TIP: If you would like to change the chat view, you can choose between message view or thread view, look out for the green button on the chat pages to switch.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East and have access to Premium Chat. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
At the close G’s sp was clinging to its 3x ratio to Brent $/bbl and also to the trend line that the buyback scheme just managed to perch it back on. Since then OP has taken a bit of a fall, with LCO futures possibly heading for $64 as I type. I’ve reverted to LCO as it’s the most commonly quoted Brent benchmark - OANDA and XBR crude prices usually track it very closely on a percentage basis but are up to $1.5 different in absolute terms, especially at the front month roll-over date.
The three amigos all took a dive together - ahead of OP, so word must have been out, I guess, and there may be more drops tomorrow unless it turns out to be a brief glitch.
As we are just a day into the week here's six day's worth of the 15' tick G v Brent with GKP and DNO to provide some fair comparisons. GKP's buyback going steady it seems. https://invst.ly/b9o1m . G's sp ratio to Brent is just on 3 - my benchmark for 'average' performance. That means it has been much worse and, equally it has been much better - 3.2 to 3.4 is the kind of range we saw earlier in the year and that's what you need to have any chance of getting near 230p.
H : Without Genel being propped up this last week or so I wonder where we would be?
Boyo: Still can't be Rsed with the charts eh H? According to tonight's first chart, the answer is 5% down on the 24/6 closing price (177p), ie 168p just like GKP and DNO over the same period. So, yes, we are 30p up on what might have been. Good old G eh?
I can't fault your logic about selling a few tomorrow H, but mind how you go - the sellers might come out from under their rocks in bigger numbers tomorrow as the clock ticks towards cutoff - which may come early given the rule you highlighted today. It's why I sold a trading tranche today rather than wait. Because the buyback process has kept the price range really tight, I was going to set a 198 limit order but when I logged in to my account I got an offer just a fraction of a p over so I sold immediately. I hope the sp doesn't drop back but hope alone doesn't earn bucks.
I'll be happy to trade the next wave even if the price has gone up, as long as I can spot and buy at the bottom. This is quite tricky with G because of the instability of OP, upon which it is sooo dependent! The chart can look great but then the EIA figures or a Trump tweet can kick the table over.
Im selling a few late tomorrow as I think there is a real chance without support it will drop next week.
Without Genel being propped up this last week or so I wonder where we would be.
Long term we will shine but next week ....Could be tricky in my opinion.
My thanks to H for pointing out the rule limiting buyback volume - I guess most of us would have curtailed our ambitions for the sp had we been aware of it. The outcome, as we reach the last day is, however, satisfactory as far as I’m concerned, even if it didn’t quite hit my trading target (which was 206). I consequently sold off a smaller tranche - which I’ll buy back if there’s any fall next week, although I doubt the opportunity will arise given the way this has run.
G v Brent 15’ chart from start of buyback: : https://invst.ly/b6eec
G progress this year v Brent, looking healthier: https://invst.ly/b6ef5
G and the others from Peak OP in October: https://invst.ly/b6ej5
G is now back to ‘respectable’ in the sense that it needs to be above the Brent line in order to be matching or doing better than it was when Brent hit $85, the bigger the gap the better obviously.
Gsp/OP$ ratio is currently around 3.1 (about average for this year) and would equate to an sp of 230p for an OP of $75.
A pity that OP didn’t play ball today because $67 Brent x3.09 = 207p which would have made a nicer close than $63.7 x3.09 = 196.8p. But the important thing is that the Buyback plan continues and the G v Brent ratio, if not the raw sp itself, continues to strengthen. Let’s also hope that Brent will continue to stay above $61 and the long term trend line here: https://invst.ly/b5p34
As I’ve discussed on another thread, evidence of the buyback effect is plainly seen here on G v Brent for the week, where GKP appears as a ‘non-buyback’ comparison to demonstrate how G might have moved (15’ ticks): https://invst.ly/b5p2t
Here’s how G is performing against Brent since Peak-OP in October: https://invst.ly/b5p1l
And all the rest from Peak OP in October: https://invst.ly/b5p5p
Looks like the objective today was to accumulate up to about 198 and hoover up as many sellers as possible at around this level - nominally the 197 resistance, although such levels are invariably +/- a couple of p as the price either gets knocked back below it or perches upon it for a while before continuing.
Bear in mind that those who would have sold at this level but choose to hold out for more might simply join a bigger queue at the next level shift (if there is one) and subsequent fall-back.
The week so far v Brent (15’ ticks): https://invst.ly/b5c74
There’s a strong pattern of ‘step-up’ followed by one or two days of fall-back or consolidation (1 hour ticks): https://invst.ly/b5c7u
The rest of the field since October Peak OP: https://invst.ly/b5c89
G certainly not looking quite so cheap now by comparison with the others. At this rate 204 looks like a possible destination - and a few FC contenders tightly packed around that number, with JL in pole position.
Loving that chart Boyo and fingers crossed it will fall that way. I know there were many against the Buy backs but currently they do seem to be working.
Slowly slowly catchy monkey.
Keep a slow steady rise and then a blast just before the update...Taq Taq, Bina Bawi, Early Sarta progress, new acquisition any or all of the above and then................
Today’s 15’ chart v Brent from last Friday’s close includes GKP and DNO so that we can get a better feel for the G-specific effect of the buy-back process. A good measured pace I’d say, building and consolidating each step without spraying cash at the market.
A third of the way into the process and neatly perched on the broken trendline in this long-term chart - with any luck heading for the next: https://invst.ly/b4dr1
Should be a solid platform upon which to add some good news in August.
The rest of the field since April $75 OP: https://invst.ly/b4dmx
Correction: The ratio of Gsp (p) to Brent ($) was 192/66.5 = 2.9 at today’s close. Virtually unchanged from yesterday
Here’s the 15 minute Brent v Genel since last Friday’s close, G is up 8.7% - about a third of which was achieved today - whilst OP is up about 2% over the period - most of which was today
The ratio of Gsp (p) to Brent ($) was 192/65 = 2.9 at today’s close. Virtually unchanged from yesterday
Here’s G and the others since the OP Peak near $75 in April: https://invst.ly/b406l
I guess the buyback process might be rather like fishing - not that I’ve ever tried my hand at that - catching as many as possible with the minimum of bait.
It seems reasonable to suppose that the price curve will flatten out as the buyback proceeds, with each increment teasing out progressively more sellers and consequently absorbing more cash. - In this rather artificial period perhaps getting G securely onto the 197 level would be an early objective, with 203 and subsequent resistance levels targeted if they can be consolidated within the time and cash constraints. Shifting G from sub 170 to a solid base around 200p with OP at $65 would correct a lot of the damage done since 1st May:
Here’s the recent pattern on a 15’ view: https://invst.ly/b40ur
Tartine mentioned the risk of a soufflé effect (drop back) at the end of the buyback period and I guess there is that risk if the buyback isn’t managed correctly. But let’s assume that it goes to plan and that G progressively achieves a stable new price threshold after absorbing the majority of investors who are inclined to sell below it. What level might G want to establish?
It may be worth looking at G’s most recent best in relation to OP, which would be 230p against $72 that’s a ratio of 3.2 (chart below). At $65 Brent the proportional sp would be 208p. Given that G’s sp decline started immediately after reaching that level at the end of April it would not be an inappropriate target and $10m might well be sufficient ammunition to achieve it (bearing in mind that the cost of the buyback will rise non-linearly as more sellers come forward at higher levels of sp). The apparent flaw in this rationale - that 230 was a ‘high’ rather than a ‘low’ - would allow for some drop-back after the buyback completes - maybe to 200 or so.
I find the rationale for putting G back into the 200+ price range quite compelling - although 210+ would obviously be nicer - but if either of these strikes you as too low then the absolute best ratio that G has recently achieved against OP has been 3.5x which would place the best probable sp for $65 Brent at around 227p. I rather think that, even if it could be achieved, it would trigger a soufflé effect when the buyback stops as increasing numbers of investors might contemplate selling near the 230 resistance level.
cheers Boyobach, always a pleasure to read your posts and many others on this board. We are after all looking to gain something from all this. I have been going back through the last 6 months RNS's and i believe this is now the start of a well worked out plan. Divs for the ii so they hold, buy back of stock so the players have less stock to manipulate. A concerted effort towards drilling and expatiation , tie up with Chevron. We are now a lean mean production company with no debt and plenty of "material growth potential" you sell now you might never get back in lower. Now that's a conundrum .
Cheers Leem1. I share your frustration here sometimes, you have a moan and I bash out silly charts - it all amounts to pretty much the same thing.
Grrr - G apparently started as an entity worth around $4bn = £2.5Bn .
Would be good if I got my $ and £ the right way round!
From last post: 'How much did G start with? Rather more I think.'
Looks like it was around $2.5Bn according to this by Garry White from the Telegraph 07 Sep 2011 :
Vallares, the oil investment vehicle floated by Nathaniel Rothschild and Tony Hayward, is expected to announce a merger with Turkish oil giant Genel Enerji as soon as Wednesday, in a deal that values the combined entity at $4bn (£2.5bn).
People have claimed Boyo is a deramper at times, but he appears pretty switched on and more cautiously optimistic than some of us. Also makes some very fair and balanced points and backs it up. I also get criticised for moaning, todays buy back may only temporarily provide share price support but it’s exactly what was needed. Sentiment had taken a turn and this vote of confidence is a good first step in attempting to put a line underneath the weakness. Credit to the company for doing it and it demonstrates they are willing to take action. Whether or not you think a buy back is sensible is another discussion, but it does show a degree of confidence. Have to see how it plays out but personally think it is a smart move
Cheers Comeonvog and JackSalad
To be fair, I think 10 years would be a good run, they could accumulate maybe $2Bn if they just banked it couldn't they? How much did G start with? Rather more I think. They are sure to use the cash - and we expect them to - but hopefully a bit more astutely than some previous buccaneers on the board. No more expensive poking around places like Malta to locate some dust and sand, hopefully. There are risks - but let's see them shrewdly assessed. The early guys had grand ambitions and too much to spend, assumed Taq Taq was much bigger than it turned out, and went on an aggressive and fruitless campaign. They also assumed they were going to get paid promptly - no fault of Erbil: ISIS and Maliki put paid to that. Let's hope G is good for the Kurds and good for us too.
Here’s the 15 minute Brent v Genel since last Friday’s close, G is up 5.65% whilst OP is down a touch:
The ratio of Gsp (p) to Brent ($) was 187/64.5 = 2.9. Not quite 3 but an improvement nevertheless.
Here’s G and the others since the OP Peak near $75 of April: https://invst.ly/b3nx6
A cracking day by G’s recent standards - still a bit to go to catch Brent’s green line here though. Never mind about GKP - it’s strength v OP that counts.
This 6 month G chart: https://invst.ly/b3n-g shows the route and usual stopping places along the road to 230 and beyond. Holding 187 for starters then around 195-197, 203, 209, 218 - we’ve seen them all haven’t we?
It all hangs on OP staying in the $60 to $70 range, of course.
Genel has booked an initial 10 MMbbls of net 2P reserves relating solely to this preliminary phase of the project. Unrisked gross mid case resources relating to the Mus-Adaiyah reservoir only are estimated by Genel at c.150 MMbbls, with overall unrisked gross P50 resources currently estimated by the Company at c.500 MMbbls.
I think they have plenty of time to build on the 1P and 2P reserves. Sarta to kick in next year will help IMO
I think your right on the money with your 14.49 post.
I was only thinking y/day that they've got around 10 years of FCF and then resources depleted and that is why SP is where it is.
They really need something else for sure and at current production I don't see this going over 250 any time soon.
Best wishes and thanks again for you analysis and views - much appreciated.
Of course I've checked:
2P : 155 MMboe
1P : 99 MMboe
How many years do you make that at current production? I reckon 7-10. Would love to find I've underestimated. G has a good window of opportunity but it is finite.
Much depends on what G does with the cash flow, buying its own shares may boost the sp for a while but it isn't what will fire up the market properly. I didn't say gas had fizzled - I said the sp rise could fizzle. I said prospects for gas had evaporated - if a write down isn't an evaporation of near term prospects I don't know what is. Gas has been touted since 2011, certainly expected to be flowing by 2020 and knocked back again in last summer's H1 statement - the market doesn't like serial disappointers, which may be why G is 'undervalued' relative to the expectations of this board (which is a naturally biased group).
As a very long term holder I find it essential to manage my investment in G and that requires a fair understanding of why G's sp is where it is and what its realistic near-term prospects are rather than assume it's low because of something like a big conspiracy. I think it is undervalued but I'm not convinced that it'll get near £3 again on the basis of current activity and cashflow alone. Are you? Rhetorical question - only interested in your answer if it's got some numbers attached.