Member Info for theoryman

“ Exxon’s lawyers checked all the Kurdistan oil contracts legality before they entered Kurdistan years ago. ”

Those contracts can now be nullified under the FSC ruling which out ranks any previous decision.

It is important though that the IOCs did their own DD and genuinely thought they NOT knowingly involved in an illegal contract.

That means they can now be allowed to be involved in the renegotiation of the new contracts from PSCs to AMSCs.

Whether they, or the market, like what the new T&Cs will offer will have to be seen.

Bat, the site reporting has a Buy Sell spread and they calculate the mid price, allow a bit on either side for the unknown zone.

Your trades went through at below their unknown zone, so they gets reported as a Sell.

Blatantly not fit for purpose but some punters expect it as a “service”, the London Stock Exchange just reports it as a trade :)

@Nobull, whilst the judgement has annulled the original KRG O&G Law it has NOT automatically annulled all the contracts arising from it.

What it has done is given the Federal Oil Ministry the right to pursue the nullity of the contracts.

Now just because you have the right to do something doesn’t necessarily mean it’s the smart thing to do now or ever.

Which is better for the ICG?

Carry on like now, send no money under the budget agreement - apart from the odd top up - but let the KRG keep any money they can raise selling the oil.

Complete change, unleash the full impact of the judgement, the ICG sell the production under similar terms to existing TSCs and send the KRG their full budget share.

When ValueS and I last looked at this, the result was a no brainer, it was to keep things as they are now.

Maybe things have changed?

This will probably manage to annoy everybody but on the London Stock Exchange it carried an additional TNCP flag but what’s new? :)

That specifically lets the market know it is not a trade but is a transaction going through at a price that should by ignored by any price discovery mechanisms used by the market, which it duly did.

The transaction suited the needs of the participants, at that particular time, whoever they are, and it is being disclosed under the need for transparency.

@c*ckeye, No, the legal start of the PSC was 2007, that’s when GKP weee awarded the right to explore for hydrocarbons in an area drawn on a map and subsequently develop any finds if they were deemed commercial.

The 2013 is an important date within the workings of the PSC because that is when the initial FDP was accepted and the clock officially starts on the second phase, the development one.

Might seem a bit strange but the Production Sharing Contract starts well before there is any confirmation that there is production to share :)

@Straycat, how long in months beyond the end of 2022 do you think that the present version of the Cash Cow can continue to operate at that level?

I picture the CRP containing an “inheritance” as a result of the DFE. It is being slow released every month as the company produces oil but its original value is fixed.

Each monthly production figure and the PoO for that month decide how much is released and the new reduced figure is ready for the same to happen the following month - at some stage there is none left.

Previously using the early 2022 target of 55kbopd and $85, I posted that it would last for at least the first nine months of 2022, obviously now longer at 50k or mid range 47k or 44k.

So IMO the company will now have an exceptional full year in 2022 in terms of cash generation and distribution, as opposed to at least an exceptional first three quarters.

The key question is how long into 2023 will the pot containing the “inheritance” last before it is emptied and the PSC works normally and the ONLY source of profit is from the Profit Oil?

No matter how clever the future handling of the workings of the CRP are, it is a system for delaying the repaying of GKP’s agreed costs - it’s cash circulation as opposed to cash creation.

@BB, thanks everything has fallen into place.

Exploration phase started, then they found oil, the field was declared commercial BUT the clock didn’t start on the next phase then because not surprisingly, before the Development phase can start there has to be an agreed Field Development Plan.

It was the disagreement about how to treat the oil produced before the FDP was approved that I had in the back of my mind.

@BB, was there a delay between the field being declared commercial and the arrival of the paperwork from the MNR declaring the Development Phase had started? Seem to remember reading about there being various disagreements concerning this period.

@straycat, apologies, the site keeps crashing mid typing, I had a post for you but it went missing just before I had finished.

I will put it on the correct thread after typing it up again elsewhere and then copying it across.

I am at a loss to see why nearly everyone else sees that this cash collection and distribution will continue ad infinitum. I know that at least you will have a look at my argument as opposed to just attacking me instead.

@straycat, the clock starts from June 2013 and not 2009, commerciality is the trigger and not initial discovery.

SS, I think you have read 2 space 5 in truthsayer’s post as 25.

The original copied from the CPR refers to two five year extensions.

@truthsayer, what follows is my interpretation of that passage based on previous discussions about its meaning.

The first extension is automatic if GKP wants it, the MNR cannot override it, it is a non-negotiable extension of the PSC under the original T&C.

The second extension is not automatic, it is a possibility that GKP can apply for and it might involve negotiations with the MNR about changing the original T&C.

From Pages 4 and 5 of the CPR dated August 2016.

“The Shaikan PSC terms allow for a Development Period of 20 years with an automatic right to a five year extension, followed by a further five year extension that can be applied for. This gives an effective Development Period of 30 years after which the PSC contract will expire. GKP has informed ERCE that the 30 year period expires on 30 June 2043. There is no assurance that GKP will receive an extension beyond 30 years and the terms that would apply should a further extension be granted are unknown.”

@titan, I use the 0.78 when working back from an arrears payment to calculate what the production was - useful when there are no updates or presentations.

Since the annualised receipts are driven by production, PoO and number of payments received, only seems sensible to me to look at all sorts of combinations.

So for 2022 I’ve done the following, easy to do, then why not do it and maybe add in some probability based weighting to the alternatives which are not necessarily all equal?

PoO $75 to $105 in steps of 5
Production 44k 47k 50k
Payments 10 11 12

With the charts, they look so different when I adjust for dividends it seems that not to do so would be grossly negligent IMO - GKP is a special case due to the big frequently repeated dividends!

Gaps up from last Low sub 50p all closed versus one still open?
Higher Highs signifying the end of a prior down move or not?
Fib ratios that compare the lengths of two moves up that are reduced by different amounts due to different dividends or comparing moves up reduced by dividends and moves down that are helped?
Any indicator such as ma’s, RSI, Parabolic SAR… that depend on Close?

Understanding the operation of the CRP and the influence of the DFE is needed to get a feel for when normality will return. It will have a significant effect on what people presently feel is normal but which is actually abnormal in terms of cash build up and distribution.

The long term running of the PSC has been covered before and I hope that by now, anyone extrapolating well into the future will have taken into account the R-factor and the halving of the production that goes down the Contractors’ PO route.

h1970, I think PUTUP’s use of GKP(Ii) as opposed to just GKP was a deliberate move to distinguish between the company pre and post restructuring.

As previously argued if you only just focus on the CRP, the before and after cases are fundamentally different. Previously any CO went straight out to repay start up loans, afterwards most of it ended up looking like PO because the majority of the loans had effectively been swapped for equity.

I think he is also raising some interesting points about whether patterns on the charts, either adjusted for dividends or not and considering the number of shares to be used in pence have any real significance when the oil produced is sold in $.

I agree with most of the points he makes but fundamentally disagree with others.

Hi, the gross arrears are split in the same way as the original missed payments were, makes sense because both sets of arrears to GKP and MOL will be paid off at the same time.

So instead of using 0.8, I use 0.78, should be 0.783 to fit most months but only trying to get within 1% error band.

Hi, I’ve gone for 45kbopd and get $29.8 and $6.5 million net respectively for exports and arrears.

When it comes to the “any day now” I think there is evidence that might need stretching a bit.

Genel made a second reference to a shift to 90 days between invoice and receipt, their last payment only just made it but they are on the naughty step.

ShaMaran, who are normally at the front of the queue to get paid, had to wait past 80 days last month.

So I’d pencil in last week in Feb for our next payment, any sooner would be a bonus, first week in March would be OK.

@Straycat, while we wait for UNB1’s take on where it might go, a couple of points about the effect of the previous dividends.

Assuming zero tax paid and ignoring any future side effect of the two performance related share option schemes.

The previous 51p reduces the adjusted non-reinvested previous High of 302p to 251p.

As a result of the compounding effect, if the dividends were immediately reinvested on the exdiv date, not the payment one, that 251p is further reduced to 236p..

@Firehorse, my first instinct based on over 50 years of looking at ideas like this is that you have missed out something very important from your assumptions - otherwise you have found a way of improving the reward compared to money at risk without the probability of success/failure changing.

Usual approach is to start from the initial conditions snd see at what stage any unmentioned problems occur.

We used to do this on the old iii UKX site when people came up with an idea .

What month is the Future dated, what price did you buy at and what was the price to buy the share at the same time? ( To the nearest pence is fine.)

What are the % charges if the Future has to be rolled over?