http://www.gulfkeystone.com/ The firms exploration programme in Algeria is going well and "the shares look good value", say the Investors Chronicle. Your comments please. goal.

todd is not telling the whole picture. he is dishonest.

who is todd and what do you have to support your allegation?

cynic todd kozel is executive chairman.

assumed he must be something along those lines, but main Q not answered

has some "form" from the days when GKP made some highly speculative assesments of oil/gas reserves in Algeria a couple of years ago.

thanks hali .... another wannabe timis perhaps

A bit of patience is needed here,......we were over 120p not so long ago....if then you could have bought at this price : there would have been a scramble !.

'A bit of patience'!!!! These have been in steady decline for the last 10 months, with no obvious sign of reversing the trend! I suspect even certain biblical characters would have lost patience by now!

At the top I sold out but have been back in for several months,.....not so many shares... the testing of Shaikan is resuming.....that's good and more wells are being drilled.....

Up 12% on very vague bid rumour.

Looks like my 60p entry is out the window then!

Now up 23%. Maybe there is some truth in the rumour.

or one lemming following another .... i already hold (at a loss!) so am delighted

on second thought - 23m now traded .... that's an awful lot of stock!

4m is the norm - 27m traded today!
i guess watch this space, but one can easily be led astray by such volumes

Nice to see this rising....about time...incredible amount of oil discovered...

Food for thought?

dalesman - 24 Jul'10 - 00:31 - 27113 of 27402


Blue Sky Thinking!

From what has been released from the DNO bid the price / barrel achieved appears to be around $6 this roughly equates to 8.5% using $70 oil which if plugged into the Daniel Stewart NAV, ( this uses reduced entitlement but otherwise uses the same parameters and variables set out in the general NAV in the header) gives a figure that comes out at 2.89.

The way Daniel Stewart uses to calculate the NAV applies the ASIP tax at the front of the calculations. Thus Shaikan is reduced from 51% entitlement down to 30.6%. By using the reduced block entitlement you can then apply the full PSC % which should be 15% . The DNO bid reduces this 15% down to around 8.5% on $70 oil. This seems to allow considerable upside for the bidder while giving a fair value to DNO. As I mentioned above plugging 8.5% into the NAV gives IMHO 2.89.

This figure does not allow anything for future finds / appraisals which will increase the OIP over the 4 blocks. As appraisal wells are drilled there will be a movement from oil in place figures (and associated recovery factors) to 2P reserves. The COS will also rise, providing of course that the drill bit continues to be successful

So Lets tweak the NAV and apply some blue-sky thinking!

Using John Gerstenlauer statement that GKP expect to achieve industry standard recovery rates of around 33%, increases the NAV significantly.

2.89 becomes 3.76.

Still working with known figs (7.950 billion at AB UBS note, 4.185billion at Shaikan DGA figures, 1.9 billion for BB Genel pre drill estimates and a measly 1 billion on SA- GKP) and increasing the Chance of Success at Shaikan and AB to 85% produces 4.20.

A bid at 4 therefore seems to be cheep and cheeky now doesnt it, as NOTHING is included in the figs for further upside due to drill bit revelations or an increasing oil price.

Lets start to factor in a few upside possibilities starting with Shaikan. Lets say that Shaikan is full to spill 22 billion has been mentioned but lets not be greedy, lets use 18 billion. We now get to 11.20 !

ARE YOU GOING TO SELL AT 3 NOW?.

But wait, we have not finished with Shaikan yet. Lets factor in 6TCF of gas (DGA figs) and that should conservatively add another 1.50 - 3 per share we will leave this out for the moment but return to it later.

Now lets have a look at Sheik Adi.

Using Daniel Stewarts method, the entitlement is reduced to 48%. 1 billion seems to me to be vastly down beat if Shaikan is full to spill.

We know that GKP believe that SA is an extension of Shaikan. Lets err on the low side and attribute 10 billion OIP. The NAV now jumps to 15.40. However if we use say 70% COS we get 17.27. Lets bring it into line with Shaikan and attribute a COS of 85% now we get 18.27.

ARE YOU GOING TO SELL FOR 3 NOW?

And so we come to block 4: BerBahr

We learn that this could be the biggest block of all. Lets not be greedy, lets equate it to Shaikan a much smaller anticline. We will give Ber Bahr 18 billion OIP and we are up at 22.43. Apply a 85% COS and we get 25.38

Now, lets tidy up Akri Bejeel.

UBS have stated 7.95billion OIP but again this is based on the smallest of the three targets . Let us double that to 16 billion. The NAV has just risen to 26.40.

All blue sky thinking! Yes indeed but is it really far from the truth?

The numbers add up to 62 billion barrels of OIP. It has been conjectured that the true fig is nearer 100 billion. Ill leave you to work that one out!

And so we return to the gas.

25TCF (a reasonable assumption if Shaikan has 6TCF) of associated gas could add between 5 10 to the figs. Remember the Nabuco pipeline is coming!

AND MANY HOLDERS WILL BE SATISFIED WITH 3 NOT ME!

Remember these figs are after tax and allow the next man around 6.5% on top of these figs thats 15% as opposed to 8.5% all under the KRG PSCs

One last thing, if instead of $70 oil price assumption $80 is used, $30 is achieved!
$90 oil and we have 33.90

To paraphrase Mrs T sell if you must , this punters not for selling well not at 3!

AND THEN LADIES AND GENTLEMEN THERE IS THE UNEXPLORED PERMIAN!

Please rework my figures, please do your own research the figs above are for my interest only and it is my imagination that is applying the figs they represent just one possible scenario. Some would say the picture I have painted is nowhere near the best case scenario, others will naturally disagree!

Remember, it is your decision, and your decision alone to sell hold or buy and no advice is offered from this quarter on any of these decisions! All the above is my opinion only and my opinion has been known to be wrong!

Only questions are posed!
BUT arent they good ones! :0)

Well thats passed a pleasant hour on the Ben McCree , after a good day on the markets as we travel at 19 knots towards England from the IOM - the first leg of the journey as we start our holiday.


Sweet dreams and kind regards

Dalesman

PS

FB if you think it helps, please feel free to reference the post in the header next to the NAV. Im happy for the post to be reposted so long as it is done in its entirety with the caveats intact!

And to all GKP longs, - when you are tempted to sell just mull over the validity of my figures, they may just help!
cyril

Today's Mail thinks the Chinese are coming....

http://www.dailymail.co.uk/money/article-1297230/MARKET-REPORT-Microsoft-ARMs-licensing-agreement.html?ito=feeds-newsxml

"Heavy speculative buying amid revived talk of a possible bid from China saw Gulf Keystone gush to 100p before closing 15p, or 21 per cent, higher at 84.75p. Turnover swelled to almost 27million as punters responded to gossip that a deal hungry Chinese conglomerate is anxious to get its hands on the oil explorer's Shaikan prospect in the Kurdistan region of Northern Iraq."

Abd from the times,


Market report
The TimesPublished: 24 July 2010Markets Business
...That was greeted by a healthy degree of scepticism from wary traders, who said they had heard it all before, but nevertheless GKP rose 15p to 85p. Another of Salamander Energys test wells in Vietnam proved dry. The oil and gas explorer dipped p...

cyril

I've followed your leads before cyril, all of my own choosing and no regrets in doing so but I do like the sound of your last posts and hold a nice quantity of gkp and hope your forcast come's true. Maybe those who sold out earlier will wish they kept hold now. GL..BB

BB - did you ever get my e-mail?

BB i mostly sit on what i have nowadays,but i did get some PTR recently,1st oil imminent.

Back to GKP, probably the best private researcher of oil stocks has posted this.

ZENGAS - 24 Jul'10 - 16:04 - 27230 of 27443


When you look back at pages 15 - 20 of the GKP 4th May 2010 presenation, it's interesting that the extensive display/references take into account the 3 blocks - Berbahr, Sheik-Adi and Shaikan - but not Akri-Bijeel !

There are references to Hunt Oils Jebel Simrit well which is extremely close to Shaikan (page 15 best view imo).
It appears to be within 8 - 10km (look at the scale) from the Shaikan discovery well. This is about as close as the distance between the Shaikan discovery well and it's 9km step-out Shaikan appraisal well due to spud shortly.

With HUNT being a private company it will be hard to know what the results of their Jebel Simrit well are and of what relevance or significance it is to GKPs blocks - but one thing is that the much further away HUNT Jabal Kand well was relevant and was mentioned in GKP dispathes before - so equally Hunts Jebel Simrit well must be of importance, given it's extreme close proximity to this immediate area.

Also shown is the Summail Extension prospect where DNO had oil shows and had to suspend drilling at the time. The page also shows the distant DNO Khanke well also with oil shows and of course Hunts original Jabal Khand well that the North Oil Co had drilled to about 5300m many years ago.

In all of the May presenation there is **nothing** about Akri-Bijeel being possibly relevant to this amongst all their diagrams/data display etc.

But then - some 7 weeks later (23rd June 2010), we get a further piece of perhaps more significant information than it first appears and being possibly 40-50km away from the Shaikan discovery well.

"The Bijeel-1 exploration well has provided water pressure data which, when taken with data from other wells in the area, has favourable implications for the Shaikan structure. The data would appear to support the concept of a regional aquifer which underlies the Shaikan structure and that the hydrocarbon-water contacts in each reservoir are substantially deeper than the lowest known hydrocarbon depths, as determined from log data".

TK comments - "The implications of the water pressure data from Bijeel-1 provides further support for movement toward the upside volume range for the Shaikan structure."

Would the tie-in/link from Akri-Bijeel (ie news of June 26th) now more than 4 weeks later be the catalyst for 'possible' bidders to have come out of the woodwork after studying the newsflow.

(What are Hunt sitting on in respect of Jebel Simrit ?).

Akri-Bijeel had a 3200 bopd discovery on an approx section of 30m tested out of 200-250m potential interval in March - which has gone up to potentially 400m+ potential interval. (Could 10-20k bopd be possible here ? and a significant oip estimate to materialise ?).

The potential OIP figures are mind boggling when you look at what GKP and then DGA said. The same data will be with MOL (including the KRG).

Now recently further data from Akri-Bijeel has added to the picture with particular reference to higher oil upside at Shaikan alone.

We know from DGA/GKP that up to 22 billion boe OIP potential (18 billion bls oil/) may exist on Shaikan.

UBS speaking with MOL at Pula 8 weeks ago upgraded just 3 of the prospects at Akri-Bijeel to 7.9 billion bls OIP.

That's 30 billion bls openly discussed in the industry !!! (and before Berbarh or Sheik-Adi).

Where else in the world is something like this available at a few dollars/barrel capex and opex ?

Who WOULDN'T want that chance of a share in years of a potential major oil supply?

Is a bid possible and in the grand scheme of Energy security etc, while the company is still relatively cheap ?

Shaikan alone was reportedly one of the largest worldwide finds in recent years which will also have made the company and it's current size/status stand out for those that may be scouring the world for assets - partcularly here where opex/capex is cheap and one of the last places for 'big easy oil'. To allow that to fall into a competitors hands could be too much for those that are looking for major oil supplies and future/long term energy security - which could mean someone moving sooner rather than later.

I personally don't know if a bid is underway or could be being tabled, but make no mistake - as each new piece of the jigsaw fits together in respect of new data and it's positive/relevant, it must make the prospects more enticing for a bid even at what many might think early stage.

Rak appear to be bidding over 1.1b for DNO on only a fraction of the oil that GKP would appear to hold. One could argue that RAK aren't sitting around waiting for DNO to prove up Summail or some of their other propects relevant to their overall oil reserves as of now. Likewise Heritage tabled 1.5b for Genel at the time (before the deal fell through ) - a sole Kurdish operator without any drilling on 2-3 of Genels other blocks and who also appeared to have a lot less oil than GKP have on Shikan alone, so the proof is there that GKP wouldn't need to have all blocks drilled and it is imminently moving to producer status also.

Continuing to keep an open mind, but if the volativity/press persists then GKP i would think would have to issue some statement on the matter particularly with the agm in just over a week.

cyril