Member Info for theoryman

Opulentia, why the blatant negativity? Are you trying to destroy investor confidence?

Where has the 50k figure come from?

SH-15 according to the company has nothing to do with reaching 55k.

That figure is targeted to be reached by using SH-13 & 14 and the two ESPs - subject to well production. Do you know something we don’t or are alluding to such?

This sort of change in posting style and content would be interpreted by some as being evidence that your account has been hacked.

@BB, you wrote, “Was it to pad out the numbers for the EOY report, which would otherwise make rather poor reading...”

After the euphoria of seeing the RNS and its impact on the price, same thought crossed my mind as I clicked into skeptic mode.

I rejected it out of hand immediately as I thought through the consequences - hope I am proved right to have done so.

If the underlying payment problem still exists, then there will have to be a compensating slippage in the coming months and the reversion to the old pattern will be stark and therefore obvious.

So why try and create an illusion of stability when you know you haven’t got a prayer of sustaining it?

Wouldn’t they be going for a short lived boost to confidence that gets followed by long running ridicule?

@Nobull, I was working on three alternatives, the first two seem straightforward.

1 Money arrived yesterday, no way it can be included in 2021.

2 Money arrived and cleared last year but after it could be RNSd, must be included in 2021.

3 What if it arrived on Friday but was not cleared until this year? What matters for the accounts, the arrival or getting cleared?

Wow!

With half day closing for the market last Friday plus yesterday’s Bank Holiday introducing delays, there is a chance that they will be allowed into the 2021 financial accounts. They will look a lot better with 11 payments included as opposed to the 9 that had previously arrived.

It also now looks like the Genel reference to 3 months delay has not been applied and we are now back to working on 60 days. Will need to see how payments pan out over the coming months.

@PUTUP, I agree that there are two figures for the CRP, one is in real time based on production and the other in accounting time based on receipts - didn’t allow in earlier posts for the possibility of it being a four month difference, Sep + Q4 by EOY.

Taking your estimated production for Nov & Dec, plus all the knowns and using the $55 million (which is given as net in the RNS), I have that the CRP is effectively now just below $300 million based on production. It will be higher if based on receipts.

If the two CRP figures seem to make sense when compared, it should be possible to then - and only then - model how long it will take for the CRP to normalise under various conditions.

If it does seem doable, then I’d expect to get a most likely month, with one on either side, to cover almost all reasonable inputs.

Now for the bit I am struggling to comprehend. The month it does occur marks a quantum move of GKP from cash cow state 1 to cash cow state 2. Those two states are fundamentally different but none of the analysts reports I have read even mention it, never mind considered its potential effects.

@PUTUP, agree with those figures to within 1%.

Do you have a view on whether it is now payment within 90 days or should it still be 60?

On one hand there is the single Genel reference to 3 months but the last update from GKP referred to, “The delayed payment for September 2021 …”.

The use of the word ‘delayed’ would not have been necessary at that stage IMO if it was 90 days.

@damofarl, seems a very reasonable way of looking at it when buying in to this share IMO.

So far GKP have only RNSd the arrival of 9 payments this year, hopefully an extra one will arrive at the bank today so that in can be included in the FYR accounts.

As a result of the previous payment problems GKP is only allowed to book monthly receipts, as opposed to monthly invoiced sales - that fact alone is a warning sign to any new investors.

This year it will have a significant impact on the figures that will go into the official report but they can add caveats about what their expectations are about the cash arriving.

What would be a great help is the budget repayments from the CGI to the KRG to restart. There were two back to back ones just before the elections but they stopped and as of yet I cannot find any reference to them having begun again.

Let’s hope the recent seemingly positive vibes between the two sides means they happen again and we can both start expecting 12 payments every year with a high degree of confidence - as opposed to doing so now, which should probably lead to being sectioned under the Financial Health Act :)

Even if the payment arrives tomorrow the total number of payments since the start of Jan 2021 is less than the number of months GKP produced oil.

That fact doesn’t stop people taking one typical monthly payment and multiplying it by 12 to annualise it.

Was 2021 different to previous years and they normally make 12 payments?

Previously I suggested using just 11 months to derive the target figure and then use 10 and 12 to set reasonable boundaries - might have been a bit too positive there.

Nothing wrong in having an alternative where things improve so much it might make more sense to go back to using 12 as we should be able to.

On the other hand it would then be totally unjustifiable IMHO not to build in another version where calculations are based on 10, with 9 and 11 being reasonable alternatives.

“ if your really concerned with the Non Payment issue , why are you here?, ”

Because my risked valuation says it is offering value at this price. If it wasn’t offering value I wouldn’t be invested.

No idea where you get the idea I am nervous from, risk aware certainly but not nervous.

Now when City went from 4-0 up to hanging on for a short time at 4-3 against Leicester, I was nervous but that’s a result of having supported them for over 50 years.

Time for the second half.

Opulentia, IMO someone who disregards the risk of non-payment shouldn’t be invested anywhere :)

If you are wrong then how can it benefit you? If I am wrong then it might do because I have over estimated the risk.

The dividends you are seem so sure about come from the annualised FCF which depends on production, PoO and the number of payments - there is both complexity and uncertainty.

For instance, we don’t know if SH-13 is even producing yet, never mind at what level it will finally contribute to the 55k.

The first two make modelling the future difficult enough, the last one re the payments ratchets it up a notch or two.

I know we have mentioned this before but here it is again from the Genel update in early November.

“ Free cash flow before investment in growth was $99 million in the first nine months of 2021 ($36 million in first nine months of 2020), despite the expected industry-wide reversion to payments three months in arrears by the Kurdistan Regional Government ('KRG') meaning seven payments have been received in the nine-month period.”

So maybe the 90 day rule is now in place for everyone, it’s just that ShaMaran in particular and everyone else seem to get their payment earlier in the 90 days than GKP.

Could be the basis for a MENSA puzzle, what comes next in the sequence? 10 15 30 60 90 ___

According to one cynic, it’s whatever the MNR unilaterally decide it to be.

For the sake of this thread, I’ll simplify the reason for any deliberate late/non-payment into one of three groups.

A Funds are available but the potential payer declines to transfer the money within the agreed time - won’t pay.

B Funds are not available at the required time as a result of the previous profligate behaviour of the potential payer - can’t pay.

C Funds are not available at the required time as a result of circumstances completely beyond the control of the potential payer - can’t pay.

WRT GKP and the KRG, how would you list the three alternatives in order of likelihood, starting with the most likely?

For each alternative, what steps, if any, do you think GKP could take in order to resolve this long running issue with the KRG?

Agreed about the 42k.

Taking the YTD to end of Aug, adding in Sep + Oct then what is needed to get it to the YTD at Mid Dec?

I get average circa 45.2k bopd for Nov and Dec up to the RNS.

ValueS, when it comes to the payment delay it could have been worse.

The company used the phrase, “ is expected to be paid shortly”, they could have written, “is expected to be paid imminently.”

TOM247, here is what I posted to you September 10th:-

“ TOM247, if the well didn’t’ flow oil in the first place it was a slam dunk Geological failure.

In whose world do they fit an ESP to try and convert a Geological failure into a Commercial success?

I have never come across a single example of this being done, have you or anyone else?

So just in case I haven’t made myself clear, those first two sentences in his post make no sense whatsoever when taken as a pair.”

In view of that being my opinion then and it still being so now, why would I place any credence on the rest of the original post.

The point I was trying to make this morning was his answers to my specific questions earlier this month were worded much more clearly - this time there was a logical sequence of problems that had allegedly been encountered.

This time I felt it was worth starting to ask questions and see where the answers took me.

I was already beginning to think that if things had gone better than expected, or as well as expected with both SH13 &14, then we would have heard something earlier.

Once this didn’t happen problems with at least one of them becomes increasingly likely.

Turns out it was both for different reasons and the delay in connection is way past what even my worst case scenario envisaged.

The hoped for move to 55k is now targeted for January 2022 but subject to well production. Now given that SH13 appears to be still receiving remedial help, would love to know what contribution they have pencilled in for it.

His original posts in September were less than credible - using a pump on a dry well, really!?

His answers to my specific questions earlier this month were much clearer and more detailed.

I started from “coiled tubing”, went into gedanken mode and just asked myself a lot of questions and ended up where I did.

No points for being wrong or right, it’s the process that matters IMO.

Top line got missed off in the post.

Original posted yesterday but with answers now edited into the ().

When it arrives, this is what I will be looking for from the Ops Update. Almost certainly there will have been problems, what matters IMO is whether they are short/long term and localised/field wide.

What is the current production level? (Not explicitly given as far as I can see, only reference is to October peak.)

Has the FDP been submitted? (Yes)

Did everything go to plan with getting SH 13 and 14 producing? (No and No. SH13 found region of low fracture connectivity and is still receiving acid wash treatment. SH14 had to be sidetracked, suffered equipment failure and well bore issues.)

Did drilling from the same pad work well or lead to operational complications? (Remedial work on SH13 could not be started until drill rig was removed when 14 was completed. Likely resulting from pinch point in terms of limited space.)

When was SH-13 finally connected up ? (Not yet)

When was SH-14 finally connected up? (Not yet but almost)

Are both ESPs now deployed? (Neither deployed, new 2022 with cheaper but effective pumps)

The full sentence was, “ Almost certainly there will have been problems, what matters IMO is whether they are short/long term and localised/field wide.”

It is NOT information but it is based on a life time of experiences that my first mentor prepared me for, “Man plans, God laughs.”

If you have been involved in project management where there were no time and cost overruns, then you have led an exceptionally charmed life IMO and I must have been very unlucky

When it arrives, this is what I will be looking for from the Ops Update. Almost certainly there will have been problems, what matters IMO is whether they are short/long term and localised/field wide.

What is the current production level? (How close to 55k is it? What is it expected to be at end of Q4?)

Has the FDP been submitted? (If not, why not?)

Did everything go to plan with getting SH 13 and 14 producing? (Details?)

Did drilling from the same pad work well or lead to operational complications? (Details?)

When was SH-13 finally connected up - Sept, Oct, Nov, Dec or not yet?

When was SH-14 finally connected up - Oct, Nov, Dec or not yet?

Are both ESPs now deployed? (If not, when is new deadline?)