Member Info for Wiseman72

So good RNS firstly reserves are as expected based on previous CPR which is a win of sorts when comparing to other companies in the region e.g. where reserves were downgraded.

Not entirely surprised there hasn’t been a huge uplift in reserves considering the same company prepared the CPR as the last one ERCE.

Nice start though for the new CEO particularly like start the distributions to shareholders.

All positive

So we’re off an appointment of a new CEO has to be positive and at least provides some stability and also a springboard for some decisions to be taken regarding possible dividends/buybacks.

Increasing oil price and forward looking increasing demand based on successful vaccine rollouts across the world.

Agreement on a payback method for the outstanding $73m owed to us should be landing soon along with a further increase in barrels produced all point towards a very positive 2021.

Good luck all and hope everyone enjoys a healthy and prosperous year ahead.

https://polaris.brighterir.com/public/gulf_keystone_petroleum/news/rns/story/xeqd5nx

What a year this has been, hopefully you and your cherished ones have managed to keep safe and can enjoy a ‘different’ Christmas as best as possible.

Looking ahead to next year I genuinely believe we could be in for a very good year, the continuing rollout of vaccines and reopening of the world will drive oil prices higher with demand increasing probably from Q2.

A Brexit agreement and and a more stable president in Joe Biden should bring more stability and assurance to markets.

JF’s departure, hopefully a decent agreement on payment of £72m debt and resumption in both drilling to achieve the promised 55k bopd. All this along with resumption of dividends and/or buybacks should see us return to a more sensible valuation.

I am super positive about 2021 no doubt there will be set backs along the way but overall I believe 2021 will be a huge year for GKP.

Good luck all, hope you and your families have a healthy and prosperous Christmas and New year!

Very positive update and looking very good for upward share price movement over the coming months.

Not surprised about the holding off of reinstatement of dividends and/or buybacks as I would expect these moves would take place once JF’s successor is appointed.

Really encouraging about the repayment proposal for arrears also being received hopefully a decent repayment plan can be agreed which would support the investments required to get us to 55k bopd.

Overall very positive GLA

They have hedged 70% but if the price is higher they will revive the higher price so I suspect they would have paid a price for this but we will benefit from the higher oil price.

Rarely for me but I actually think this was a good move by the BoD I suppose everyone gets something right at least once :)

GL

https://polaris.brighterir.com/public/gulf_keystone_petroleum/news/rns/story/w0l18zw

Simon - not sure if the next CEO will be appointed by new owners. I would be ok with that as long as a fair valuation was achieved at sale. My concern would be if sold now then the sale price would bear no reflection on the true value of the licence.

For me £2bn is the region where fair valuation starts to appear that’s based on current CPR which we all know is very conservative. Given the current market valuation I would very much doubt we could achieve a 2bn sale unfortunately which has always been my concern....getting sold on the cheap.

I personally would prefer a good dividend and growth with a good BoD than a cheap sale.

Haven’t posted for a while so thought I would give my thoughts. Given we are still in the midst of global pandemic it seems strange that I feel maybe more optimistic than I have done for quite a long time. The reasons are as follows:

- it’s recognised that we should have a number of effective vaccines and treatments available in Q1 next year
- confidence will begin to return and with increased capability of testing providing opportunities for global travel to open up more demand for oil will rise
- oil prices are cyclical and we have seen the bottom in this cycle given the bounce is demand driven by a return to some normality next year I see the curve in oil prices only going one way and that is up
- we should be close to appointing a successor to JF relatively soon which should enable some decisions to be taken regarding cancellation of shares and future dividends (one of the reasons I believe Genel has performed better than GKP over the past months)
- the increasing oil price should enable GKP along with other E&Ps in Kurdistan to retrieve back payments (approx 75m owed)
- resumption in the expansion program should naturally follow increase in oil price and appointment of a new CEO which should help GKP maximise any increase in oil price

There are a lot of positives I believe that should help restore GKP valuation to a more sensible level and hopefully start to attain more realistic valuations given the current CPR reserves.

GLA

Thanks Victor

If you look at the valuations and also at the time KRG were in effect a distressed seller looking to sell their share of certain blocks.

There is a lot of information out there which no doubt a lot of people have access to different presentations/reports that are no longer available on the GKP website. As I mentioned I think the more information holders share whether it be good or bad the better in my opinion. There is so much noise been generated throughout the years so it’s difficult to see the wood for that trees hence why trying to collate as much factual knowledge can only be a good thing?

GL

There have been so many reports and presentations down the years surrounding GKP and specifically Shaikan reserves which got me thinking. Given lots of the information was removed from the official GKP website a lot of historical findings have gone out of public view unless you go searching (you also have to know what to search for) you will never find it again.

Whilst we all know things change whether that be with the asset themselves, economic and political environments I find its always useful to have as much background information as possible to assess your investment and any future decisions.

Therefore, for what is worth and thanks to Everhopeful for posting snippets of the ryderscott report which triggered my thoughts I will post a few links to some interesting documents which may or may not prove useful:

1. Current PSC
http://previous.cabinet.gov.krd/p/p.aspx?l=12&r=296&h=1&s=030000&p=54
2. Wikileaks Oil Report
https://wikileaks.org/gifiles/attach/138/138446_BMI%20Iraq%20Oil%20and%20Gas%20Report%20Q2%202011.pdf
3. Wikileaks Valuations
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwjxgeX1luvrAhWvsKQKHTDUB8UQFjAAegQIAxAB&url=https%3A%2F%2Fwikileaks.org%2Fberats-box%2F%2Ffileid%2F30563%2F12847&usg=AOvVaw3_-qWEdnOYZRHXdf3j6cKE
4. Kurdistan to sell assets to Turkey
https://ekurd.net/kurdistan-sell-oil-fields-turkey-2016-12-27

Have other articles will dig them out and post when I have a chance, I think I would be good for others to post any useful documents as you see fit as the more in the public domain the better.

GLALTH

****eye - I am sure I read an article about his involvement with ERCE but unfortunately don’t have a link or copy sorry.

Whilst I try not to dwell on the past I personally think it’s important to remember history to try and avoid the same mistakes going forward. However one of my points in a previous post is that we haven’t learnt from previous mistakes I.e. we still rely on the same customer (MNR/KRG) who contributed to us getting into financial difficulties a few years back due to non payments. Yet whilst we are in a much stronger position now than previously with low level debts which are not secured against the licence/asset the opportunity to diversify to has not been taken.

But again banging the same drum I think that has been to poor management and with a change of CEO I am hopeful this can be reversed.

Putup - maybe I will by myself a bigger calculator just like yours :)

Remember there are many ways to value companies and Enterprise Value is only one, which funnily enough normally provides a higher valuation dependent on the level of debt carried. Reality is if I sold a share today I would get around 76p if I had the equivalent share without the dilution etc it would have been in the multiple pounds. Either way we are grossly undervalued in my opinion.

****eye, I was aware he was involved in some shape or form. Agree about the suiting KRG maybe that will change in the future.

GL

Everhopeful - I think most people recognise the current CPR is both outdated and also hugely underestimates the recoverable oil as well as being very limited in the scope of the study of the field.

I have mentioned in the past the fact that GKP board members at the time were not happy with the findings of the CPR they instructed the same company to perform a second (ERC) now call me stupid but if you your not happy with the findings the first time then surely as a duty in your role you would a) get a second and opinion and b) surely not use the same company to repeat the study.

Either way even with the current reserves published using the current CPR we are hugely undervalued in my opinion. Hopefully at some point we will get a more sensible CPR which covers the entire field that will enable a decent CEO to promote us.

GL

Putup. - you are completely missing the point and you know full well enterprise value is different than what I was highlighting. My point is that GKP has previously had a market cap in excess of 4bn without any route to market or proven production, this valuation was based on potential and now my rant :)

GKP has delivered a snippet of its potential but potential needs to be realised and delivered which it hasn’t been to date. Even within our own peer group we are massively undervalued in my opinion,

I am a long term holder here and continue to believe in the asset hence why I haven’t sold out, believe me there have been times when I wish I did.

I like a lot on here have seen people come and go Nickiminaj who only ever seen the blue skies and others who have only ever pushed doom and gloom.

Each of us have to make our own minds up about GKP and take responsibility for our own decisions. However even adding all the risks in please feel free to stick a dollar estimate for valuation purposes against our current CPR numbers which might highlight how ridiculous the current valuation is.

- 194m 1P
- 578m 2P
- 239m 2C

GL

Slingsandarrows - I think any sort of alliance between the Kurdistan oil E&Ps would be positive however I would very much doubt this could be achieved as let’s face it a consortium of companies would be much more difficult for the MNR/KRG to bully and control. Obviously this would be completely different if majors were operating there or maybe that explains why most of the majors have not gone big in Kurdistan.

Regarding a commercial tie up whether that be a farm in/out or otherwise there would be a financial transaction of some sort based on what the two parties would bring and I feel with such a low valuation at the moment we wouldn’t get anywhere near a fair deal in my opinion. Let’s face it if we were producing 55k Bopd and market cap 2-3bn then we would have much bigger resources to expand/acquire etc through greater access to cash.

For me we have got to get the right calibre of CEO in and start to rebuild confidence.

GL

slingsandarrows, please seem my personal thoughts below:

1. For what it is worth I have always felt JF was completely out of his depth, for all his faults and he had many TK could sell and promote the company which in my opinion is a key skill for any CEO. The CEO sets the tone and direction of the company and at no point as JF really sold the 'potential' of GKP, he has failed to deliver on so many levels (PSC, FDP, Growth Plans, Improved Communication etc etc) Albeit there has been some significant things going on including political unrest, pandemic etc etc however all his failings cannot be excused. I think any decent CEO would have promoted the company more and also used the huge cash holdings last year more wisely to diversify. However given JF couldn't deliver on the development expansion of Shaikan and clearly had eyes on a cushy retirement there was no chance of him ever trying to build another revenue stream to try and offset the risk of the one resource one client situation we are in.

2. Whilst I am hopeful we will receive the outstanding debt I wouldn't expect this will be received in one lump sum and I also believe interest should be charged on any repayment plan agreed going forward. Please bear in mind we have been here before like an old saying making an error once is forgivable however to repeat the same mistake again is careless at best. But again I come back to the reliance of one customer (MNR/KRG). With another revenue stream we could take more control of our own destiny which should have been the case.

3. I do think there is merit in M&A when there is genuine value of bringing two companies together however the conditions have to be right and the current valuation of GKP would mean a bad deal for us shareholders I fear. Consider we currently have the largest reserves in Kurdistan and that is based on a very conservative CPR and a previous market cap in excess of £4bn yet currently have a net valuation of approx £17m!!! GKP has access to the better asset when comparing to Genel however Genel has performed so much better but even they have underachieved. DNO were trying to take GKP on the cheap a few years back and for me that is my biggest fear.

GL