Headlines
• Gulf Keystone Petroleum (LON:GKP) – Welcome Payment, But Bigger Things to Worry About: While the slow payments are frustrating, we don't think the oil companies will complain, especially as the alternative, where ISIL are in charge, is a nightmare scenario where they get nothing at all.
• Nostra Terra Oil and Gas (LON:NTOG) - East Ghazalat Acquisition Completed: Despite our questions over the asset’s profitability, we are optimistic that any issues will be addressed, and that East Ghazalat will make a positive contribution to the Company.
News Items
Gulf Keystone Petroleum (LON:GKP) – Welcome Payment, But Bigger Things to Worry About
The Company has today disclosed that it has received ~$12mm from the Kurdish government for its crude sales. While helpful, the Company is still owed $~$280mm (as at June 2015), which would go some way to shoring up its balance sheet.
Under ordinary circumstances we believe that there would be a realistic expectation of receiving the outstanding amounts in short order. However, there is the small matter of the fact that Kurdistan is locked in battle with ISIL of the survival of the country, which requires resources.
While we don't doubt that the Company will be made whole, as will all the operators in the region, we believe that there will be some measure prioritisation of cash needs, and the back payments may well come low down on the list.
While the slow payments are frustrating, we don't think the oil companies will complain, especially as the alternative, where ISIL are in charge, is a nightmare scenario where they get nothing at all.
Nostra Terra Oil and Gas (LON:NTOG) - East Ghazalat Acquisition Completed
The Company has today announced the completion of its acquisition of the 25% non-operated interest in East Ghazalat. As we said previously:
While we appreciate the drive towards cash flow, and after all, cash is king, especially in difficult operating environments such as these, we will have to wait until the financials are made available before we can understand the impact that this acquisition has on the Company overall.
and for us, today's news will initiates the clock on awaiting the news on just how profitable these barrels either are, or could be.
Despite our questions over the asset’s profitability, we are optimistic that any issues will be addressed, and that East Ghazalat will make a positive contribution to the Company.