Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
After my Gulf Keystone (GKP) piece last week (HERE) drew the predictable furious response from Winnifrith (HERE), I’ve been looking into the company’s numbers in a bit more detail. There’s no denying that Gulf is teetering on the edge. However, it is not dead yet. Although it has little to no room for error, so long as the Kurds keep up their regular payments, it is possible that Gulf will be able to pay down its debt and refinance its balance sheet by April 2017. A broker note found its way into my inbox today, broadly supporting this view. It contained some interesting observations on Gulf’s debt position worth sharing.
I would mention which broker released the note, but this firm has been unnecessarily pissy with ShareProphets in the past about publishing its work. No doubt, the note is circulating on the Internet, but the key points about Gulf’s debt are as follows:
For Gulf’s shareholders the risks are clear. This has the potential to be another Afren if anything serious goes wrong.
So much depends on the Kurdish Regional Government (KRG) maintaining its regular payments. To be honest, the company probably needs the Kurds to increase those payments, but if there are any further delays Gulf has very little in reserve to act as a buffer.
It is now 17 November and we haven’t heard whether or not the KRG has issued another monthly payment. It should have done by now, so it is little wonder that Gulf’s share price closed down at 25.75p last night. My risky punt of last week grows ever riskier.
Never miss a story.
This area of the ShareProphets.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ShareProphets.com. ShareProphets.com does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ShareProphets.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ShareProphets.com and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.
Search ShareProphets |
Stock market news |
Recent Comments |