Member Info for theoryman

@Solarfire, thanks for that, had forgotten all about it. Had a look at Provision 4 and here is an extract.

“ An update on the views received from shareholders and actions taken should be published no later than six months after the shareholder meeting.”

Looks to me like they can’t just say that they have had a chat and any misunderstandings have been sorted etc.. They have to provide details of what the sources of discontent were and state what they have done to address them.

Anyone any experience of this sort of thing, either as a initiator or being on the receiving end?

Straycat, the double negative argument works part of the way but not to the final conclusion IMO.

The villagers improve their chance of keeping the sheep but do not guarantee it.

I think there are three variables, two are binary and can be flipped to the alternative but the third (the outcome) isn’t and therefore can’t be.

If you accept that consequence then the reference to shares doesn’t work either.

I seem to have failed to get across the point that avoiding analysing negative posts, from those who do so repeatedly, is a form of self imposed confirmation bias that inhibits balance; and therefore should be avoided.

To avoid any misunderstanding I really do take the same approach with serial positive posters.

I thought my final sentence, “When it comes to something new, I take a good look at it no matter who the source is!”, covered that though.

H, in legal clauses 60 days always means 60 consecutive calendar days, in order to avoid possible confusion over which days are included and which are not.

If it was working days, then there could be both different local holidays and definitions of when the weekend is.

@Bucephalus1, there is a potential downside to not believing people who repeatedly make negative things up. In the fable of “The boy who cried wolf.”, the villagers lost their sheep.

There are some occupations where you have to treat every piece of info as being true, even though there is history of it not being so previously - the consequences of getting it wrong are horrendous.

If someone does the same but with positive info, then if one scenario actually delivers, the consequences are much better, so more of a temptation to do nothing and see what happens.

Luckily it seems with GKP that most of the time it’s the same positives and negatives keep being referred to, all that changes is the probabilities they will occur and the relative benefits/downsides.

When it comes to something new, I take a good look at it no matter who the source is!

The original PSC was signed under the conditions outlined in the 1999 Code, hence the response should have been within 60 days.

The Ministries involved have been operating for over two years under the clauses of the 2019 one; where there is no time limit.

Under the conditions of the pandemic, is that nuanced difference likely to get a look in when it comes to deciding the speed at which things get done?

Anyone in the UK tried to renew a licence at the DVLA recently? :-)

@titan, what is wrong with raising negative possibilities?

No-one by definition can predict Black Swan events but identifying near ones is where serious money is won or lost. Identify the hazard, assess the risk and devise the plan.

Skewed probability distribution curves, long tails that are more populated than most think, being offered 1000-1 when even 100-1 is value…

It is far better IMHO to have people raise hazards that I haven’t considered than to carry on oblivious to their possible existence. Once I am aware I can then decide how significant they are and ignore them or adapt.

What if the international arbitration decides that the KRG never had the right to issue the PSC anyway? Is that even remotely possible given that the Iraqi Supreme Court is holding off from making a ruling given the ambiguity of the relevant clauses?

“ A contract will be considered illegal at its formation when it is incapable of performance without an illegal act. Contracts falling into this category cannot be enforced.”

If they do accept the legality of the PSC and rule against the KRG, where will the compensation come from, payments that would have otherwise gone to uninvolved IOCs?

When I first mentioned having to model agreements to repay arrears, to the previous agreement to repay arrears, I was joking but now…

“ Stop overthinking it and deal with the reality on the ground right now.
The key to all of this lies in our ability to get paid on reliable terms. ”

OK, try this for a simplistic realistic viewpoint, the oil field that GKP has a PSC for is in the wrong place :)

@PUTUP, here is how i pictured the separate subsidiaries operating and then the benefits/downsides of them working as one.

Subsid 1 would have CRP1 running on empty at the start of every month, a trivial amount of CO allowance then being used and the rest going down the PO route. In the time it would take for the other Subsid to get to break even ,the R Facctor1 would have increased and reduced the PO1. In the meantime Subsud1 would be accumulating cash but at a reducing rate, everything else being equal.

Subsid2 would have to borrow money to start up, every agreed Cost would boost CRP2 and this would keep happening until there was production from the expansion stage, probably beyond. Up until that point they would have to keep borrowing, the PO2 would be trivial, probably not enough to pay the coupon of the debt. It would take years before the original costs were recovered from the CRP2. Dread to think how long it would take for the expansion to pay for itself.

So what are the benefits/downsides of them working together?

Subsid1 lends Subsid2 the funds to get started but as a result reduces its cash holding.

Subsid2 lets Subsid1 use its CRP2 and transfers it to CRP1. How long does it take for Subsid1 to get the loan back? Somewhere between the pre agreement instantaneous and many years, I’d settle for a few months as opposed to a specific number but it’s the short time that matters.

Another benefit for Subsid1 is the R factor1 is brought back under control.

The money that Subsid1 lends Subsid2 keeps recycling, maybe needing a bit of a top up occasionally but in a hopefully non-threatening way.

Not claiming a thorough understanding, previous experience leads me to believe that is when the problem comes back and bites you.

@PUTUP is running the expansion model based on the established production funding the process.

Now picture it as being done by two separate subsidiaries, the first runs the set up from when 55k is reached, the other the expansion to 75k.identical PSCs but distinct CRPs and receipts.

I think doing the second one helps increase ones understanding of what is happening in the original case - maybe that’s just me :)

There is no way at the moment that you can rely on any payment agreement with the KRG, they have reneged on 4/4.

I’d see what happens in the short term and if payments are regular i’d set up two internal accounts. One for money to be paid out to investors through buybacks/dividends as before and the other to be allowed to build up to pay for the next stage of development.

At some stage, if I the level of confidence warrants it, I’d then start releasing the funds from that second account.

I’ve got a return to 44kbopd generating circa $31 million in total.
Below that would be very illuminating!
Above it would also be but much more difficult to unravel as to where and when the benefits have come from.

@Nobull, there is no need to post any answer over here and maybe cause problems, I can read it over there where the guidelines for what is acceptable seem somewhat more flexible :)

@Nobull, thanks for doing that, I think he has already put the info out into the public domain but at one stage it was argued the placing of a full stop mattered, hence the need for clarification.

@titan, i thought long and hard before posting the questions . My reasoning for asking might be flawed but it does exist.

Would someone with accounts on both boards post this across for Kurdman63? I tried to set up an account under my old iii and current lse avatar but it is already taken.

Kurdman63, on the 10th September you posted about the INITIAL result of drilling SH-13. The original post got qualified, confusion still remained and then the usual squabbling broke out.

Would you please clarify what you were told using the framework below?

Q1 Which letter fits what you were told by your source?

A The result was a dry hole - zero hydrocarbon flow.
B It flowed oil but at a non-commercial level.
C It flowed oil at a commercial level but below expectations.
D It flowed oil at a commercial level which was as good as expected or better.

Q2 If your answer was A,B or C, what methods were immediately tried to improve its performance and what effect did they have on production?

There might be a Q3 but its construction would depend on the previous answers.

Thanks in anticipation, theoryman from iii and lse.

@PUTUP, it triggered on the chart he copied, Weekly & Dividend adjusted.

The upper target is at least a higher High and the exit, if it triggers but whiplashes, is technically the value of the 200 ma, still some way to go for both.

Not happy with logic of last sentence, momentarily distracted by a 3yr old :)

You got a price to Buy that the reporting site had at below their mid- price, hence it was reported as a Sell. No dark forces, you benefited from someone wanting to get rid.

@Gazelleman, the London Stock Exchange do not report trades which are either a Buy or Sell as one or the other because they do not know which it was with 100% certainty.

The sites that do so are outputting info from a system that is not fit for purpose.

You were offered a price by one organisation based on their position at that time.

The reporting site does not necessarily know what that position was but uses its own position at the time it is reported to make a decision.

You got a price to Buy that the reporting site would have offered you to Sell - no dark forces, you benefited from someone wanting to get rid.

I’d feign disinterest, cut the proposed increase in production by 50% at the next meeting, citing the demand side effect of COVID lockdowns in Europe - plausible smokescreen?

Monitor the effect on the price in the market and if necessary act pre-emptively to drive the price up as they try to restock.

The weakness in the strategy of using strategic reserves is the known need to replenish them at some later stage - then you become a sitting target.

Hope both sides are employing their best poker players working alongside their top ranked Game Theorists.

In terms of each countries daily demand, what sort of volume is being released country by country?

Where on a continuum are these figures, from trivial to significant?

What sort of drop in price are they hoping to engineer and for how long?

At some time in the future they will have to buy back the oil.

How will OPEC+ react, ignore it or come out with a counter strategy and if so how strong?

Would they go as far as to punish the whole market because of the action of some of the big players? As in, don’t ever try that move again!

Would they react by limiting the benefit the countries get now by cutting production back now and then wait to add another cut to punish them when they try to buy back?

As PUTUP has mentioned before, could be a good idea to keep an eye on the Spot price and the near time monthly Futures.