Member Info for theoryman

Malik, it’s real time versus T+2.

Anyone selling today does not own the shares the moment they click the button. On the other hand the Register of owners is NOT updated today T, or tomorrow T+1 but will be ready for Monday opening which is T+2 in trading days.

Why does it matter? Well tomorrow is T+1 which is the Record Date which is the KEY date and the Register will NOT reflect any of today’s trades.

So anyone choosing to sell today does not own the shares in real time as far as their account is concerned BUT they will still appear to own them when the Company checks the records tomorrow, so they get the dividend.

CCC, pity this guy didn’t do some root cause analysis for possible reasons the KRG sell at the price they do at the moment.

1 The ICG do not send the budget payments, so the KRG are known to be short of cash to pay their employees, hence they are distressed sellers and buyers love driving down the price when they know the seller is distressed.

2 Every now and again the ICG let it be known that they consider the KRG as not have title to the oil they are selling. This limits the buyers to those who do not care less what the ICG believe but they will demand a discount for participating.

If GKP’s contract is one of the 80% that the ICG have no problem with then that should remove discount 2.

As for removing discount 1, that will require parties, that hate and distrust one another, working together for the benefit of the whole population. Historically it seems each side is prepared to take a hit, provided the others take a bigger one. In such situations the best hope is the arrival of an external stimulus that unites them because they all think they will be the ones to take the biggest hit :)

@opulentia it ties in with my last post and the difference between the unknown actual intrinsic value of a company, an individual’s opinion of what it is and the lumped together individual opinion that form the market’s.

The only thing that matters is the price someone else will give you when you want to sell and not the price they ought to give you or what you think they ought to give you.

@Nobull, a couple of points, both raised previously but still important IMO.

Given the uncertainties in the input values, the precision in the final answer of £2.98 is completely unjustifiable. The people who produce it might be professionals, in so much that they get paid for producing a number but they are not mathematicians.

For some reason, probably somewhere between £2 and £4 guv’ is not the answer people want to read :)

There is no perfect model for calculating the actual intrinsic value, so whatever is calculated has to be a opinion. How many different professionals, using different methods would a company have to use to get a “reasonable” spread of guesses snd would it necessarily lead to a useable value to justify a buyback taking place or not?

@Nobull, if the market price is above the company’s estimated fair value, what is the incentive of being a holder whether they are doing buybacks, dividends or nothing?

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@Nobull, doesn’t introducing fair value lead to a problem?

Since no-one knows what the fair value is, how can anyone know whether the buyback is taking place at/below/above it?

@damofarl, let’s give it a try :)

I am going to take DocS’s figure of 55% that he used to estimate this year’s profit.

Then I am going to use the PSC which shows that under present conditions only 22% of the monthly receipts are Profit Oil.

A bit of a numerical mismatch there!

So where is the rest of the profit coming from?

Is there any limit on how long it can continue?

Will any of the above affect the re rate and hence the price at which any takeover occurs?

Opulentia, you seem to have misunderstood the content of the first sentence-
“@PUTUP and @VS or anyone else who has been modelling the above. With respect to the CRP and R-factor figures in the latest RNS, would appreciate your thoughts on their implications.”

Have you been modelling the above? Instead of using diversionary tactics, what not try addressing the content?

Saw you posted that production being at 50k was a fact! Gross misconduct or gross incompetence?

Also saw you somehow thought the four payments would come to approx $200 million give or take $10 million - I assume you will be posting your reduced revised estimate.

Off out now for a good night out, estimated max cost €30 :)

@PUTUP and @VS or anyone else who has been modelling the above. With respect to the CRP and R-factor figures in the latest RNS, would appreciate your thoughts on their implications.

My interpretation is that every figure related to Income has to be on a received basis as opposed to invoiced - side effect of the KRG’s payment record.

Every figure related to Costs entering the CRP seems to go in immediately and will be audited later.

Both the CRP and R-factor figures quoted are based on income from BEFORE the September invoice payment, which was too late to be included in the FYR - we need to fast forward ASAP.

When it comes to the R-factor, very kind of the KRG to be running it at a value below where it should be compared to if they coughed up the money after 30 days. Allows more of the PO to go down the Contractors route than should be doing at the moment.

Following the next review, its effect should become noticeable because the receipt will not match the production and (PoO-21).

Just done a quick look at the CRP, unless I am missing something it appears to be decreasing at a faster rate than I pictured based on the previous data. The difference is way outside what I would considerable reasonable unless there is something like a delayed Cost yet to be included.

Also looked at the anticipated receipts from Dec to March, the last month having a bit of wobble factor. Unless I have made a mistake, I think the arrears will be paid off by the first three payments.

@PUTUP, there once was a flow chart on the company site showing how the original PSC worked - showed each % split being used at every stage.

About time IMO they published an updated one which reflects what is now happening on a monthly basis, even if it has not been contractually agreed :)

I’m looking for the following basic information in either the RNS or accompanying Presentation.
Production figures for Jan and Feb 2022
Current production figure for March.
Clarification on correct use of 61.5% vs WI of 80% at different stages of the PSC.
Update on progress of resolving issues that have occurred with SH 12, 13 and 14.
Progress report on SH-15.
Progress report on finally fitting those two ESPs
New ETA for reaching 55k bopd.
Updated figure for the gross CRP
Updated figure for the R-factor
And finally, an update on any progress re FDP.

@R2R, there are at least three of us running models. Personally I am waiting for the next update which will hopefully remove some of the considerable uncertainty.

What is obvious is that it is emptying at a faster rate as a result of the increased PoO assuming production has remained level and the invoices get paid.

The market does not seem to think that any of those three points matter since it has just made a new recent High on the dividend adjusted charts.

@ValueS, the two ideas are distinct and have to be dealt with in sequence, this is how I see it working.

1 Is the CRP greater than the calculated value of the monthly CO?

If Yes, then the full 40% of the 90 after Royalty goes down the CO route, that is what is happening now - the other 54 go down the PO route.

If No, then only the smaller monthly CO goes down that CO route, the rest gets shifted across to the PO route which becomes 54 + unused surplus CO.

2 The PO is immediately reduced by a % set by the R-factor. At the moment R<1, so the reduction is the minimum of 70%, which goes straight to the Government.

The other 30% of the PO is split amongst the Contractors, which includes the Government.

When the R factor reaches 2, the minimum 70% rises to the maximum of 85%, which leaves just 15% of the PO to be split amongst the Contractors.

There is a linear sliding scale between the R factor and the % take. So if the R factor is 1.5, the reduction is midway at (70+85)/2

So in a nutshell, in a sustained low cost environment, any unused CO boosts the PO but if the R factor is increasing there is a reducing % take for the Contractors of this boosted value :)

How about it’s for SKG and they even swapped € for $ ?

Dates and 0.96 fit, plus two out of the three letter code :)

@ValueS, have you included the lifting costs of the Contractors’ share of the oil in the costs recoverable through the CRP?

I think but do not know for certain that is how it is recovered. Again, I think the costs of lifting the Government’s share is recovered directly through the monthly invoice.

Mind you after today’s attack on a nuclear power station the only thing I will be modelling from now on is a Lead lined hazmat suit.

@PUTUP, agree with both Nov & Dec receipts to within usual rounding difference.

Not done the Jan one but your assumptions seem reasonable, so should be OK as a good ball park figure.

“ The cash figure as of January 21st had already been disclosed”

Agreed but not in that form as far as I am aware.

(Covenant + outstanding bond) height compared to Cash height, look at the slack.

We probably are both number driven but others prefer it displayed pictorially.

Plus given the number of times you have been shocked by the lack of numeracy displayed by some posters, I am surprised you didn’t comment on how colouring in the segments might have helped them even more :)

Slide 6 contains updated monthly production figures for 2021.

As noted last year there had to be something wrong with one of the production figures for Jul and Aug ‘21 in a previous presentation - the ratios were wrong compared to the payments.

Forgot this was GKP, turns out both were wrong and have now been adjusted down ;-)

There is a reiteration of the average up to Jan 24th rising to 46.8k bopd but no mention of what it is YTD. Disappointing since that would have allowed an assessment of how much progress had been made in total wrt production from SH12, 13 & 14.

Slide 11, simple but effective graphic demonstrating strong cash position in Jan ‘22.

Given the target audience, most of whom could probably work out that 31+31+28=90 in their heads, I wonder if anyone asked when the November payment was expected to arrive?

@lampedusa, try starting from here :)

Article 111 of the Constitution, “Oil and gas are owned by all the people of Iraq in all the regions and governorates.”

So if all of the oil is owned by all of the people, how can any subset of that group share any part of the oil with anyone outside of the group?

@c*ckeye, you wrote,” TM, are you suggesting this ruling out ranks the Constitution?”

Where I have implied that in any shape or form?

This is the about the annulment of a KRG Law for six breaches of the Constitution in the opinion of the FSC.

As a direct consequence of that ruling, the outcome is now being dealt with under Contract Law, which again is derived from test cases and legal rulings.

The clue is in the S of the FSC I.e. Supreme