Gulf Keystone Petroleum Share Discussion Threads

[giant_canine] 28/6/2022 13:21

Debt is less expensive than equity because it is less risky since interest payments have priority over dividends and debt holders are paid back prior to equity holders in the event of bankruptcy. Debt is also cheaper than equity because interest expense acts as a tax shelter while dividends are paid out of after-tax income. Optimal capital structure theory does suggest a limit to the amount of debt a company should employ in its capital structure. Companies with consistent cash flows can tolerate MORE debt in their capital structure while a company with volatile cash flows will have less debt and more equity in its capital structure. ============================== So a company apparently staying independant about to embark on a 1 bn dollar capex expansion , that has huge consistent FCF ........... decides to not bother ....LOL ............... HTTPS://twitter.com/GoodnightCharl1/status/1541324775594893316?s=20&t=hSAtPWbAQCx2Ky3-gi7uow

[giant_canine] 28/6/2022 13:21

Turvart - check out all the biggest oil producing companies in the world. They ALL use bonds plus equity to finance their businesses. GKP no longer needs to obviously. ' Turavrt - they already have it right! If they selling up - then pay off the debt from internal funds, it adds around 40p/share to profits for shareholders on that sale. ............. If you intend to be a going concern its bonkers. So they obviously dont

[goatcam] 28/6/2022 13:19

LOL. Turvart - Paul's been wrong about so so so many things over the years, and he'll be wrong about his conspiracy for paying off the debt.

[giant_canine] 28/6/2022 13:19

Debt is less expensive than equity because it is less risky since interest payments have priority over dividends and debt holders are paid back prior to equity holders in the event of bankruptcy. Debt is also cheaper than equity because interest expense acts as a tax shelter while dividends are paid out of after-tax income. Optimal capital structure theory does suggest a limit to the amount of debt a company should employ in its capital structure. Companies with consistent cash flows can tolerate MORE debt in their capital structure while a company with volatile cash flows will have less debt and more equity in its capital structure. ============================== So a company apparently staying independant about to embark on a 1 bn dollar capex expansion , that has huge consistent FCF ........... decides to not bother ....LOL ............... HTTPS://twitter.com/GoodnightCharl1/status/1541324775594893316?s=20&t=hSAtPWbAQCx2Ky3-gi7uow

[turvart] 28/6/2022 13:17

It does make sense to pay off the debt, I remember many small oil companies in March/April 2020 when the oil price dived and some of the astute companies had oil hedged some didn't and they struggled to pay their debt. If I win the lottery I won't pay off my mortgage, that's what your basically saying LOL.

[giant_canine] 28/6/2022 13:17

Turavrt - they already have it right! If they selling up - then pay off the debt from internal funds, it adds around 40p/share to profits for shareholders on that sale. ............. If you intend to be a going concern its bonkers. So they obviously dont

[goatcam] 28/6/2022 13:17

LOL another copy and paste job by the board's resident nutter

[giant_canine] 28/6/2022 13:14

Debt is less expensive than equity because it is less risky since interest payments have priority over dividends and debt holders are paid back prior to equity holders in the event of bankruptcy. Debt is also cheaper than equity because interest expense acts as a tax shelter while dividends are paid out of after-tax income. Optimal capital structure theory does suggest a limit to the amount of debt a company should employ in its capital structure. Companies with consistent cash flows can tolerate MORE debt in their capital structure while a company with volatile cash flows will have less debt and more equity in its capital structure. ============================== So a company apparently staying independant about to embark on a 1 bn dollar capex expansion , that has huge consistent FCF ........... decides to not bother ....LOL

[turvart] 28/6/2022 13:14

GC, Maybe you should be on the BOD and tell all the others they have it all wrong LOL.

[pensioner2] 28/6/2022 13:14

I wasn't saying they can't, GC, I was saying it doesn't make sense for them to do it.

[giant_canine] 28/6/2022 13:13

Oh I see P2 - Gcam suggested it ...quelle surpris?

[goatcam] 28/6/2022 13:12

easy - they make turkey stop the pipeline.

[pensioner2] 28/6/2022 13:10

You have an underline in your avatar. :-)

[giant_canine] 28/6/2022 13:09

P2 I never mentioned Baghdad stopping exports ??? How on earth could they or would they?

[giant_canine] 28/6/2022 13:07

GCam seems very agitated - no doubt being super bullish - Broadfraud even more so. LOL

[pensioner2] 28/6/2022 13:07

I don't see Baghdad stopping oil exports from anywhere, GC. They are desperate fill their OPEC quota, which they haven't so far, and the yanks want peace between north and south and as they're paying the bills... However, tribal friction sometimes seems to override common sense in this country.

[giant_canine] 28/6/2022 13:04

P2 - it was not the bondholders that shafted the company. It was RAK. Remember they borrowed around 525m without ANY income to develop Shaikan. The fact they not borrowing when they have huge , consistent earnings , that now come early :) - a great covenant BTW for Kurdistan ,tells you they dont need any working capital or buffer. We will just pay it all off - reduce our cash in hand too the lowest since 2016- forget the new 1 bn capex we need for the FDP...... LOL

[goatcam] 28/6/2022 13:02

why are you copying and pasting the same stuff Paul, we all saw it the first time.

[giant_canine] 28/6/2022 13:00

Turvart Debt is less expensive than equity because it is less risky since interest payments have priority over dividends and debt holders are paid back prior to equity holders in the event of bankruptcy. Debt is also cheaper than equity because interest expense acts as a tax shelter while dividends are paid out of after-tax income. Optimal capital structure theory does suggest a limit to the amount of debt a company should employ in its capital structure. Companies with consistent cash flows can tolerate MORE debt in their capital structure while a company with volatile cash flows will have less debt and more equity in its capital structure. ============================== So a company apparently staying independant about to embark on a 1 bn dollar capex expansion , that has huge consistent FCF ........... decides to not bother ....LOL

[goatcam] 28/6/2022 12:59

correct P2, especially if Baghdad's court cases end up stopping the KRG from exporting oil... GKP need that debt gone

[pensioner2] 28/6/2022 12:53

It's called learning from experience. Bond holders have sha*ted equity once before in this company. Once could be bad luck. Twice would be bad management.

[giant_canine] 28/6/2022 12:51

CONDOG must be stirring across the pond..........

[giant_canine] 28/6/2022 12:50

HTTPS://twitter.com/GoodnightCharl1/status/1541463780072235008?s=20&t=CrZ4nznBQDP0_JSTrRJLfA

[giant_canine] 28/6/2022 12:49

Turvart Debt is less expensive than equity because it is less risky since interest payments have priority over dividends and debt holders are paid back prior to equity holders in the event of bankruptcy. Debt is also cheaper than equity because interest expense acts as a tax shelter while dividends are paid out of after-tax income. Optimal capital structure theory does suggest a limit to the amount of debt a company should employ in its capital structure. Companies with consistent cash flows can tolerate MORE debt in their capital structure while a company with volatile cash flows will have less debt and more equity in its capital structure. ============================== So a company apparently staying independant about to embark on a 1 bn dollar capex expansion , that has huge consistent FCF ........... decides to not bother ....LOL

[goatcam] 28/6/2022 12:48

"while a company with volatile cash flows will have less debt and more equity in its capital structure." I still consider the KRG to be dodgy payers.... having 0 debt is important when your only customer has a terrible past record of paying.