Member Info for theoryman

@Putup, the comments surrounding shorting on here reveal a complete lack of understanding of why an entity might short a stock.

They seem to focus on the outcome of a single short on a given stock, they seem to forget it’s the performance of the portfolio as a whole that matters.

What if the entity was hedging a short on oil with a short on GKP?

News of pipeline becoming operational causes one to go down and the other up - maybe the Algo is trading the difference 🙄

@Straycat, initially thought about breaking up APIKUR through attacking the weakest member first - decided to look at it from the other viewpoint.

What product in terms of API, Sulphur, TAN etc. and Volume do SOMO want to come out of the pipeline at Ceyhan?

For that to be delivered, which fields from the APIKUR cohort MUST be included?

Suppose they need as a minimum, fields A, B, C and D, would like E & F but not really bothered about the rest.

Same offer goes out to A, B, C & D - no attempt to deal on individual terms, recognise you need them all and go for quick outcome.

We will pay invoices within 30 days guaranteed.

We will repay the monies owed in 24 equal payments starting alongside the first invoiced production.

We will respect your contracts up to the passing of the O&G Law.

If that works, offer E & F within 45 days and 36 equal payments along with respecting contracts. APIKUR will be in shreds but offer E & F a lifeboat.

If that works, offer any other fields they might want, without messing up the blend they now have, 60 days and 60 equal payments, as well as respecting contracts - they get to hang on to flotsam and jetsam and don’t drown.

As for the rest, start swimming!

@Straycat, just had time to go back through some posts.

Saw you called @P a pedant, thought you might like the joke.

Saw you asked me to stop theorising, thought you might like one about Heisenberg’s Uncertainty Principle.

Then I thought I had better add one from a friend who’s a philosopher and one from a psychiatrist just to round things off - nice mix of understanding and logic :)

I’m fine, thanks for asking :) Just made it to somewhere safe before a rather large thunderstorm struck.

Giving some thought as to how I would set about breaking up APIKUR - should it be required.

And as a shareholder I don't mind saying, I want the export oil to flow with Shaikan in the mix.

Q Who led the Pedant’s Revolt?

A Whom Tyler.

Heisenberg was stopped by the traffic cops. Do you know what speed you were doing back there?

No idea H replied but I knew exactly where I was.

Descartes went into a cafe and ordered a coffee. When he’d finished the owner asked whether he wanted another.

Hmmm, I think not said D, who immediately disappeared.

Heard about the Sado-masochist who liked taking cold showers so he had to take warm ones.

That last sentence adds nothing to the earlier Reuters report and quote we were all using yesterday.

When something is operational, it's ready to use or is already in use.

The former looks to be true,, we are still awaiting any official confirmation/denial from the Iraqi side about the latter meaning.

I have viewed this as a three stage rocket.

Stage 1 was getting the pipeline open.

"Within this week, we will start operating the Iraq-Turkey pipeline after resuming operations. It will be able to supply half a million barrels, almost, to global oil markets,"

Stage 2 Getting APIKUR oil flowing in the export pipeline.

There is nothing in the quote above that says the pipeline will be carrying almost half a million barrels a day by the end of the week, just it will be able to - no mention of source of volume etc..

Stage 3 Confirmation that Shaikan will be in the pipeline mix as it was before the shut down.

So far so good.

@gavsgear, I don’t have a X account, so could you ask him why he has assumed the costs remain fixed at $6 million a month I.e. there are no variable costs linked to increasing production?

Once he builds that in it might be an idea for him to run the production figures through the PSC model, deduct non-recoverable costs and hence come up with profit projections - IMO they will look non too shabby albeit with the caveats of unpredictable sales and well behaviour.

Then we could compare the two metrics of FCF and profit.

@Roxi, “One short has increased , try and create a false drop,…”

Why would any drop that followed necessarily be false? Why couldn’t the shorter have been more competent that those going Long at the same time and had a better understanding of the situation?

Reverse your thinking and see where that takes you. Someone who is already Long adds extra shares and the price goes up.

Would you post that this was an attempt to generate a rise that was false?

This is not the real world, it is Kurdistan, you do what need to do or able to do.

We agree to different, no point in going on.

@FH1, whatever figure you want them to keep in cash they can do BUT they must lose the equivalent value in barrels of oil from the next batch of production to compensate.

They will therefore not gain cash later on from selling the oil they gave to the KRG.

Gain in cash, loss of compensating volume, loss of potential to earn cash from lost volume, netts to zero overall in terms of gain/loss wrt cash.

Apologies all around!

Should read @Straycat, “ Let's not pay back KRG money that they don't deserve for breaking their contractual obligations. Again.” etc

Seems the auto correct saw the @ and inserted the name I used last with it.

@FH1, “ Let's not pay back KRG money that they don't deserve for breaking their contractual obligations. Again.”

That boat has sailed, unlike the tankers from Ceyhan.

Any money that was withheld, either accidentally or deliberately, when tankers were being used , has since been swapped for barrels.

GKP ended up gaining cash but losing barrels they could no longer sell.

The new pipeline to refinery deals allow no opportunity to get their hands on KRG cash.

Anfil’s post raised my hopes that finally GKP had found a way of holding KRG money and allowing a reasonably rapid collection of the $151 million in a roundabout way - alas it was not to be.

@FH1, the DETAIL is deliberate, it is there to allow anyone who disagrees with ANY point in the argument to home in and destroy the argument.

No try attacking the content of the argument, as opposed to commenting that the argument contains the necessary detail.

It is not a desperate attempt to confuse, it is making it simpler for anyone who can do to shred the argument to bits.

@Straycat, try looking at it this way.

GKP ended up with $X of the MNR’s money while the trucking was taking place, that was not immediately transferred onwards at time T.

This gave the company a welcome and unexpected boost to its cash flow.

Subsequent to this occurring, the equivalent value in barrels has since been taken by the MNR from time T onwards until now.

Not surprisingly this will have had a negative effect on the company’s cash flow since because they cannot sell the oil the MNR took in kind.

If the PoO was constant during the process, the later effect on the cash flow would be -$X.

Instantaneous boost followed by slower recovery back to normal.

Since the company has to report in $ and not barrels, there will be a note in the yearly RNS Payments to Government.

@Straycat, I don’t think there is anything that is NOW being held back from the KRG.

Originally when the oil was being sold by filling tankers, GKP took the gross payment up front on behalf of the GKP, MOL and the MNR.

GKP took its 36%, paid MOL its 11% and was then left with the 53% that should have gone to the MNR.

At one stage some of this money was NOT transferred, some of its value was delivered in kind though as oil, probably IMO almost all of it. Again, IMO, that payment in kind will have been completed. The PSC gives the company almost zero room for manoeuvre in terms of withholding anything.

(At the time I did express disbelief that the KRG would willingly allow significant value to be withheld in any form or GKP would be able to justify doing it. The Royalty and Gov share through the PSC at the top end of the flow chart are sacrosanct. The only leeway would be near the bottom, GKP as lead contractor withholding payment from another contractor which just happens to called the MNR :) )

Every year there is an RNS which details payments from the company in cash or in kind as barrels of oil, so it’s nothing unusual.

Once the oil is going to the refinery the payment mechanism changed. GKP will have got 47% of the gross, kept 36% for itself and passed on 11% to MOL. It will not have had any access to the other 53%, that will have gone straight to the MNR.

The KRG still owe GKP $151 million and GKP has zero (cash+production) that they are holding against that debt.

what we really need is the owner of the refinery to be a shareholder in gkp and bulletproof wrt kurdistan politics. maybe the uhnwi could give him a few to bring him into the game.

transfer our 36% to our account.

transfer mol’s share to their account.

transfer the krg’s share to our account and we divi it up with mol until the missing payments are wiped out.

job’s a good ‘’un - as explained in “the art of co**** finance in corrupt countries” , available on kindle 99c today only.

From the RNS:-

“Gross average sales are currently c.33,000 bopd and GKP is striving to increase sales volumes while prudently managing the start-up of wells that have been shut-in for several months and avoid traces of water. However, the continuity of local sales remains uncertain.”

Just because they have opened up some extra wells to meet the demand, it does not necessarily follow they have opened up EVERY well in anticipation of future events.

Given the evidenced uncertainty of the local market and the long running export pipeline dispute they will be treading very carefully IMO.

Better to miss a short term opportunity to sell production, as opposed to putting a well at risk of damage by flipping it from closed to open to closed.

They seem to be setting up a MIN MAX operation, maximising the production whilst at the same time minimising the risk of damage - careful balancing act.

I wonder which one of the pre-closure wells they will start up last if they want to avoid traces of water :)

@FH1, “ Not a lot of comment on this part of the RNS. Why would GKP be starting up wells if pipeline wasn't going to open. ”

Maybe they couldn’t meet the increased local demand that we were all hoping for from those wells that were opened first :)

@BB, what sort of ballpark figure do you think would be needed in bopd to give the whole system a good workout?

Are those two fields alone capable of providing that volume within a “soon” timeframe?

Following on from #3, how intense a stress test do they envisage and for how long?

Anything significant would require a decent volume and everyone might as well test everything from finding a buyer, agreeing a price for KBT, production, transfer, export through Ceyhan, invoicing and payment protocols under SOMO.

I can’t see how they can do anything meaningful without the cooperation of APIKUR who are surviving on lower realised prices than before but cash up front.