Tribe Technology set to deliver healthy pipeline of orders from Tier-One miners. Watch the video here.
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Delighted to see today's press release: reading between the lines it's somewhat obvious that the dividend will be restarted in H2. At these levels, however, I'm also in favour of share buybacks.
To the numbers:
- Current FCF is over +$7m per month which is far and above my assumptions. Standing on the hills of margin of safety, I'm keeping my estimates of $4m FCF per month.
- Net cash at $98m which gives us a enterprise value of $229m
- With a closed pipeline we pay approx. ev/fcf 3.7x and if the pipeline opens we will produce approx. 80-90% of enterprise value in a single year (as we've done previous years)
- Dividend yield 5-10% in H2? It will take 4.5 months of FCF at $27 oil price (closed ITP) to give GKP a dividend yield of 10%
Updated sheet: https://i.imgur.com/1i27iXB.png
Still one of the best risk/returns out there in book. Disclosure: long since 90p
Back up nicely into profit for me ...... :-)
Sales per day 48,000 barrels @ $27
Not bad at all.
Let’s be honest they are making nearly $8m a month with no resolution to pipeline then the end game price whether pipe opens or not is going to be a lot higher.
As Roggamer says patience is required
Atb to all shareholders.
The company has c.$100m in cash.
At the current level of local sales (at the slightly disappointing average of $27 per barrel) the company is generating cash of just under $8m per month as follows:
Sales per day 48,000 barrels - breakeven 21,000 barrels (both rounded) x $27 rate per barrel x 36% entitlement x 30 days = $7.873m per month.
Just over a month to fund the share buyback.
If this level of activity continues it will take just over a month to replace the expenditure on the share buyback & to maintain a cash buffer (safety net ) of $100m.
The RNS hints at further share buybacks and/or dividends in the future, which might now happen a lot sooner than I had originally anticipated.
Despite no sign of the pipeline re-opening this is a very encouraging RNS.
What it will do to the share price is uncertain.
The share buyback, cash position & current production levels are all very positive.
Nice RNS should get the Sp back up int the £1.30 range at least !!!! should see steady buying over the next few weeks
Ah sweet $10m buyback. That will improve Mr Market’s sentiment towards the cratered share price. It’s not a huge amount but a grand gesture of confidence.
PUTUP was always a proponent of buybacks but I was not, until the price collapse on the ITP shutdown.
As I said previously, at this level the buyback is surely value accretive. But what if the situation worsens contrary to expectations? Well we’d never see that $10m anyway so go ahead with it, and more.
And if they execute at this price its about3-4% of stock buyback
Exactly
at this point with share price so low i think this is the best solution all round
Any thoughts on how much this news will move the sp upwards?
I'd be surprised if turkey pays anything bar a few envelopes and a promise to work out some reduced payment thats soon forgotten
Belg, your item #2:
Turkey still liable to pay the fine for transporting the oil illegally, but Erbil did the actual exporting, and received the payments - so are they liable too ?
As you State correctly, Erbil continues to defy State law by exporting meanwhile, but that appears to be acceptable (Ankra must wonder why they are being fined when Erbil are not).
OK they wriggled, delayed and avoided paying us some of the invoices (but that will be glossed over of course).
Where does the buck stop around there, one wonders ?
Nice to hear from a few sources that talks are ongoing to restart crude pipeline flows to Turkey. (Although I still hold my breath there)..No what else may have caused the change of heart in Baghdad..Few things actually come to mind.
1. Requirement to get water from Turkey...thats not new but dry season looms.
2. News filtering through or leaking out, that a great deal of Kurdish crude is currently being exported...This is terrible for them as they get nothing at all and its still getting to international markets. So in effect even though they won the court case, and the KRG agree that SOMO gets to control purse strings of everything via pipeline, if nothing in the pipe, thats what they get.. Plus penalty for no flow , actual loss to Baghdad 12B and counting already. Far better to have flow and control the purse strings even if you pay out 46% or so to the IOC's.
3. its already into international markets, so above board with SOMO, makes no difference at all, just stops KRG or whatever warlord is controlling from trousering all the profit. Turkey must also be doing very well already.
4. Got to do it now or pipeline deal will expire in just over a year and they will lose opportunity to control main source of Kurdistan wealth.
Just a slightly different way of looking at things, but does show more light from end of tunnel.
No investor here should get spooked or worried about Iraqi OPEC quotas, even if it comes from Iraqi officials trying to scaremonger, least of all investors trying it on....... why?????
Thats for years Iraq has consistently failed to even achieve its current 4 quota, with saudi taking up the slack and producing well into double figures despite on paper having half the population of Iraq. They have grown wealthy on this income while Iraq has struggled. They now use the excess wealth in other projects and worldwide investments.
In fact those quotas should in fairness be reversed now Iraq after mainly years and help by companies like ours and the IOC's, to improve its fortune.
The fairness of say having an equal quota to Saudi, or even more is clear to all when you look at history and need for income to fund essential projects like water distribution and electricity via home produced gas consumption.
Will the Saudis like it...of course not, but none will say its wrong.
The licenses you referring to: if the IOCs are able to find oil there, and if it have the economics, and if they choose to finally invest; first oil is probably 2028-2029. The oil minister, on the other hand, was referring to H2 2024.
I hope so, but it may be from different oil fields
https://www.reuters.com/business/energy/iraq-launches-oil-gas-licensing-round-29-projects-2024-05-11/
Iraq preparing for Kurdistan exports?
Reuters today:
Iraq won't agree to new OPEC+ oil production cuts, oil minister says
Asked by a reporter whether Iraq would agree to extend the OPEC+ voluntary cuts at the meeting scheduled for June 1, Hayan Abdul Ghani said: "Iraq has reduced (output) enough and will not agree to any new cut."
Somebody tell Sleepy Joe that the cessation of pipeline exports is only about corruption, pilferring and personal gains - if he thinks that the general population sees any of his naive US aid packages $s - he really is sleeping.
CUT off all aide until exports recommence - then we may see action.
An Hour ago
“ Oil companies expect more US visits to Iraq about Kurdish exports”
https://www.rudaw.net/english/kurdistan/110520241
@alexelaisson, you are misrepresenting the order of events.
You posted about FCF and a PSC wrt to DNO and used it to cast doubt on someone else’s analysis wrt GKP’s going forward.
For some reason you did not name the person who you thought was wrong- why not?
Did they provide you with data, methodology and reasons for drawing their conclusions in a readily accessible form?
If you name them we can check and then it would be up to you to do the same.
There are a number of posters who always post up the necessary detail and encourage others to take apart their reasoning and conclusions - basic scientific method at work.
Some of the conclusions are not positive enough for some but if the thinking is sound…
Admittedly, I've only been part of this board for one month and a half - so I don't know all the ins and outs of the jargong that you use. With that said, I argue that DNO have FCF producing assets in Kurdistan based on public disclosures. Here's a link to the Q1: https://www.dno.no/media/gh5nmsva/q1-2024-interim-results-report.pdf
You ask me to "proof" what's stated in a public disclosure; with all due respect, if you argue anything is wrong in a public disclosure the burden of proof is on you - not the other way around.
@alexelaisson, I was hoping for evidence that the FCF you were referring to was generated solely by their Kurdish projects.
Then I wanted to see how you had taken the raw data which feeds into their current PSC and how it generated the receipts and then the CO and PO and finally the FCF.
If everything matches for a PSC like this one which is functioning normally and it doesn’t fit with what another posters implies will happen to the Shaikan one when it normalises, we could look for the anomaly.
Since that was the basis of part of your post I.e. throwing doubt on their analysis/motivation, I assumed you would have all the necessary numbers ready if you were questioned about it.
While I will admit that I have been waiting for the one event that would have had a massively positive effect on GKPs share price, no need to say what that would be. Waiting and waiting for far too long. I am nevertheless encouraged by the words that DNO are saying with regards to the increasing world wide demand for their oil. This is clearly indicating that a route, probably overland tankers via Turkey, has been established, probably Erdogan’s agreement with Kurdistan and some money finding its way to those that have the power. This brings us to the ability of our management to do something similar in terms of an ‘local’ oil price that is as profitable, and personally I’ll be very disappointed if they don’t achieve something similar, especially as they will portray themselves as being failures by comparison with DNOs management.
As share holders, the owners of GKP, we can collectively dismiss them if they fail by comparison with DNO. Therefore I will expect the next R N S to be positive.
Can we now hope that some of the profits will be distributed by the way of a dividend?
P.S. I’ve been waiting to buy at the sub 90p share price that was so confidently predicted by those pessimistic posters (Isaponzi in particular) Haven’t heard from him recently. Do I wonder why? No, not when the shares are 120 and trending up.
Not really following what you're saying. DNOs North Sea assets are currently draining cash (investment) and their Kurdistan assets are bringing in the free cash flow. As it's a public company you have all the details in their filings.
@alexelaisson, where are those profits and free cash flow coming from, they have a much more diverse portfolio than GKP?
Have you extracted out the contribution from the Kurdish projects and linked it to their current PSCs, that were enhanced as part of the previous debt recovery?
If so, can you post up the figures so we can compare the outputs with the Shaikan PSC?