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.

True bit then theirs this,
Gerstenlauer, Gulf Keystone's Chief Operating Officer commented "The Cretaceous resources evaluated by the Shaikan-3 well are massive by any standard. They represent a significant oil resource for Kurdistan and Iraq. It is a further demonstration of the huge hydrocarbon potential of the are
Also ref to increased production,so imo,played down a little?

sp didn't get that excited, unfortunately.,.

there is also the legal challenge overhanging, vexatious as that may be deemed

From Evo Securities:
"Our assumed P50 recoverable resource estimate of 66mmbls for the Cretaceous Garagu formation is hardly transformational for the Shaikan story but is an incremental addition. However, the lack of detail on the flow test rates, oil viscosity or API is noteworthy. The shallow Shaikan-3 appraisal well, targeting the Cretaceous formations which could not be logged during the initial Shaikan-1 well, has completed drilling.
Evaluation suggests a P50 to P10 OIP Volume of 220mmbbls to 2.2bnbbls which, using a 30% recovery factor, suggests a recoverable resource estimate of 66mmbbls to 660mmbls. There is no indication of the P90 OIP number which could be as low as 55mmbls. Two open hole and two cased hole flow tests were conducted but GKP has not released the results so it is difficult, from the outside, to understand how commercial this discovery is. The well has been completed as a producer in the Jurassic Sargelu formation and will add to the current production which is being sold domestically in the absence of a payment resolution. For now we leave our target price and recommendation unchanged. Next news flow should be a result from the Sheikh Adi exploration well later in 1Q."

http://www.fox-davies.com/media/286397/fdcgkpjan52011.pdf

........A positive result that adds to the 4.2Bbbl existing OIP estimate based on the
Shaikan-1 discovery well. However the P50 estimate of 220mmbbl is lower than our
expectation of 600mmbbl OIP for the Cretaceous formation. This has a 7p negative
impact on our risked NAV but none on our 200p target price which was set very
conservatively with respect to NAV..........


.

"Negative ending" write up in Shares Mag it seems.... long interview to read, little snippet of it below....

http://www.sharesmagazine.com/


Page 30....


".............Summary

Definitely not for widows or orphans since an investment in Gulf Keystone takes in significant technical and political risk. There are a number of potential catalysts in 2011 that could reward an investor brave enough to take a punt but
at 173.2p Shares would steer clear.

Bull case

Active 2011 drilling campaign
Potential for resolution of oil dispute in Iraq
M&A interest

Bear case
Risks to ownership of assets
Technical obstacles
Lofty valuation

..........."

sold the balance of mine yesterday

Sold half at 189p back in Nov, the rest are a free ride plus a small lump I bought at 170p so will old for now......I think.,.

Exports can start, but on a "no profit" basis.

Still, I suppose people are getting salaries and directors are getting paid so the only losers are the shareholders really as it stands.......

http://www.thepeninsulaqatar.com/business-news/139660-iraq-to-pay-costs-to-foreign-oil-firms-in-kurdish-region.html

.

i note that little gem was dated very early yesterday (20th) morning, so surely already accounted for

Gulf Keystone today provides an update on its active work program in Kurdistan.



Sheikh Adi - 1



The Sheikh Adi-1 exploration well is currently at the 13.375 inch casing point at the bottom of the Cretaceous interval after side tracking around a section of the bottom hole assembly that had become stuck in the open hole. The forward plan is to set 13.375 inch casing and drill out into the top of the Jurassic age formations and the first of the primary exploration targets for this well.



Shaikan-2



The Shaikan-2 appraisal well (9 km east of Shaikan-1) is currently drilling 17.5 inch hole at approximately 1,210 metres. The forward plan is to drill to the bottom of the Cretaceous interval, set 13.375 inch casing and then drill into the first of the Jurassic age target intervals.



Extended Well Test



The Shaikan-1 discovery well and the Shaikan-3 well are both now tied into the extended well test facility and ready to produce from the Jurassic age Sargelu reservoir. To date, the Company has sold over 63,000 barrels of oil into the domestic Kurdistan market, which has yielded valuable commercial and marketing information. The Company has signed an initial quarterly sales contract for 2,500 tons (for Sargelu crude oil, one ton equals 6.7 barrels) of oil per week to be sold into the Kurdistan domestic market.



3D Seismic Program



The 3D seismic data acquisition program has been fully completed on both the Shaikan and the Sheikh Adi structures. Data processing and seismic interpretation will continue until at least June of this year.



Shaikan-4



The location for this well, the second deep appraisal well on the Shaikan structure (6 km west of Shaikan-1), has been completed and the Company has signed a letter of intent with AOS for their Discoverer 3 drilling rig. This 2000 hp rig will begin moving from Tunisia to Kurdistan in February and well spud is currently anticipated by the end of March. Shaikan-4 is targeted to drill the Jurassic and Triassic age formations and if warranted, into the top of the Permian.




Akri-Bijeel



Kalegran (100% subsidiary of MOL) is currently rigging up on the Bekhme-1. This well is designated as a Jurassic exploration well with a target depth of 2,900 metres (depending on well results). The well is expected to spud by mid March.



John Gerstenlauer, Gulf Keystone's Chief Operating Officer commented "We will very shortly have two appraisal wells and two exploration wells underway in Kurdistan. We are very excited about the possibilities that this implies for our holdings in Kurdistan and we are looking forward to a very interesting and rewarding 2011."

Gulf Keystone is pleased to announce that a corporate film is now available to view on the Company's website, www.gulfkeystone.com.



The film includes interviews with the Company's senior management, as well as footage of Gulf Keystone's assets in the Kurdistan region of Northern Iraq.

Executive Bonus Scheme for 2010



The Remuneration Committee has recommended to the Trustee ("EBT Trustee") of the Company's Employee Benefit Trust ("EBT") that it makes discretionary awards for 2010 under the Company's Executive Bonus Scheme up to a maximum of 8,453,334 common shares of USD 0.01 ("common shares") to be provisionally allocated for Directors and employees. No more than 2,113,334 common shares can be considered for award in 2011and 3,170,000 common shares in each of the years 2012 and 2013.



The maximum number of common shares that would be available in the EBT under the 2010 Executive Bonus Scheme for the Directors, subject to the discretion of the EBT Trustee, is set out below:



Todd Kozel 3,968,889

Ewen Ainsworth 793,778

John Gerstenlauer 793,778



In addition the Board has approved the direct award [not through the EBT] of up to 888,888 common shares under the 2010 Executive Bonus Scheme to each of Mehdi Varzi and Lord Peter Truscott with no more than 222,222 common shares being considered for award in 2011 and 333,333 common shares in each of the years 2012 and 2013.



Share Subscription by the EBT Trustee



The EBT Trustee has considered the recommendations and indicated on 4 February 2011 that it wishes to subscribe for a total of 5,886,332 common shares in the Company to enable it to effect the discretionary issue of 3,772,998 common shares to Directors and employees in respect of one third of the 2009 Executive Bonus Scheme, in accordance with the previous recommendations of the Remuneration Committee (detailed in announcements of the 7th June and 25th June 2010) and 2,113,334 common shares as recommended in respect of the 2010 Executive Bonus Scheme.



Executive Bonus Scheme Awards 2008, 2009 and 2010



On 4 February 2011 the Board approved the direct issue [not through the EBT] of a further 1,103,948 common shares to enable the Company to effect the final instalment pursuant to the 2008 Executive Bonus Scheme and the second instalment pursuant to the 2009 Executive Bonus Scheme (detailed in announcements of the 7th June and 25th June 2010) and the first instalment pursuant to the 2010 Executive Bonus scheme in favour of certain Directors and employees in accordance with the recommendations of the Remuneration Committee. The direct awards to Directors are as follows:

Iraq Kurdistan to export 100,000 bpd - official

BAGHDAD: The Iraqi Kurdistan Region's oil revenues will go to the central government in accordance with agreements signed between the two sides, said a spokesman for the Kurdistan Alliance, noting the region will export 100,000 barrels per day (bpd).

"The central government's approval and ratification on the oil contracts concluded by the region's government represent a good practical step to turn over a new chapter," Mouayad Tayyeb told Aswat al-Iraq news agency.

"The Iraqi Kurdistan Region's government looks forward to building relations based on partnership and cooperation to remove all obstacles," he said.
Tayyeb added that the region's government has nothing to hide in the oil-exporting process.
"The government seeks boosting Iraq's budget with additional resources."

He said that the next step to develop work in this field is to link 50 oil wells in various areas of the region through the Iraqi-Turkish pipeline that carries oil supplies to Ceyhan port.

http://www.zawya.com/story.cfm/sidZAWYA20110207053343

Another slant on what can only be classed as brillent news imho.

Goldman Sachs has a 234p rating on this stock, Iraqi prime minister Maliki has stated that Bagdad will now accept all contacts signed by KRG as being legal, due to difficult exploration conditions in region--this is a major turn around and we have a wealth of news to come (potentially very good) over the next few weeks and months.

too slow to get back in and damned if i'm going to keep keep chasing, even though good to see all time high being seriously challenged for about 4th time

Surely the contracrissue was the thorn in the foot,the SP that options have bben set speak imo volumes for the future?

Monday, February 7, 2011
PRASHANT RAO
BAGHDAD- Agence France-Presse
Iraq's Prime Minister Nuri al-Maliki announced that the central government in Iraq will accept Kurdish oil deals with foreign firms due to their higher level of profit based on the different natural conditions for oil drilling in Kurdistan compared with the south of Iraq."It's difficult to have service contracts in Kurdistan but it's normal to have them in southern Iraq," he added



U.S. President Barack Obama, right, and Nuri al- Maliki, prime minister of Iraq, meet in the Oval Office of the White House in Washington, D.C., U.S., on Tuesday, Oct. 20, 2009. Bloomberg photo

Nuri al-Maliki's announcement that Iraq will honor Kurdish oil deals with foreign firms will boost its coffers, but experts said Sunday the longer term impact of his remarks may well be more significant.

The Iraqi prime minister's concession came in an interview with AFP on Saturday, signaling an end to a stand-off between the central government and the autonomous Kurdish region after the latter cut off exports of oil in October 2009 in a row over payments to foreign firms.

In the interview, Maliki said Iraq's Oil Ministry "accepted these contracts because the nature of the extraction in Kurdistan is different from [the southern province of] Basra," referring to two production-sharing contracts signed with Norway's DNO and Turkey's Genel Enerji.

"Maliki's comments are historical because they mark the defeat of the centralist oil policy pursued by his previous oil minister, [current Deputy Prime Minister] Hussein al-Shahristani, since 2006," said Reidar Visser, an Iraq expert who runs the historiae.org website.

"[Maliki] recognizes the Kurdish contracts and their higher level of profit based on the different natural conditions for oil drilling in Kurdistan compared with the south of Iraq. This establishes a precedent that in theory could apply to new fields in the future."

Maliki told AFP on Saturday that there was "a need for bigger efforts" in Kurdistan, while in oil-rich Basra province, oil "is closer to the surface."

"It's difficult to have service contracts in Kurdistan but it's normal to have them in southern Iraq," he added.

While Kurdistan's contracts are based on profit-sharing, Baghdad prefers the use of a service fee, whereby firms are paid a fixed sum for each additional barrel of oil they extract above current production.

In 2009, the central government awarded 11 contracts to international energy firms based on the service fee model. Kurdish authorities, meanwhile, have signed some 30 contracts with foreign firms in addition to the DNO and Genel Enerji deals, though the latter two are the only ones producing oil presently.

Ruba Husari, the Baghdad-based founder and editor of the IraqOilForum.com website, said Maliki's remarks could set a precedent for future oil deals signed by Iraq, which holds the world's fourth-largest proven crude reserves.

"Even though Maliki was talking about the two contracts covering fields that are in production, he is still creating precedence by legitimizing production-sharing contracts awarded by one region of Iraq," she said.

"If the Iraqi government is admitting that production-sharing contracts are applicable to exploration-and-production contracts in the Kurdistan region because of the higher risk, it will be required to be consistent and use the same contracts for exploration and production in the rest of Iraq."

Husari cautioned, however, that she did not foresee such events taking place, noting that this would be "too controversial" in the rest of Iraq, and added that Kurdistan was a "special case because it is a long-established region with its own parliament, laws and cabinet."

The central government in Baghdad has repeatedly said it was opposed to the Kurds signing their own contracts, barring foreign firms that did so from participating in auctions of large oil fields in the rest of Iraq.

But Kurdish officials ignored those threats by clinching agreements with several international companies after the U.S.-led invasion of 2003.

"Major international companies, particularly the British and the Americans, have avoided Kurdistan and turned to Baghdad but now they'll be regretting that they left the doors open ... and will now be playing catch-up," said Ranj Alaaldin, senior Iraq analyst in London at the Next Century Foundation.

He added: "Baghdad's recognition of the production-sharing contracts could also put it under pressure from both current and future investors the federal government will have to answer to these firms, who will be expecting better terms if not a complete scrapping of the service agreement."

Iraq currently produces around 2.5 million barrels per day, and output is expected to rise to 3 million barrels per day by the end of the year. Overall exports, which account for the lion's share of Iraq's government revenue, averaged around 1.95 million bpd in December 2010.

Production, however, is expected to rise dramatically in the coming years when the contracts awarded in 2009 come online.

don't disagree, but still not sure of "fair value"

=============

have allowed stomach to overrule brain and bought 50% stake at 196.5 - could have easily bought 10p cheaper a bit earlier ..... have rationalised on basis of contract approval and surge through previous all time high ..... if things subsequently look even more promising, have room to top up without being o'weight

good stuff this hindsight ...... wish i'd kept a pack as wouldn't then have paid too much!

working on my 6 pack, that aside my holding slightly more than that and very happy :))