Member Info for theoryman

From the appointment RNS.

“We are pleased to announce that Gabriel Papineau-Legris, GKP’s Chief Commercial Officer, will be appointed CFO and Executive Director after the AGM in conjunction with Ian stepping down.”

Could well be he was already a Director as CCO, in which case it was a Director Buy of £20k worth of shares.

Still doesn’t meet the several directors making “chunky” Buys criteria though 😎

Apologies if I have inadvertently posted incorrect info about his standing.

Bloomberg article is from Dec 2023.

The other one was on here yesterday via X and a translation, seems to have been in public domain in Iraq from Tuesday.

The guy who bought this morning is not a Director, he hasn’t taken up the appointment yet.

BB, if APIKUR and the FGI had reached agreement on the “price per barrel figure” wrt commercial equivalence of the new contracts would he be barred from buying?

Or is he currently so far down the command structure he might not be aware, IF that has happened, even if others are?

In other words his action might not preclude anything happening in the background.

Anyone who thinks that director Buys are always a good sign is sadly mistaken. Investing history contains examples of big buys being closely followed by a nose dive in price.

Those who have tried to develop methods of using director Buys as indicators suggest looking for a combination which improve the odds of success but never guarantee it.

Look for several directors buying at the same time and the value of the trades should rank as “chunky”.

So one guy buying circa £20k worth fails that test on both counts but doesn’t necessarily mean it will fail either.

IMO yet another piece of information for the non-event bin.

Best translation I could find of the original.

“ Economy News - Baghdad

The Parliamentary Finance Committee announced, on Tuesday, that the government will send amendments to the 2014 (sic) budget schedules to the parliament for a period of not more than ten days, stressing that it will study those amendments once they reach the committee with the aim of submitting them to the approval of the House of Representatives.

The member of the committee, Moeen Al-Kadhimi, said in an interview followed by "Economy News", that "the government is currently finalising the amendments it has made to the budget schedules through an increase in the allocations of the ration (sic), the cost of oil production and the increase of social welfare and other allocations."

He added that "the government will send the amendments to the 2024 budget schedules to parliament for a period not exceeding ten days," noting that "the Finance Committee will study these amendments as soon as they reach the committee with the aim of submitting them to the approval of the House of Representatives."

It is noteworthy that the Finance Committee discussed with Minister of Finance Taif Sami, earlier, and the committee listened to the problems facing the ministry in preparing the budget tables for the year 2024, and the plan prepared to fill the deficit. The interventions of the members of the Finance Committee included the allocations of provincial projects and how to include them in the schedules of the 2024 budget.”

@JAB, do you know what the current internal usage is?

Outdated records show it peaked at circa 830,000 bopd which is non-trivial, so I don’t think pointing out the assumption that the flawed thinking that the gap to be filled is known , in any way qualifies as being pedantic or energy sapping.

If accuracy leads to disappointment then so be it but turning a blind eye to it is not my preferred modus operandi.

Last paragraph should read, “ The question they never seem to get asked is what size is the gap after the internal usage is added to the exports, and then compared to the OPEC target, does it even exist because there is already a surplus?”

@gggg21, is that the article where the minister conveniently quoted the OPEC PRODUCTION target and compared it to the EXPORT figure?

Not surprising there is a gap between current production and export it is called INTERNAL usage.

The question they never seem to get asked is what size is the gap after the internal usage is added to the exports, does it even exist because there is already a surplus?

Just read Surfit’s post and decided to have a really good look at the article that some are finding so positive.

It contains a lot of statements, some are easily verifiable, others less so.

What doesn’t it tell us?

#1 The US Court has ruled in favour of Iraq.

#2 The value of the interest to be added has been decided.

#3 Turkey has no alternative but to accept the ruling.

#4 Turkey has agreed to pay in full by DD/MM/YYYY.

FH1, when his estimates of fair value have been below the then share price, the share price has ALWAYS dropped below his previous estimate.

If you have faith in your methodology then all that is throwing up is a disconnect between the market view and your own - either great value is on offer or it isn’t.

I went as far as adding them as horizontal lines on my charts in addition to the market driven R/S levels.

Why do so many posters object to someone posting a different viewpoint to their own?

As I have posted many times before, I have no difficulty agreeing with myself, what I need is to read and analyse the thinking of those who disagree with me.

Surreyscot, here is PUTUP’s first post on here:-

“It has been somewhat amusing to observe the banter and, to a larger extent, whining here. What I don't understand is why those who think the company is grossly undervalued aren't buying more here. And those that think it's a loser haven't dumped the stock and left this chat. I'm of the view that this is cheap and have been buying all the way up from 69p. Whinging and hiding isn't going to get you anywhere. Either put up or shut up - one way or the other. Whether you are buying or selling is all that matters!”

Where is the reference to AIM that allowed him to be unveiled as a troll?

If you are going to make things up in a desperate attempt to to construct an ad hominem attack then please try harder - that was an embarrassingly poor attempt but sadly still got lots of Recs 🙄

@BSmonitor, including the receivables due is paramount to the successful implementation of what you outlined.

Given that the FGI have categorically stated that they will not contribute to paying any debts incurred by the Kurds as a result of contracts signed without FGI approval.

Given that the KRG owe their own population wrt unpaid salaries and owe the Iraqi banks for loans that have been used to pay some of the salaries.

Where do the IOCs stand in the queue to get paid?

IYO who will repay the debts and over what sort of timeframe do you envisage?

@RIDER75, this idea of a fixed figure being some form of payment has arisen from people posting on bulletin boards. If you look back at their previous posts you will see that they they didn’t understand PSCs, Profit Sharing Contracts or Revenue Sharing ones - draw your own conclusions 🙄

My question is why do the FGI feel there is a need to establish such a figure?

My best guess would be they are so used to the “straitjacket” TSCs, anything else involving sharing with IOCs is a step too far for some of their decision makers, it’s a form of financial comfort blanket.

What’s wrong with what happens everywhere else?

The oil gets produced and then sold, then in varying order depending on the contract type, Royalty is deducted, AUDITED allowable costs are recoverable by the IOC, some sharing is involved and tax is paid.

If they didn’t understand how PSCs work then hopefully following APIKUR’s education drive they do now.

If they fear being ripped off by IOCs then they should simply ensure the allowable costs are verified in a robust manner - there are lots of countries that manage to achieve that!

Somewhere in the haggling that went on to get the budget through, this idea of a fixed figure for costs per barrel was introduced. Who suggested it? Why?

When it was $6 AVERAGE, did they really multiply by the estimated number of barrels that possibly might get lifted in Kurdistan, convert the answer into Dinars and put it into the budget as a CAPPED figure for the TOTAL costs reclaimable by the IOCs?

There is no need to set that up, the costs get paid from the sales of the oil. There is no need for the FGI to set up a budget heading to cover the costs in ADVANCE of the oil being sold.

Congratulations to mMax1 for winning with 31pts for 6 correct Nones and a close miss out of 8 predictions. (Maybe the first m stands for mystic 🙄)

I was second with 26pts and damofarl third with 18pts.

1 Every entrant thought the Dec ‘22 invoice would be paid some month in ‘23, even mMax1. Null points across the whole field.

2 Went ex-div in Feb.

3 O&G Law didn’t get passed - still arguing over the draft.

4 Almost averaged 55kbopd in March, did reach it on 5 days but the shutdown of the pipeline scuppered the overall figure.

5 Brent FOB never averaged over $100 a barrel in any month despite several analysts suggesting it would be a slam dunk.

6 Anyone hoping for $100 plus total dividend in the year, as some posters on here were, was severely disappointed.

7 Share price never got near the 250 p level.

8 No RNS about an offer being received.

On Jan 11th last year I asked posters to submit their predictions for when certain key targets/events would occur during 2023.

Outcomes along with scores will be posted tomorrow.

Predicting the correct month scores 3pts, with 1pt for a close miss of a month on either side. Exception is if you choose Dec and it happens in the following year, that scores 0pts.

If you choose None, that means not in 2023, then you score 5 pts if correct and 0pts if you are wrong, no close miss allowed.

1 As we still await payment for August’s production, in which month will that for December 2022’s production arrive?

2 In which month will the share go ex-div for the first time?

3 In which month will the O&G Law get passed?

4 In which month will the company first reach hit an AVERAGE of 55kbopd?

5 In which month will Brent FOB Spot, as used to calculate receipts at the moment, first AVERAGE above $100 again?

6 In which month will the total dividend PAID reach $100 million or above?

7 In which month will the share price first cross up through 250p intraday?

8 In which month will GKP first RNS that they have received an offer for the company? (News sites,Twitter, websites, sources, unnamed people involved etc. do NOT count.)

As far as I am aware there hasn’t been a new TSC signed in the last five years.

The only type of contract which is illegal under the Iraq Constitution, as of Feb ‘22 onwards, are Production Sharing ones.

News releases from the FGI imply that the 2024 round of bidding for new contracts will be based on an improved version of the 2018 profit sharing model.

If the new contracts are offering that, it seems reasonable to assume that any adapted contracts for those IOCs already operating under PSCs will be offered something similar - mind you this is Iraq where they all seem to have undergone logic bypass operations.

If you want to DYOR into what the old TSCs offered then find the original contract for every one of them and what they offered, then find every agreed change as production targets were met etc.. Probably not worth the effort 🙄 There used to be a government site where every one of them was listed, it was a long list!

@xxxxA, in each type of contract there are “agreed costs”. The problems arise from which costs can be submitted for approval and the rate at which the costs are returned to the IOC.

In all contracts there is a limit placed on the amount reclaimable per invoicing period.

In addition, in any SHARING contract it is vital to understand at what stage the approved costs enter the sharing calculation.

E.g. in the Shaikan PSC the limit is 40% AFTER the Royalty of 10% is deducted, calculated on a monthly basis.

Next we come to the various contracts that might be offered.

There are at least four types of sharing contracts. Production, Revenue, Hybrid of first two and Profit.

Then there are the TSCs operating in the rest of Iraq. In the sharing contracts the profit element per barrel is a function of the PoO, in a TSC it’s fixed but open to change by mutual agreement.

At the same time the IOCs in Kurdistan were signing the PSCs, there were IOCs in the rest of Iraq who were underbidding each other for contracts - some happily signed up for between $1 and $2 per barrel for the profit generating element.

IMO the most likely outcome will be a profit sharing contract based on an informed upgrade from the 2018 version. Hopefully the FGI will have learned from the outcome of that round and the input from AKIPUR.

“The issue at hand is very fundamental and it seems one the central Iraqi government don't understand or, worse, are simply unwilling to recognise.”

The Article specifying the fixed costs has all the hallmarks of a control mechanism borne out of long standing mistrust. Whether the targets are the IOCs or the Kurds or both is anyone’s guess.

How on Earth did it get included in the Budget Law in the first place?

There are so many potential problems I can envisage if it is allowed to continue to exist even with a raised figure.

My proposal is that instead of tinkering with it, it should be removed from the Law and the FGI consider the benefits of treating the IOCs as “responsible adults” - albeit ones who are trying to make a profit 🙄😊

The Budget Law seems to require a fixed figure per barrel in Dinars based on production in Iraq but the IOCs in Kurdistan have individual costs per barrel in $.

What could possibly go wrong?

From the AGM Results RNS on 16/06/23.

“The Board notes that Resolutions 7 and 8 were duly passed but did not attain the support of more than 80% of shareholders who voted. As set out in provision 4 of the 2018 UK Corporate Governance Code, the Board will consult and engage with the Company’s shareholders as appropriate and will provide an update within six months of the AGM. “

So an update on this matter alone has to be provided by 16/12/23.

It provides an opportunity to update shareholders on other matters as well - this has happened in previous years when other resolutions did not meet the 80% threshold.

Level and stability of local market demand?

Price per barrel achieved?

Production profile over time, any problems encountered so far bringing wells back on line?

“Wonder who the favoured IOC members were/are ?”

Three groups I can think of, first two are debt related and the third are a group who want to get out of their existing contracts.

APIKUR is fundamentally different, debt related BUT involves contracts the IOCs are very comfortable with - involves a lot more issues.

In Iraq references to IOCs include Trading Houses, there is a lot of debt repayment that needs sorting.

There is a debt fuelled Gas related dispute between DANA and the KRG, which given the immediate implications for electricity supply throughout the whole of Iraq in Winter, could well be at the top of things that need sorting.

They have flagged up the idea of standardising all the production contracts along the lines of the ones for the next batch in early 2024. Part of that process will be adapting the existing TSCs into the new format. Those IOCs want improved contracts ASAP but from a negotiating point of view might want to see what APIKUR get offered.