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.

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.


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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

http://www.siasat.com/english/news/iraq-kurdistan-jolted-more-protests

Iraq Kurdistan jolted by more protests

Tuesday, 5 April 2011

Baghdad, April 05: Tens of thousands of people have turned out for protests in a major city in the semi-autonomous Iraqi Kurdistan to demand the resignation of key figures governing the region.

Crowds of demonstrators took to the streets of the region's second largest city of Sulaymanieh on Monday, Reuters reported.

They issued a statement urging the removal of president, prime minister and the cabinet of the Kurdistan Regional Government as well as the dissolution of the ruling structure's parliament.

Because of social injustice, the waste of the region's resources and the lack of law enforcement, we have decided to no longer accept living under a system of governance which is unjust and undemocratic, the statement said.

Also on Monday, protests were held in the Kurdistan region's capital of Arbil for the first time.

Thousands of protesters in Iraq's semi-autonomous Kurdistan region called on Monday for the immediate resignation of the entire regional government, saying it had failed to provide democracy and justice.

Kurdistan President Masoud Barzani announced plans last month to shake up the regional government and enact reforms, but demonstrators have said these fall short of their demands.

Throughout Iraq, citizens emboldened by protests elsewhere in the Middle East have been protesting for weeks against corruption and a lack of basic services, although rallies outside of the Kurdish area have subsided somewhat since at least 10 people died in a day of violent protests in February.

At least nine people have died in the demonstrations in Iraqi Kurdistan, including two members of the "peshmerga", the two ruling parties' former guerrilla armies which are now the region's official security forces.

As I said 2 days ago good news coming

Seems Shiek-Adi is full to the brim,at least according to rumour?

And on the political front,

Iraq News

Dabbagh restricts Iraq government statements to Maliki

Thursday, April 07, 2011 11:49 GMT

Iraqi cabinet spokesman Ali Al Dabbagh announced that the declaration of statements concerning the government is restricted to his ministry, to Prime Minister Nuri Al Maliki and to Foreign Minister Hosheyar Zebari, a source told Alsumaria.

Any statement outside these parties is not recognized, Al Dabbagh said.
Al Dabbagh on the other hand said the governments recommendation to Parliament not to rush the ratification of laws which spurred objection inside the Parliament is due to the need to amend and improve these laws in compliance with the government, he said.

DISPUTES

Exports from the semi-autonomous northern region of Iraqi Kurdistan had stalled because of a bitter dispute over contracts signed with the Kurdistan Regional Government (KRG).

The central government in Baghdad does not recognise the contracts and will not do so, but there was progress on finding a compromise, Shahristani said.
Baghdad has agreed with the KRG that they will deliver oil to the State Oil Marketing Organisation (SOMO) under which oil will be exported with the rest of Iraq's crude and revenues will go to the federal government.

In return, the companies that have invested can submit their invoices to the oil ministry and capital costs will be reimbursed once the invoices have been checked.

"We do not recognise the contracts and the companies will not be paid any profit whether in profit oil or in any other form of compensation," Shahristani said.

Asked about the scope for compromise, Shahristani said there were positive signs.

"Obviously, we have to find a way to deal with this issue. The fact that we reached agreement with them and the oil was handed over to us was a positive step forward. We hope this can be followed by other steps," he said.

Iraq's oil production results in hundreds of million cubic feet of associated gas, which has been flared away because of a lack of infrastructure to capture it.

A long-awaited deal between Royal Dutch Shell (RDSa.L: Quote), Mitsubishi (8058.T: Quote) and Iraq's South Gas Co to use the associated gas is in theory in its final stages.

Sharistani said the energy ministerial committee had studied a draft, which he understood would discuss it further on Monday.

"If a decision is taken, it will be submitted to the cabinet for

Pretty much what its all been about, Iraq will not let them make any profit.

So the only losers are the shareholders of GKP !!

IOM gets oil.
GKP gets paid expenses.
GKP directors and employee's get their salaries and bonus.
Everybody happy and everyone getting paid..........BUT

Shareholder gets a company that makes no profit.


Do you not think its strange the directors are NOT buying loads and loads of shares and filling their boots...... says it all really.

and do you think the sabre-rattling will ultimately win the day?
much of the above will be for domestic propaganda

no company is going to invest in iraq if it is not going to be allowed make a profit
and btw, the statement above says the companies will only be reimbursed for capex, so from where would they get the revenue to pay all other expenses - e.g. salaries and (as you would suggest) fat bonuses?

cynic must agree,nobody is going continue to explore, spending hugh amounts of money,just for costs. Seems that Shanristani is being moved to the sidelines?