Member Info for ValueS

@PUTUP, 15% of profit oil kicks in when the R factor is >= 2. It is going to be a (very) long time for that to happen. Probably never! Unless Brent reaches $100 and stay there long enough such that the R factor moves from 1 to 2 at a reasonably fast pace. Remember the R factor could actually move in reverse (reduces) when Brent is low, and hence gross revenue, while capex is high. I actually don't spend any thought about the effects of R>2 and how that could affect revenue. Rather, I concentrate about the area where 1
@Straycat, for some reason, I got the feeling (I might be wrong) that the KRG aren't very much interested in more (heavy and sour) oil from Sheikhan, but rather in the Sheikhan gas management . The rejection of previous FDPs is (I think) quite a good indication to that. Furthermore, I sense that the KRG wishes to have that gas treated (an expensive option) rather than re-injected (the much cheaper option - preferred by the contractors). SH9 was drilled in order to find a suitable gas cap, but failed to do so. It was then turned into a production well. How the current negotiations are going and about what subject is still a mystery to me!

Best Regards ValueS

Just received mine from ii.

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@TM, if Brent remains more or less at recent levels, then the event that R >= 1 would be in MAR/APR 2022 IMO.

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@PUTUP, after deduction of 10% Royalty, the oil is currently split 40% CO and 60% PO (R factor is < 1). The 40% CO is for the contractors only! So they can recover their costs quickly. While (currently) the contractors get 30% of PO and the KRG 70% of PO. It is when R is > 1 that the splitting of PO between the KRG and the contractors starts to change toward 15% to the contractors and 85% to the KRG as the R factor increases from 1 towards 2.

Best Regards ValueS

@TM, @PUTUP, I don't think finding the accurate and current value of the R factor (during 2021) really matters. All what is needed to be known is that it remains below 1, so that the contractors continue to receive the full 40% CO. So, by 31/12/2021, it is clear that R is < 1 IMO. The exact value will be known when the full-year results are out which should IMO be before the R factor is > 1.

Best Regards ValueS

"Yes, this is the part that needs to be modeled more accurately"
Gkp stated in the half-year results that net capex would be $75 m - $85 m. This means that Gross capex (Mol + Gkp) is $93.75m - $106.25 m for 2021, I assumed $8.5 m per month. or $102 m in total.
Gkp also stated that average production to 31/08/2021 was 42,900 bopd and that opex = $2.4 per barrel. This means that monthly opex = $3.12 m.
Adding the two gives $11.62 m. Add a small amount for G&A , say $0.38 m per month to get to a nice round number of $12 m of costs per month added to the cost pool. It's just my best estimation.

Best Regards ValueS

" It would be very interesting to model the R factor and to see just how close it is to 1 now. Anyone had a go at this?"

In the full year results, GKP reported that the R factor as at 31/12/2020 was 0.82, the total cumulative costs: $1,439 m and total Gross payments : $1,182 m.

Since the start of this year there were 8 Gross payments made:
{$18 m, $25.2m, $29.4 m, $28.1, $35.1 m, $35.8 m, $37.6 m, $38.5 m}
The sum of these 8 payments is $247.7 m ($193.9 m net to GKP)
Thus, the total cumulative gross payments = $1,182 m + $247.7 m = $1,429.7 m

Assuming an estimated average monthly addition to the cost pool = $12 m (you can change that if you disagree)
Then, Total cumulative costs = $1,439 m + 9* $12 m = *1,547 m

Therefore the current estimated value of the R factor = 1,429.7/1,547 = 0.924

Best Regards ValueS

Wolfiebill, welcome! If you'd bought @ 192.705 p, then yes it is 8.87% yield for you.

Best Regards ValueS

Sorry, PUTUP I only have the 01/02/2021 saved and its from there I made my notes. I don't know what the situation was on 03/08/2020.

Correction to my earlier post:
"have added another 1.26% to get to 11.18%" should be:
"have added another 1.36% to get to 11.18%"

Best Regards ValueS

"a Dutch based private wealth fund holding another 11.2 %"

That is (F van Lanschot Bankiers) the oldest bank in the Netherlands, which currently sits as the second largest GKP shareholder with 11.18%. They got the shares when they took over Hof Hoorneman earlier this year. Interesting to know that Hof Hoorneman was holding 9.82% of GKP shares when it was bought by F van Lanschot Bankiers. The increase in the shareholding since then means to me that the new owners not only approve of holding GKP shares but they have added another 1.26% to get to 11.18% , dividend re-invested?
Another major GKP shareholder who I think have re-invested the dividend is UBS Group AG.
Might also be useful to know that Precision Capital have increased their holding from 2.98% to 4.24% which represents a large 42% increase. Barclays too (presumably through their brokerage) added c. 1%.

The rest (including Mr Gertjan Koomen) stayed more or less the same.

Best Regards ValueS

Yes, but Brent is up and probably Mr Market is feeling `dizzy` this morning! I seized the opportunity and sold some of my shares for 195.16 p @ 8:11!

Best Regards ValueS,

According to GKP's website:
"Dividends are converted into pounds sterling at the spot rate prevailing on the Ex-dividend Date and are paid in pounds sterling by cheque on the Payment Date."

Given that GBPUSD = 1.3640 as I type, and if it holds more or less the same tomorrow, then the dividend would be c. 17.15 p per share.

Best Regards ValueS

Capex 's gone up for 2021 by $20 m from ($55m-$65m) to ($75m - $85m).

Best Regards ValueS

https://uk.investing.com/news/commodities-news/oil-up-producers-brace-for-potential-gulf-of-mexico-hurricane-2452118

"Buybacks don't create value. "

(Without spending a penny) implies no creation of value, but the concentration is there.

"We need share buybacks ASAP"

Exactly! It is just as good as buying the dips but without spending a penny. The company does it for you!

Similar thing happened few years ago when the interests of GKP in SheiK Adi (SA), Beir Bahr (BB) and Akri Beijil (AB) were taken away. Only Shaikan is left. It is GKP's only asset!! Something to do with the Russians?

BlackRock , Inc. crossed the 5% threshold and are now holding 10,758,431 GKP shares (5.03%).
Some of the dividend re-invested perhaps?

Best Regards ValueS

8.377 p per share 06/08/2021

@BB, @TM apologies if I am wrong, my original post was regarding valuing PO which I think still holds. In any case, I think the event of R >= 1 is rapidly approaching given that it reached 0.82 by the end of last year, the relatively small CAPEX and the much reduced OPEX for this year while payments for higher production rate and Brent as well as arrears continue to be received. Unless of course some major CAPEX is being planned for next year to reduce flaring - discussions have are already been held between the MNR and GKP regarding that.

Best Regards ValueS