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.

chugging away nicely. Doing me very nicely...:))

176P NOW to buy.
cyril

Rumour is doing the rounds of a 250p per share takeover bid.

Hence the price is getting excited.

But, its only rumours..............

250p with new oil shows looks cheap

Roughly 10k's worth gone through at 183.75p. Seems the rumour is from the FT?
cyril

This does look like takeover stuff...my question is why has it not happened before...?....I would have made a move upon Shaikan being discovered...GKP was 50p then....

I see Prosels is back.....not knocking GKP are we now..?...

Just flying.....fantastic....

Uncle Cinners will swallow his golf balls when he sees this !.

No sign of denial by the company so it might be true....

Sold out at 189p, thats enough for a day trade.

More than likely its a false rumour created so the big boys can dump stock into PI buying and T-traders.

Just like DES before the first Rachel failure where it went to 170p and then crashed in the days following.

Is it a real rumour ? or a false one to allow "friends" to dump stock before bad news comes along ?

No failures for GKP,no concern of SP short term tis not an issuefor me, as i rather be in than out.
cyril

At a guess ...more to come tomorrow morning.....

.....Pros /DES lost a larger percentile in the three days prior tothe Rachel drilling result being made known than in the actual announcement via RNS itself .........via the old pals act ect ect ... ....

This is not a rumour... 220p tomorrow.

my chaps in the market had already kept me informed .... at cost i was only running a 75% stake, but am certainly a happy bunny both here and on the day in general

Perhaps it will break the 200p tomorrow morning...should do...fantastic share...

It seems that they had another visit ,the last couple of days from a bunch of ANALYISTS,now have they got word back???
cyril

pro's licking his wounds here.....think he called it a load of sh*t not long ago......5 figure profit is not a load of s....lol.

Post from dalesman,glas i didn't write it.
cyril

Blue Sky Thinking 2 or Red Sky at Night!

Its been a while since I put out my Blue Sky Thinking post. Many of the blue sky assumptions have now come to pass and I thought it may be an opportune moment to update the NAV and revisit my post.

The newest NAV is here
http://img560.imageshack.us/img560/5419/screenshot20101102at212.png


The main updates are:

1. Shaikan has been increased to 7.2billion from 4.2b in line with the Miraboud note. Akri Bejeel remains at 7.95billion OIP inline with the UBS note.
2. The recovery factor has been set at 33% re John Gs guidance.
3. The base / barrel price is still $3.5 (my NPV 10) assumption.
4. The chance of success at Shaikan and Akri Bejeel has been set at 75%
5. An additional OIP 2.25 billion barrels have been added for the shallow zone (Shaikan 3) drill. This is the mid case scenario
6. 5TCF of gas have been included for the Triassic with a boe of $35 as opposed to the $70 oil price assumption used for oil.
7. Sheik Adi has been increased to 3.75billion in line with guidance (half that of Shaikan)
8. Ber Bahr remains at 1.9billion OIP per pre drill guidance.
9. This gives a base case valuation of 5.09

From here on in I will update the old post, which started off with the following



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.

***As you can see the updates have almost doubled the NAV before we actually get underway!

Applying the DNO 8% to the new NAV gives us 8.55 as opposed to 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.

***Well OK, I have now adopted the 33% in my standard NAV ! ***


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.
.

*** Using the new base NAV and applying this tweak we now get 9.12 ***
..
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.

*** Indeed, a bid of 8 now seems to undervalue GKP!

Any potential bidder running their sliderule over GKP will need to include these calculations in their M&A plans and realize that we have already done this kind of valuation.

Returning to the NAV: ****
......................................................................................
Lets increase the COS on the Shaikan drill to 70% from 60% and do the same for the Triassic Gas. We are now up to 9.40
....................................................................................

**** With the new NAV we now get 14.63 ****
..
ARE YOU GOING TO SELL AT 3 NOW?.

****From all the posts on the GKP boards I now can say with some certainty that most holders will say quietly say No!****

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.

**** I now include 5TCF in the base nave but tets factor in the upper guidance of 10TCF this is equivalent to 1.666 b boe and the NAV rises to 15.72 using 35 boe price assumption****


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.

***Increasing Sheik Adi to 10b in the new NAV gives 19.15***

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.

*** New valuation 21.41***

ARE YOU GOING TO SELL FOR 3 NOW? *** Silly question! :0) ***

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

*** Ber Bahr 27.90 ***

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.

***Akri Bejeel 28.90***

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

The numbers add up to 62 billion barrels of OIP.

***Since my first post 60billion barrels has been mentioned in a broker note so perhaps this too is no longer blue sky thinking***


It has been conjectured that the true fig is nearer 100 billion. Ill leave you to work that one out!

***Using back of a fag packet this would equate to
around 46.31***

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!

***Or I suspect you :0)***


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 ***36.73***

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!

No advise offered!
Only questions are posed!
BUT arent they good ones! :0)


Sweet dreams and kind regards

Perhaps we have moved on from Blue Sky Thinking to Red Sky at Night investors Delight!

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!