Gulf Keystone Petroleum: New Payment Analysis

DISCLAIMER: I don't have a licence to give financial advice,etc, therefore none of the below is to be viewed as such advice.


Morning,


As we found out last night, the Kurdish government is expected to begin the repayments to oil producers in the near term:


@ashm_ya: #Kurdistan govt. is expected to spend $150mln per month on repayments to oil producers in the #KRG & spend up to $700mln on govt.expenses


If we assume that this intention is correct and that this does indeed happen over the coming months, then the significance of these payments across all of the companies operating in the region will vary due to many factors.


For shareholders and traders, we must look towards the market capitalisation of these companies in relation to the potential payments they may receive:


e.g.


£5 million as a percentage of Gulf Keystone's current market capitalisation is 1.47%, whereas the same figure as a percentage of Genel Energy's market capitalisation is a mere 0.38%.



In simplified terms, a payment to a smaller capitalised company is more significant than that of the same payment to a larger capitalised company, which in turn makes Gulf Keystone Petroleum (for me at least) a continued buy at these levels and above across the short and medium term.


Enjoy,

The Masked Stock Trader