUST’s production and set a new personal best for delay between invoice and receipt - apart from when they took a break from making any payments :)

Next focus will be on outcome of discussions wrt potential swap to KBT and effect on timings and size of payments - many possibilities!

@FH1, you wrote, “Plenty of capacity at the terminal for flow to be stored. Sounds like everything is precautionary.”

Agree about the capacity but what % was unused when it was shut down, that’s the important figure.

Tried looking everywhere for the answer, drew a blank, have you got a link to today’s figure or average under normal conditions?

@C***eye, read something about this last year, so to the best of my recollection…

Prior to this present membership, the old version had become borderline inquorate through deaths and retirements.

Under the previous CGI leadership they took the opportunity to bring in some new faces.

The recent rulings reflect the change in membership.

IMO the present FSC looks like it is set on a wrecking mission.

The FSC is the sole arbiter of matters relating to the Constitution, not the politicians!

Three possible routes I can think of, maybe people can add others.

Plan A Someone asks the present FSC members to rule that the present FSC is unconstitutional - pause for laughter.

Plan B The politicians who want rid of them declare the present FSC is itself unconstitutional under international law - argue it ceased to exist when the Interim Constitution lapsed and was never replaced under the current one.

That would require referral to an International Court in order to get an independent ruling. Which one, and if one does exist, are there any precedents, how long would it take to get a ruling allowing for appeals?

Plan C Use Article 89b of the current Constitution to reconstitute the FSC.

The politicians who want to KEEP the present FSC would then do everything possible to ensure that the session set aside to vote it through is not quorate, and if that fails, do everything possible to prevent a 2/3rds majority.

Just in case anyone missed it, the company put the following phrase in the latest RNS.

“…following the recent recovery of the majority of our historic costs…”

So effect of the the DFE on the FCF is about to end - official.

IMO those investors who understand the consequences of that quote will be starting with $25 million and seeing how far they can stretch it up before the financial elastic snaps.

@c***eye.

Three groups involved, the Kurds, the Iraqis who want to work with the Kurds to get this sorted once and for all and the Iraqis who don’t want to even think about it.

Which group can summon the majority vote on the FSC? Any past history, from last Feb or this latest ruling for example, to give any pointers?!