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Hopefully there should be some Clarity provided on Thursday regarding the PSC, according to the half year results the capital strategy was only going to be announced following clairification, see below:
‘Once the revised FDP is submitted to the MNR and there is clarity around the PSC, we look forward to providing further details to investors, including capital strategy’
Let’s hope we have a positive week this week, I thought the last operational update was very encouraging although I found it strange that new commercial arrangement was for two years and no mention of the PSC (is this no longer needed). I would expect a good strong set of financial results to be delivered on Thursday but am hoping for more including:
- update CPR
- utilisation of cash (possible special dividend)
- update on MNR buy in or not including back costs
- possible farm in?
I don’t think we will get all of the above but here hoping :) regardless we are definitely in an upward trajectory with so much potential positive news to come. The BoD must deliver though and if this starts to happen confidence will return and even without any of the above I suspect a rerate will naturally happen to reflect a more true valuation even based on the very low CPR numbers currently.
Good luck and here’s to an exciting week ahead!
Some crazy share prices being talked about, whilst it’s nice to see us rise I would to see us back to more realistic valuations. Remember this has been valued at over £3.5bn previously when we were producing next to nothing. First target back over £1bn then hopefully true value will start to show with updated CPR and delivery of the expansion project.
#shares. Valuation. Share price
229430000 1500000000 6.53794185590376
229430000 2000000000 8.71725580787168
229430000 2500000000 10.8965697598396
229430000 3500000000 15.2551976637754
GLALTH
First of all thanks for the feedback from those who attended the oil society meeting, as suspected nothing really new although I find it puzzling that they are now referring to 80% working interest yet no RNS (surely this is significant enough to warrant an official announcement).
I find it shocking the complete disregard for us PI’s I have emailed IR twice enquiring about the latest progress on PSC negotiations and have not even received an acknowledgment. Whilst I didn’t really expect a direct answer to completely ignore the very people who have invested significant sums of money to fund the salaries of those who are meant to be working for us is disgraceful. I have invested in much larger and complex companies before and have always received a professional response from any queries raised.
The sad truth is that we just don’t matter anymore, the company is in fantastic shape financially and should be valued well north of where we are even based on a low out of date CPR. This and other previous BoD have failed us PI’s the promises turn into silences. JF has failed on many fronts including his repeated expectations of PSC negotiations, improved communications etc. The fact a lot of large II have not forced him out yet surprises me, maybe just maybe they do know what’s coming.
Personally the talk of imminent takeover doesn’t help in my opinion as it distracts from what we should be focussing on which is ensuring this current BoD deliver value organically by using the high cash holding and free cash flow. Think about it even the average guy in the street would probably get 5% return on 300m cash which would add approx 1.2m a month!!
For me I have no confidence in JF anymore I do however be still believe we have control of a fantasic asset in Shaikan.
GLALTH
Share in Issue Mkt Cap Sh.Price
229430000 367000000 1.59961644074445
229430000 400000000 1.74345116157434
229430000 465000000 2.02676197533017
229430000 575000000 2.50621104476311
229430000 600000000 2.6151767423615
229430000 690000000 3.00745325371573
229430000 700000000 3.05103953275509
229430000 800000000 3.48690232314867
229430000 900000000 3.92276511354226
229430000 940000000 4.09711022969969
229430000 1150000000 5.01242208952622
229430000 1250000000 5.4482848799198
229430000 1500000000 6.53794185590376
229430000 2000000000 8.71725580787168
229430000 2500000000 10.8965697598396
229430000 3500000000 15.2551976637754
Link to presentation
https://www.gulfkeystone.com/media/113628/investor-presentation-march-2018.pdf
I was looking to see what the latest revenue arrears looked like and the only information I can find is from the 2017 results presentation which shows:
- $33m revenue arrears as of June 2017
- $76m MNR government participation option (back in costs)
Since this presentation I would have expected the revenue arrears to have decreased but the back in costs to have increased (given no 2nd amendment).
https://oilprice.com/Latest-Energy-News/World-News/Sinopec-Ready-To-Pour-3-Billion-In-Iran-Oil.html
Thanks Mikey.
I agree the different institutions will have different approaches some long and others shorter term traders as well as shorters (Sothic being an example). I many cases it will also be about opportunity cost I.e the cost of having capital tied up in GKP instead of investing elsewhere and potentially getting better returns. I like yourself so find it interesting that so many institutional investors continue to hold, there is obviously a reason.
Most of us agree that the current valuation is below fair value when comparing to peers based on even current conservative CPR figures, I for one would like to see an updated CPR undertaken by someone other than ERC which could throw out some interesting figures.
Thanks again for digging out the WI slide.
Thanks Mikey - the key point being ‘net or fully diluted working interest’
Angina - agree with most of your points apart from point 5 as if you look where the vast majority of Middle Eastern oil is produced there hardly holiday hotspots :)
I do feel JF has badly let us down though with all the promise upon his appointment over 3 years ago, he has failed to deliver so many things over his tenure. As us PIs are almost negligible now given the large institutional holdings I do find is puzzling they are prepared to continue to persevere with him. Let’s hope he does actually deliver a good outcome in the end.
So overall the operations update was positive with high end estimate BOPD being achieved during 2018 and a very healthy cash position. Opens a few more questions however:
- where is the payment for October
- what payment rates/terms are now being used as oil sales agreement expired end Dec
- where are we with the elusive PSC amendment
- is the WI 58 or 80% as recent presentation says 80% but I thought that was part of the PSC negotiations
- when will the next CPR be delivered and by whom?
I do think we are looking in a very healthy position and the free cash flow looks good, I am surprised we are still sitting with such a low share price given we hit £3 last year yet we have made more progress (submission of FDP, confirmation of upgrade to 55k BOPD etc). The current valuation based on any model is extremely low given the current net cash position, FCF and current price of oil.
Here waiting for further information regarding above!
So we finally have an update, mixed bag really as excellent news of current cash holdings almost $300m and strong average production during 2018. Downsides include delayed delivery of drilling equipment so delivery to 55k a day delayed by 3 months.
Still no word on PSC or commercial contract agreement replacing now expired agreement. I would expect another RNS soon to confirm additional payment received today hopefully?
They may take instructions but are duty bound to report their findings, like any auditor they should report what they see and is a true reflection of there investigation.
I agree JF is partially to blame in that if true ERC are used again for the upcoming CPR then that surely is unforgivable given the disagreement between ERC and GKP previous CPR findings.
If you ask the same company to do the same thing all the time it’s unlikely you will get much difference. Hence why I believe a different company should be completing the updated CPR obviously using historical data to support new research and findings.
I have posted to IR a couple of times in the last week or so and neither email has been responded too. I find the complete disregard for shareholders as absolutely disgraceful. I along with a lot of holders here have invested hard earned cash and the least we deserve is some communication.
I still believe in the asset just not this BoD.
GLA
I find it strange that GKP have used ERC yet on both occasions they have produced CPR’s GKP has disagreed with the findings. In any other situation in any walk of life you would surely not use them again you would use another proven auditor to validate and substantiate the findings.
I am sure there are alternative reasoning behind why they where used, however surely now is the time to put the doubt and mystery of what is actually contained within Shaikan by using another company to produce the next CPR.
Btw another payment should drop anytime soon, wonder if there will be any update regarding the missed target of agreeing the 2nd PSC amendment!
GLA
Nice to see a sustained rise although we need to get back to at least 3 ideally before any significant news drops. I would expect another payment either later today or Monday and hopefully an operational update shortly after.
As suspected not a word from our illustrious BoD.. I thought the change in chairman would have improved communications, clearly not.
All I will say is as a long term holder and sufferered the pain like a lot on here I am more confident than ever we will at least get a proportion of our money back at some point. At one point it looked like we would lose everything through the greed, mismanagement of numerous people who have passed through the company.
Personally I am not after a quick sale I would much rather see the full value be realised for us shareholders. Either way I suspect 2019 could be a big year for us.
Hope you all have a happy and healthy new year!! GLALTH
My understanding is that the current 58% working interest is based on the MNR contributing to the development and caped costs which they haven’t hence the buy back in option as part of the 2nd amendment of the PSC. So either way the result will be a further uplift based on:
A) the MNR paying the unpaid back in costs
B) Confirming GKP WI is increased to 80%
It’s a win win for GKP either way hence the anticipation of the amendment.