Back to earth It looks like Genel is heading back to earth: it’s almost down to the sort of sp levels it achieved in September 2017 when oil was cheaper, Genel was still in net debt rather than net cash, production and reserves were lower and there was an imminent military crisis between Erbil and Baghdad. Interesting. image.png1048x586 55.3 KB
Where next for Genel? It’s often useful to compare Genel to other factors and players, especially after a disappointing week. Here’s how it’s doing v PoO, RDSb and GKP. The market has obviously been a bit harder on the small KRI companies in this ‘down’ week… image.png1048x554 53.9 KB
Nice Earner Since the last post, Genel has settled to a lower level of 240p +/- 20p. However, the sp has been trading within a wedge pattern (blue in chart), the upper boundary of which goes back to May, and the lower limit is currently being tested at around 220p. Although last weeks trading update was good, it remains to be seen how the price will move as the wedge tightens image.png1048x569 49 KB
And you thought the Water was Safe to Enter In the two Screencasts are all the DMM’s that are on the Trading Book of Genel Energy The DMM’s on every “trading Book” contain at least one Corporate Broker sometimes two, and they are commonly called a House Broker/s. There are employed by the Company to liaise or “go between” the Company and its Institutional & potential Institutional Clients, Buying and Selling for them. The rest of the DMM’s comprise of at least two DMM’s who work as “go between’s” between Retails Brokers and the Market, so that every OT passes through that DMM/s. With Genel & GKP it is WINS & SCAP with either both or one working depending on the work load The remaining DMM’s are on the Book representing their own Investment Bank Clientele and they will Buy and Sell on behalf of their own Clients and any other Clients they have All the DMM’s working the Shares Markets are attached to Investment Banks Screencast.com 2018-10-15_0900 Shared from Screencast.com Screencast.com 2018-10-15_0900 Shared from Screencast.com Please count and list them yourselves. Beside the above “visible” DMM’s, (Designated Market Makers) are several MM (Market Maker) Liquidity Providers, who are invisible to Retail Level 2 users. The MMLP’s also belong to Investment Banks and are Specialist Liquidity Providers. [link] London Stock Exchange Group The Role of the Liquidity Provider John Keogh, Managing Director of Susquehanna International Securities, explains the role of the liquidity provider, the life Then besides the visible DMM’s and invisible MM’s there are more MM’s who are also invisible to Retail Level 2 users. This third tier of MM’s, (Market Makers) consist of other City Entities including semi Professionals traders using their Brokers DMA who are generally CFD users, who trade various Stocks when and if they please, coming and going when it suites them. While they mostly belong to Investment Banks they can belong to any City Entity, including Hedge Funds and other City Financial Entities. The above three tiers of Financial Entities are mainly Investment Banks, and along with other City Entities all Pay the LSE a Fee to trade the London Stock Exchange’s various market segments, with the DMM’s ranking at the top paying the highest Fee and gaining the most Powers from the LSE, followed by the Liquidity Providers with lower Fee’s and less Powers down to the plain Market Makers at the bottom paying the smallest Fee’s and gaining the least powers. “But” through the use of Short Selling and Specialised Algorithmic Programs, a plain Market Maker belonging to a Hedge Fund can be a potent force in the Market One thing all the tiers of Market Entities have in common, is the use of powerful Algorithmic Programs which are provide by Company’s like Fidessa. Fidessa provide "Specialised Algo Bots " built to each Entities own requirements, with Buy Side and Sell Side Algo Bots, specialised DMM Algo Bots and Liquidity providing Algo Bots and no doubt Short Selling Algo Bots for Hedge Funds. They even provide CFD Brokers like IGIndex lower grade cheaper Algo Bots for [link] [link] [link] With Stocks like Genel, GKP and other popular Retail Stocks, it is the DMM’s & MM’s and other Market Participant’s continuous Order processing & routings of Buying, Selling, & Shorting that causes the movements in the Historical Charts we look at online. Happy swimming
Where next for Genel? An interesting week for Genel as it battles some apparent disappointment even though the trading update was perfectly good. Perhaps some people expected more? Hard to see why. Anyway, chartwise it seems to be in a wedge pattern that has some history behind it. The lower line resonates with a trend last October, post the KRI referendum, when Genel was recovering from the uncertainties and damage to the sp that that event caused. Maybe that gives the line some pedigree in terms of how strong it may prove? Who knows? It’s hard to imagine Genel doing anything other than going north in the long term.
Where next for Genel? Boyobach: Whether the company’s update on 10th October will inject some spark remains to be seen. So the update has been given and, as I’ve said on another board, the CEO says all we need to know in one line: ‘With notable opportunities in the portfolio, Genel is well positioned to generate significant shareholder value.’ This says two things: The company hasn’t yet generated significant shareholder value. It has opportunities to do so in the future but will need to grasp them. The market price is currently based on the first of those having got rather ahead of itself in May. Hopefully G will now establish a new low point at around 247 as opposed to 227 or 217. That would put a successful assault on 257/260 back on the cards. It’s early days on that. Alternatively, the ‘quick buck’ brigade may conclude that there’ll be nothing much to see here for a while and sell up, driving the price back down in the short term.
Where next for Genel? Boyobach: Genel’s sp seems to have hit the buffers. Is it even on the brink of falling back? Following a fairly meteoric rise until June, Genel’s sp has certainly levelled out at about 50p less than its peaks of June and August. Maybe, with most of the future prospects now widely known, the market is taking a more measured view and only pricing Genel according to actual, banked results. The future does look good but perhaps the spectacular rise seen earlier in the year has run its course. This week, despite oil at four year highs, Genel has disappointingly failed to break 260p and today is currently retreating into the 240’s. So, although it’s currently on a positive track, it doesn’t look set to resume the rate of increase seen in H1. Whether the company’s update on 10th October will inject some spark remains to be seen. The following chart shows the pattern that seems to be emerging, with apparent resistance lines in pink, trends in grey and, in the absence of any stimulus, my view of the likely path ahead (shaded). image.png945x836 58.9 KB
Reasons to be cheerful Oil production increasing every month. KRG payments now a given. New Iraqi government with major Kurd involvement nearly formed. Peaceful Kurdistan electioneering leading to end of Sept election. Iraqi paying some Kurdistan salaries. ISIL defeat Oil issues worldwide increasing oil price (Venezuela & Iran) OPEC happy for oil between 80-90$ a barrel Worldwide demand much higher than anticipated touching 100m BOPD API drawdowns regular and Worldwide oil glut now gone Future oil shortfall now very likely due to historical lack of investment. Rosneft has lent KRG up to 3$ billion, building several Gas pipelines Rosneft involved in massive exploration & development projects. New Chairman, New World class CFO, New Dynamic COO Payment increases due to payment “R” factor worth over 400$ million Free Cash huge for a company our size Over 70% of all shares owned by only 5 major institutions. Some of lowest Production cost in the world. Market cap 3ish x less net assets. Debt free as early as November. GKP, Gazprom, Shamaran, Rosneft investing billions of dollars in Kurdistan Peshkabir producing over 36k BOPD, 50k end of year expected. Peshkabir 6,7 tested and likely on production, 8 drilling, 9 due to spud any day. Peshkabir 1P and 2P increase almost certain. Every 10k BOPD production from Pesh worth 2$ million per month to Genel. Taq Taq TT29 new oil find confirmed, Production stabilised with minimal work Taq Taq 32 drilling shortly and production increased expected by company. Tawke expected to increase production from current levels. 8 newly drilled wells on production by end of year. Bina Bawi & Miran updated CPR showing huge increase in resource +27% + 78%. Bina Bawi oil now major focus, easy win and production within 6 months of drilling. Bina Bawi FDP now submitted to KRG. Intensive discussions under way. Bina Bawi barrel of oil worth more than even Pesh to Genel Miran FDP to be submitted by end of year. Somaliland 2D Seismic shooting completed. Analysis completed by end of year. Somaliland massive basin akin to Yemin, unexplored. Somaliland potentially 2 Billion plus barrels of Oil. Company confirms in big letters its in the market for corporate action. 30$ million received for August payment before all Pesh producing. Free cash flow in excess of 150$ for full year….WOW. Huge increase in monthly cash from October and rising over coming months as fields increase production.
Where next for Genel? Thanks Boyobach, Lots of good news coming our way (hopefully in the coming weeks) USA Roadshows. Trading and Ops update. Formation of Iraqi government. KRG elections. So game on and all to play for. Here’s to a brighter future…
Where next for Genel? Well it has clearly broken upwards in the last few days and pierced the red line that was marking its downward path (closer view below). An optimist would probably say that the 257-265 band is now a realistic possibility. But I think there’s a little pocket of resistance around 242 - 248 which may slow it down. Hopefully not! image.png1012x832 46.7 KB
Where next for Genel? How are we looking a week later char wise ??
Where next for Genel? Despite lots of positives this year, including strong oil prices, Genel’s sp seems to have hit the buffers. Is it even on the brink of falling back? Hopefully the trading and ops update on October 10th will restore the loss of momentum since June. image.png1213x874 70.8 KB
Trading & Ops Update From Twitter: Genel will announce a trading and operations update on 10 October 2018.
Finding useful chat Regrettably, if you are looking for discussion about some companies, such as Genel, then you may have to go elsewhere for it. This site: LonSouthEast Genel Chat seems to offer rather more activity than you’ll currently find here. I can’t say I prefer, or even like, the site. The ads are loathsome, it’s much more cluttered and less convenient to navigate than this one, plus a few glitches of its own (like when you switch to view more threads and find you are looking at all recent ones, not just the company of interest). For all the justified complaints about the revamp of ii, this new discussion element actually works quite well in my opinion - as evidenced by the number of people who managed to post their complaints despite the supposed difficulties. Charts, lack of a cash line in the vp and returning directly to your vp from chat are different matters.
Nice Earner The current drop from levels of 290+ offers an unexpected ‘buy back’ opportunity for me, having taken profits a few days ago. I’m currently adding around 10% to my core holding on each 25p drop from, and including, 250. As cash flows in, Genel’s worst days should be behind it and it seems to easily merit a 12 month target of £3-£4 per share, although the recent ‘chart average’ around 270 is quite satisfactory from my pov.