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.

a little present
http://www.youtube.com/watch?v=L5YUCygMBiE

We should get the results(72hrs) from the latest RNS,which will decide?

A couple of days old but worth aread,followed by Fox's latest report.

A cGulf Keystone shares gush up 22% on Kurdistan oil hopes

Share3 Comments (0) Making a substantial oil discovery when the crude price is soaring is pretty much an ideal situation. Step forward Gulf Keystone Petroleum, which is exploring in the Kurdistan region of Iraq.

The company has revealed it found a significant flow of oil at the Shaikan-2 well, where it has a 75% working interest. It said:

Substantial smoke and/or the oil flare is/are visible from the company's office in Erbil some considerable distance from the Shaikan-2 location, indicating that a significant flow has been encountered and prompting hte company to issue this announcement.


It is conducting tests, which are expected to last for 72 hours, to determine flow rate and oil quality. But Gulf Keystone boss Todd Kozel said the oil flow confirmed its belief in the "world class nature" of the Shaikan discovery.

Investors are convinced too. Shares in Gulf Keystone - which some tip as a possible takeover target - have surged 22%, up 26.75p to 150.25p.

Analysts at Fox-Davies Capital said:


This is excellent news for Gulf Keystone although we have to wait for more data in order to be in a position to make a more definitive assessment. We are increasing our probability of success for the P50 case on Shaikan from 2/3 to 3/4 and raising our price target to 220p. We remain strong buyers of the stock, which has been weak for no specific reasons recently.


http://www.guardian.co.uk/business/marketforceslive/2011/mar/18/gulf-keystone-up-on-iraq-hopes



http://www.fox-davies.com/media/360203/fdcgkpmar182011.pdf

And from proactive.

http://www.proactiveinvestors.co.uk/companies/news/26467/gulf-keystone-shares-surge-as-shaikan-2-well-confirms-the-potential-of-the-block--26467.html

Shares in Gulf Keystone Petroleum (LON:GKP) jumped 24 per cent in a frenetic morning session after an encouraging update on progress at the Shaikan-2 well in the Kurdistan region of Iraq.

Above: Shaikan-2 smoke and oil flare are visible from the Company's office in Erbil some considerable distance from the Shaikan-2 location.

Based on the results from the initial Shaikan discovery an independent report was compiled. It put Shaikans oil in place resources at around 1.9 billion barrels and saw upside to 7.2 billion - in a P90 to P10 range.

Shaikan-1 tested five levels from 1,450 metres through to 2,850 metres - with a combined rate of more than 20,000 of oil barrels a day.

But Gulf Keystone had to stop drilling at the lowest levels because of a very high pressure zone that was above the tolerance of the well design.

Amd from dalesman,some excellent points.

To quote the Carpenters 'its only just begun'

Shaikan 2 has much yet to give up. It appears that the Sargalu is deeper than expected at SH2, we have the Alan Mus and Butmah still to come and the oil water contact may well be lower than expected adding greatly to the OIP figures.

This is only the start of the operations at SH2. The HPHT Triassic is next. Remember the gas kicks, the excellent flow rates and the high API oil recovered at SH1 before they had to shut it down. That process took three days to get under control such was the energy encountered in the Triassic.

SH2 has been designed to deal with these HTHP conditions. It will be the first time that the Triassic has been fully appraised in Kurdistan and the light API oil and excellent GOR will help to make the well even more commercial.

If I remember correctly an extra 5 billion was postulated for the Triassic, I have a feeling that this figure may turn out to be conservative. As well as light oil the Triassic has significant gas associated with it.

Todds foresight in joining with MOL will be fully recognised when the Nabucco pipeline is built. Mol owns 1/6th of the Nabucco project and will have priority access to it for its gas. Its gas is GKPs gas and while Heritage may find it more difficult to export its gas, GKP should be first in line.

Shaikan 2 will not stop at the Triassic. To date we have not heard of any sidetracks that could limit the casing strings and subsequently restrict the planned TD which lies in the Permian. The Permian lies below the Triassic and represents yet another frontier in terms of Kurdistan oil exploration.What I wonder has the Permian to offer to our OIP figures?

So 'its only just begun' let the thin lady sing!

God bless her soul

Kind regards

Dalesman

http://av.r.ftdata.co.uk/files/2011/03/SH-2-DST-1-96-64-choke-Sunrise-on-the-17th-March-2011-3.pdf


more exciting pictures which seem to be driving the SP, my 186p trade almost in profit??

Ho ho my ave, 44p lookin good.,.

YABA DABA DO!!!

22 March 2011

Gulf Keystone Petroleum Ltd. (AIM: GKP)

("Gulf Keystone" or "the Company")

Kurdistan Operational Update

Shaikan-2 Appraisal Well Test Results

Gulf Keystone is pleased to announce the results of the previously reported well test at the Shaikan-2 Appraisal Well drilled approximately nine km to the south-east of the Shaikan-1 discovery well.

Shaikan-2 has achieved short term, indicated rates of 10,144 barrels of oil per day (bopd) and a stabilised flow rate of 8,064 bopd of 26 degree API oil and 2.44 mmscf/d of gas (Gas Oil Ratio of 302 scf/bbl) on a 2" choke at a 250 psi flowing wellhead pressure. Given the Shaikan-2 well test conditions, as well as the successful well stimulations at Shaikan-1 & 3, the Company anticipates that sustained rates in excess of 10,000 bopd could also potentially be achievable at Shaikan-2.

The Shaikan-2 flow rates are consistent with the Shaikan-1 & 3 rates but with higher quality oil and more associated gas, both of which can lead to an enhanced recovery rate. The oil gravity of 26 degrees API is significantly better (lighter) than Shaikan-1 & 3, both of which are currently producing 18 degree API oil from the upper sections of the Jurassic at the Company's Extended Well Test facility.

The Shaikan-2 well test was conducted in a 44 meter interval (1792m to 1836m) in the upper section of the Jurassic age formation. Following this test, normal drilling operations will recommence and the Company anticipates that further Shaikan-2 drilling will follow the Shaikan-1 geological sequence, i.e. through multiple, potential Jurassic and Triassic reservoirs before reaching TD at the bottom of the Triassic or into the top of the Permian, depending on well results.

The Company has a 75 percent working interest in the Shaikan block and is partnered with the MOL subsidiary, Kalegran Ltd., and Texas Keystone Inc. which have the remaining 20 and 5 percent working interests respectively.

Todd F. Kozel, Gulf Keystone's Executive Chairman and Chief Executive Officer commented:

"We are extremely excited about the Shaikan-2 well test results, especially considering the potential implications of this successful nine kilometre step-out from the Shaikan-1 discovery well for the oil-in-place resource estimates. We eagerly anticipate further results from the continuing drilling program for this well."

surprised that market not more excited......glad to be holding.,.

Frustrating da,y connection problems.


http://www.iii.co.uk/articles/14816/gulf-keystone-excited-shaikan-2-test-results

From Iraq oil report;
Luaibi announces Nov bid round, export and production forecasts
Iraq's Oil Minister is pressing ahead with an auction of exploration blocks as the country gears up for big oil output increases amidst soaring oil prices.

http://www.investegate.co.uk/Article.aspx?id=201103250700086110D

Was hoping for news of SA-1 which spudded last Aug?

A summary of news flow by my fav oil researcher Zengas, with ref to SA-1.

Bechme is at least 3 billion bls based on UBSs interview with MOL at Pula Croatia conference in May.

Bijeel was estimated at 500-750 mmbls but came in at 2.4 billion bls mid case estimate.

Bechme is about 4 times larger in size than Bijeel and UBS acknowledged that 3 billion bls for Bechme was a tentative estimate only back in May 2010.

GKP certainly active on all fronts and we should at the least be able to know the results of 3 of our major blocks this year if not 4 if Berbahr spuds as estimated this month/early April.

1. Shaikan 1 and 3 both tied into production system and capable of circa 20k bopd.

2. Shaikan 2 drilling with 10k bopd tested and should be penetrating additional zones over the next few weeks - hopefully much higher OIP estimate.

3. Sheik-Adi 1st 50m saturated oil Creatceous zone to test after deeper zones penetrated first.

4. Bijeel 2.4 billion discovery and to be put on production this year according to MOL. (Announced as a 3400 bopd discovery after 13 weeks of drilling).

5. Bechme now spudded by MOL. (12.8% net)
6. Berbahr also due to spud imminently by Genel (40%).
7. Sheik-Adi results (80%).

Based on 3 billion bls OIP at Bechme, 4 billion at Berbahr and 4 billion at Sheik-Adi, then points 5,6 & 7 may Rrepresent involvement in an additional 5.2 billion bls OIP relative to GKPs share or at 30% recovery = some 1.5 billion bls net recoverable to GKP if successful - regardless of Shaikans huge potential.

There is imo nothing at all priced for any success in the other block prospects. This should and will be imo the defining year for GKP in terms of value.

i will be out agsin today just on a hunch i might get back cheaper - either way in my view worth the risk - gkp has been good but stifling / choking now
one crafty guy from texas and his companies
take care all

More from Zen on where we are at present.

Shaikan 4 well spud imminent as the 2nd AOS rig (and larger, more powerful 20000 hp) is now there.

AOS Discoverer 4 2000 HP land rig in Kurdistan on contract to GKPi Kurdistan March - September 2011 + option for 6 month extension'.

AOS Discoverer 1 1500 HP is drilling Sheik-Adi. (When this is freed up it will commence drilling Shaikan 5 (see recent GKP presentation)

See - http://www.kse-aos.com/ (Atlantic OilField Services/KS Energy).

Bechme spudded last week by MOLs Kalegran unit.
Genel also must be near to spudding BerBahr (estimated March 2011).

So we have -

Shaikan 1 successfully drilled - tied to production.
Shaikan 2 drilling (10,000 bopd flow so far from 1 zone).
Shaikan 3 successfully drilled - tied to production.
Shaikan 4 New 2000hp rig arrived - imminent spud (see link above).
Sheik-Adi drilling (at the least 50m saturated oil zone to flow test).
Bijeel 1 succesfully drilled - Mol estimate on production this year.
Bechme spudded 1 week ago by Mols Kalegran.
Berbahr - estimated March spud - so also imminent.
Shaikan 5 - estimated spud mid year after Sheik-Adi.

While Bijeel might have taken a significant time, this didn't detract from a flow test/discovery of 3400 bopd after just 13 weeks - so may be wrong to dismiss Bechme as being ages for news and ultimately it will all depend on either difficult or favouable drilling conditions.

Most comprehensive drilling programme ever, hopefully to an upwards reserves revision on Shaikan and the entire 4 blocks drilled with wells/news over the coming months. I see us in one of the most defining periods ever for the company as regards value acheivement and potential bidders emerging.

from today's ft:

Chinese to drive energy M&A
Chinas oil and gas companies are set to continue their global mergers and acquisitions drive this year after the countrys top three groups reported strong profits for 2010 and outlined future acquisition plans. PetroChina and Sinopec plan to spend a combined $36bn on exploration and production investments this year. Cnooc, which spent $9.9bn last year on oil and gas investments, said that its expenditure would continue to rise.
Yang Hua, Cnoocs chief executive, said: In the next few years, we will be more proactive on exploration investments. Chinese oil and gas companies accounted for about one-fifth of global M&A activity in the sector in 2010. Based on company forecasts they will continue to be a significant driver of investment this year, at a time when global oil majors, such BP and ConocoPhillips are shedding assets.

Risk Warning
Contact
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Featured
Experts CornerInformation CenterFeatured / Share Tips Analysing the Net Asset Value of GKP
by ShareRoundup on Jan 30, 2011 3:59 pm 3 CommentsIn this article we will be analysing the Net Asset Value (NAV) of Gulf Keystone Petroleum (GKP ), and will calculate a target price based on that analysis.

Note: Click on the title of each section to view it.

Highlights

Short Term Target (1 to 3 months): 250p

Medium Term Target (6 months plus): 500p

Based on:

Estimated NAV of 3.9 billion
Estimated NAV per share of 517p
Risked NAV per share of 269p
The biggest obstacle in Gulf Keystones way is the contractual disagreement between the Kurdistan Regional Government and the Iraqi Central Government, but if that is sorted by the end of June, GKP should be well on their way to our medium term target of 500p.


_

About GKP

Gulf Keystone is an independent company whose focus is on exploration in the Kurdistan region of northern Iraq.
In November 2007 Gulf Keystone secured interests in two production sharing contracts in the Kurdistan Region of Northern Iraq, Shaikan and Akri-Bijeel. In 2009, the Company diversified the asset base in Kurdistan with the addition of two new Production Sharing Contracts, Sheikh Adi and Ber Bahr. This region has the potential to be a world class hydrocarbon province and Gulf Keystone believes it is well positioned to seek out further growth opportunities.
Gulf Keystone is quoted on the Alternative Investment Market (AIM) of the London Stock Exchange. Ticker symbol GKP.
Strategy
Bring the company into production
Explore, appraise and develop current blocks to realise reserve potential
Regional diversification into high impact exploration / appraisal opportunities


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Asset Summary




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Assumptions

In the calculations, several assumptions were made, mainly because specific data was not available.
1) The recovery factor is 35%. Recovery factors are generally between 20% and 50%, and GKP have not indicated a specific estimate for the recovery factor of each well. The recovery factor could be as low as 15% or as high as 70% (as Hertiage (HOIL) optimistically estimated was possible in Kurdistan); but there is no way to know for sure, and any NAV calculation would be significantly affected by an incorrect recovery factor. The recovery factor is the percentage of oil that can be recovered from each well; so 35% would mean that 35 barrels of oil would be recovered from a 100 barrel find.
2) That the profit per barrel of oil would be 8% of the current price of oil; $90. 8% is a conservative estimate, and 10% to 15% could be expected, but Shaikans crude is heavy and requires a discount. The price of oil has also been predicted to rise significantly throughout 2011 and beyond, and any increase in the price of oil would increase GKPs NAV.
3) The chance of success is 50%; about average for a Kurdistan drill.
4) The diluted working interest was used, rather than the working interest. The diluted working interest is more relevant as it takes into account the Kurdish governments back-in rights; which would most likely be utilised if the drills were successful.


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Calculating the NAV

To calculate the net asset value, take GKPs Shaikan block for instance, we have taken the estimated oil in place (OIP), the mean estimate for Shaikan being 4.2 billion barrels, and multiplied that by the recovery factor (35%), then by the diluted working interest (51%), taken off the Kurdistan Regional Governments 40% tax on profits, and finally multiplied by the estimated profit per barrel ($7.20). For Shaikan, this process places its value at $3.24 billion. Converting this into British Pounds, Shaikans value to GKP is 2.01 billion.
Shaikans value can also be calculated per share. Taking its value of 2.01 billion, we can then divide by the number of shares GKP has in issue; 754.2 million. This values Shaikan at 266p a share; considerably higher than its current share price of around 170p currently, based on this one asset alone.
The risked Net Asset Value can also be calculated, by dividing the NAV with the chance of success. The chance of success has been estimated at 50%, taking into account the chance of finding oil based on the seismic surveys, as well as the chance that political problems in Iraq may interfere. The risked NAV of Shaikan is therefore 50% of 2.01 billion; 1 billion or 1.33 a share.
GKP can also be valued on a per barrel of oil basis; dividing the market cap by number of barrels of oil in place. For GKP this would then be 1.26147 billion (market cap) divided by an estimated 9.3 billion barrels of oil; 13.5p or 21.5 cents a barrel. This calculation could be considered a huge simplification of a companys value, as it does not take into account any costs.


_

GKP's Net Asset Value


GKP has 161.7 million in cash according to their last financial report. To calculate the NAV of Gulf Keystone Petroleum as a whole, this must cash must be factored in. The risked NAV is 50% of the value of the assets, plus the full amount of cash.



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Evaluation

Gulf Keystone has the potential for huge gains in 2011 but is currently being held back by the contractual dispute between the Kurdish Government and the Iraqi Government. The net asset valuation of 517p a share represents an upside of 213% on the current share price of around 165p, and highlights GKPs huge potential. The estimates of oil in place used in the NAV estimate are only the mean estimates, and the best estimates could add 300p or more to the NAV.
Hertiages recent share price collapse does emphasise the dangers of Kurdish drilling, as they found gas where they thought was oil, though Gulf Keystones has already confirmed the presence of significant oil at the Shaikan drill. GKP are also rumoured to be looking at joining the FTSE 250, which could provide renewed interest from investors. They are also rumoured to be thinking about further fund raising, most liking through a share placing; a positive sign as shortly after their last share placing the share price shot up 50%. Historical performance does of course not guarantee future success but the future does look bright for Gulf Keystone Petroleum.


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Risks

The two biggest risks we feel threaten GKPs share price are:
The Iraqi Central Government (ICG) deciding that the contracts the Kurdistan Regional Government had signed with international oil firms, such as GKP, are invalid. A discussion on this is due before July 2011. There have been signs recently that the ICG made decide to uphold these contracts, as they will allow Kurdish oil exports to resume in February.The recent legal claims of rights of up to 30% of GKPs blocks from Excalibur. Little is known about the validity of this claim, but if the New York courts rule against GKP, it could be hugely damaging.

Thanks cyril nic read and hope all comes true.,.

some good new coming