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.

http://www.iii.co.uk/investment/detail/?display=discussion&code=cotn%3AGKP.L&it=le&action=detail&id=8253155&prevpost=8253133&nextpost=

Very interesting read, many thanks cyril.,.

http://bbjonline.hu/business/mol-could-start-test-production-in-kurdistan-region-of-iraq-as-soon-as-2012_57790

"MOL could start test production in Kurdistan region of Iraq as soon as 2012
MTI Econews

Monday 10:50, May 16th, 2011

Hungarian oil and gas company MOL sees big opportunities in the Akri-Bijeel and Shaikan blocks in the Kurdistan region of Iraq: several exploration wells have been drilled successfully and test production could start at one of the wells as soon as next year.

The Akri-Bijeel block has about 2.5 billion barrels of oil equivalent (BOE) of which at least 20-30% can be extracted.

If the field were to produce 50m barrels it would be a success, according to experts. In Hungary, production of 1m barrels is already excellent.

The find in the Shaikan block is also outstanding and could prove to be even bigger than that in the Akri-Bijeel block.

Drilling in the blocks is expensive: the cost of a single well can reach USD 20m-40m. Three exploration wells will be drilled in the Akri-Bijeel block by the third quarter of 2012, and at least six more wells are planned.

For MOL, the Akri-Bijeel block bears more importance as the company owns a bigger share in it than in the Shaikan block. MOL is also directing the drilling in the Akri-Bijeel block.

MOL decided to acquire the two blocks in 2007, after long negotiations with the Kurdistan Regional Government.

MOL owns rights to 80% of the 889-square-kilometre Akri-Bijeel block and Gulf Keystone Petroleum International holds 20%. It completed the first exploration well there at the end of 2010. In the last phase of the test, the well produced 3,743 barrels of oil per day (BOPD) and 99 BOE of gas.

MOL started drilling the second exploration well in the block at the end of March.

MOL owns a 20% stake of the 283-square-kilometre Shaikan block. Its partners are Gulf Keystone Petroleum, the block's operator, and Texas Keystone.

The Shaikan-1 well, drilled last November, produced more than 4,600 BOPD. The Shaikan-2 well, drilled in March of this year, produced more than 8,000 BOPD and a daily 393 BOE, but MOL expects output to be higher in the production phase. The Shaikan-3 well produced 9,800 BOPD.

MOL also owns a 10% stake in Pearl Petroleum, a project company that has exploration and production rights for two other blocks in the Kurdistan region of Iraq: the 299-square-kilometre Khor Mor block and the 1,169-square-kilometre Chemchemal block. Production of gas and condensate and exploration are underway at the Khor Mor block. Exploration work is ongoing at the Chemchemal block. MOL's partners in Pearl are OMV (10%), Crescent Petroleum (40%) and Dana Gas (40%). MOL acquired its stake in the venture two years ago."

I thought the latest rns was very good but sp and market seem un-impressed. Hoped for a good jump this a.m

now take a look at the market overall - general bloodbath as it freaks out about possibility of greece defaulting (unlikely to be allowed imo)

It should have jumped by 10p at the very least but like cynic says.....bigger news prevails....

Gulf Keystone encouraged by Sheikh Adi-1 progress
StockMarketWire.com
Gulf Keystone Petroleum has revealed highly encouraging progress at the Sheikh Adi-1 exploration well in Kurdistan.

Gulf Keystone said the well had reached the Triassic and had cut a core in the Kurre Chine A at a depth of 3,293 metres.

The core of the Kurre Chine A contains good oil shows and a flow test is to be undertaken shortly.

The company also reports steady progress at the Shaikan-2 deep appraisal well which has been drilled to a depth of 2,655 meters.

The well is now in the top most section of the Triassic age formations and the Company is running casing.

Four cores totalling almost 30 metres have been recovered from the Mus formation, 23 metres of which had excellent oil shows.

An open hole test resulted in a significant flow, although a reliable oil measurement could not be obtained due to technical limitations of the down hole tools.

A similar zone on Shaikan-1 achieved 2,250 barrels of oil per day.

Shaikan-4, second deep appraisal well, 6 kilometres to the north-west of the Shaikan-1 discovery well, is targeted to drill to the top of the Permian.

The drilling rig is currently 98% rigged up at the well site, and is expected to spud before the end of May.

COO John Gerstenlauer said: "We will soon have four exploration/appraisal wells under way in Kurdistan with further wells expected to spud before the end of the summer.

"The company's steady progress in the Shaikan-2 and Sheikh Adi-1 drilling is highly encouraging and we look forward to obtaining more results from these two wells soon.

"The company views the recent announcement by the Kurdistan Regional Government confirming release of the first oil export payment to the KRG as an extremely positive development for all the oil producers in the Kurdistan Region of Iraq.

"This is especially good news for Gulf Keystone since we are preparing to meet the KRG's request to begin oil export at an initial volume of up to 5,000 bopd of crude."


Agreed with you both....looking very red on my list...still lookin good here though.,.

http://www.investegate.co.uk/Article.aspx?id=201105230700100571H

Excellent summing up by the much respected Zengas.

Excellent comprehensive update.

Main points as i see it -

Shaikan 2 now in the Triassic.
Impressive similarity in Jurassic section between Shaikan 1 and 2 wells (which is a span of 9km).
Testing once cased.

Sheik-Adi at 3293m.
Really interesting well as to potential OIP volumes.
45m of 'net' pay calculated in the Jurrasic.
Log Data beyond that of the cores (obtained in sections deeper than the test zones) - Oil in Basarin, Sargelu, Butmah and Mus. As in (acidized) zones in Shaikan 1 will need acid/fracture treatment.
Good oil shows obtained in the Triassic Kurre Chine A at 3293m - Flow test to be undertaken shortly.

Prior to todays news we had an estimated gross 'minimum' 50m interval in the Sheik-Adi Cretaceous.

Once well is complete an extensive cased hole testing programme being considered.

So Sheik-Adi oil in the Cretaceous, multiple zones in the Jurrasic and in the Triassic.

Export news significant with a planned initial 5,000 bopd.

Bechme significantly advanced at 1776m and just in to the Upper Jurrasic (watching MOL for news updates).

Shaikan 4 spud within 8 days.
Shaikan 5 spud after rig down at Sheik-Adi.

All in all excellent news and i beleive a significant discovery at Sheik-Adi in due course which was beleived to be about half the size of Shaikan at the pre drill stage.

i feel an xel type opportunity coming at this sp

sp for gkp is very low right now - bargain despite location of oil

Good news ....and the stock drops....the market is just hopeless at the moment....best to just wait because things will turn around sooner or later.

From GKP's partner.

http://www.reuters.com/article/2011/05/24/mol-surgut-idUSTST00206520110524?feedType=RSS&feedName=hotStocksNews

good news today - even though already known - minute rise now reversing again as expected

what gkp needs is a huge dose of real bad news - this will probably send it north into orbit!! lol

From Evolution today per FT Alphaville:

"Last weeks analyst site visit to Gulf Keystones assets in Kurdistan
highlighted two major catalysts for the company. Firstly, the current
appraisal campaign on the Shaikan structure is aimed at taking the
current PMean estimate of 7.5bn bbls Oil in Place towards the upside
case of 10+ bn bbls Oil In Place. Secondly, the company is making good
progress on commencing exports at a rate of 5,000 bopd but with the
potential for this to rise to nearer 18,000 bopd by year end"

"The company appears to be making good progress towards commencing exports
into the main pipeline negotiating trucking contracts, supply agreements with
DNO and installing gas sweetening facilities at the Early Production Facilities
which will make the oil suitable for export. Initially, rates of 5,000 bopd
(equivalent to c25 trucks/day) are have been sanctioned however, the facilities
and existing Shaikan-1 and 3 wells are capable of attaining rates of nearer 18,000 bopd and this is the target for year end assuming KRG approval. Furthermore, DNOs announcement on 6th June that it had received payment from the KRG for its February/March exports is very good news and proves that the interim payment mechanism is up and running."

"We have raised our Core + Risked NAV valuation slightly to 230p (from 222p) to
incorporate the risked upside of Shaikan however, our TP of 200p is left
unchanged. The discount to Core + Risked NAV reflects the risks associated with
having unapproved PSCs and also the ongoing Excalibur legal dispute. At the
current market price of 158p we believe the share price is underpinned by the
discoveries at Shaikan, Bijeel and cash on the balance sheet, leaving the
exploration campaigns at Sheikh Adi, Bekhme and Ber Behar in for free."

And some projected figures taken from another bb.

GKP Export Production 5000bopd

Minus KRG 20% and TKI 5% = 3750bopd to GKP per day @ DNO price $44 per barrel
= $165,000 per day to GKP.

GKP Export Production 18,000bopd

Minus KRG 20% and TKI 5% = 13,500bopd to GKP per day @ DNO price $44 per barrel
= $594,000 per day $216,8100,000 per year.

GKP Export Production 18,000bopd

Minus KRG 20% and TKI 5% and 15% Back-in = 10,000bopd to GKP per day @ DNO price $44 per barrel = $475,200 per day $173,448,000 per year.


GKP Export Production 18,000bopd

Shaikan (GKP 51% fully diluted)= 9,180bopd to GKP per day @ DNO price $44 per barrel = $403,920 per day $147,430,800 per year

nice one cyril.,.

14 June 2011



Gulf Keystone Petroleum Ltd. (AIM: GKP)

("Gulf Keystone" or "the Company")



Kurdistan Operational Update

Commissioning Phase of Oil Export Operations





Further to the announcement of 23 May 2011, Gulf Keystone is pleased to announce that currently the Company is in the commissioning phase of oil export operations from its Extended Well Test (EWT) facility close to Shaikan-1 and Shaikan-3.



The commissioning phase, involving final preparations and customary checks and tests on all elements of the process, including loading and transportation logistics, as well as metering and receiving facilities, is underway in order to enable the Company to steadily ramp up export volumes to 5,000 barrels of oil per day (bopd) with an eight month target of over 10,000 bopd. To date just over 3,700 barrels of oil have been delivered to the storage tank facilities at the export pipeline injection point.



Prior to commencing the commissioning phase the storage tank at the EWT facility was emptied of approximately 21,000 barrels of oil, which have been sold into the domestic market in order to allow preparations for oil export to commence.



All volumes of oil are in addition to those previously reported in the Annual Results on 11 April 2011.



The Company will provide a further update on oil export operations once the commissioning phase is complete and stabilised export volumes have been injected into the Kirkuk-Ceyhan pipeline.



John Gerstenlauer, Gulf Keystone's Chief Operating Officer commented:



"Gulf Keystone is making good progress toward commencing oil exports from our Shaikan facilities at the initial intended rate of 5,000 bopd following the current commissioning phase. We look forward to delivering stabilized export volumes of Shaikan crude for shipment via the Kirkuk-Ceyhan pipeline."

http://www.investegate.co.uk/Article.aspx?id=201106160700065191I

Starting to rise.....with all these wells on going, it's not surprising...perhaps good for 160p plus once again !.

A post from the respected Zen and comments from another top pi.(former mamagement)
------------------------------------------------------------------------------------------------------
Something to think about -

We might not see a specific price known for the Back in rights for Shaikan (if indeed the Koreans do get them) but the following may give an idea as to the relavance of Shaikan BIRs and who might build a pipeline if called upon to do so.

Extract from interview with Dr Seong-Hoon KIM, Vice President Korea National Oil Company (AFTER 5th JUNE 2009) and from the Kurdistan Oil and Gas Year Book 2009.

SH-K: "Fisrt of all we think there is great potential to acquire more blocks in the area.

Secondly the Kurdistan region has little pre-existing infrastructure. As a consequence , the posibility of an oil for development programme, where KNOC provide infrastructure in exchange for the oil supply from the region, is a winning combination for both sides.

After the Bazian deal, we spent another year to negotiate the oil for development programme and signed the second deal in November 2008, theerby becoming the largest investor in the Kurdistan region.

We are confident that once our success in the Kurdistan region is recognised by the Baghdad government, they will be willing to welcome Korean investments in the rest of the country".

Interviewer - "You are involved in Qush Tappa, Sangaw North and South, Bazian, and four Hawler blocks." (This equal the 5 blocks which were previosly made up of 8 smaller blocks). Please introduce your work programmes so far and walk us through the licences, their differenes and work programmes"

S-HK: Amongst the 5 blocks we are the operator on three of them. In respect of the remaining two, Norbest operates Hawler and Sterling Energy opearates Sangaw North.

I beleive that within two years we can drill all five blocks, making signifiacnt oil discoveries. Within 5 years we will start production. Projecting ourselves further we may have a huge production profile within 10 years.

Interviewer:" Does KNOC have ambitions to invest in the downstream and mid stream opportunties avalaible here?"

S-HK: I certainly beleive Kurdistan needs downstream projects. SOME PORTION OF THE $2.1B OF INFRASTRUCTURE PROGRAMMES MAY INCLUDE A STORAGE FACILITY PROJECT PROPER FOR US. ONCE AGAIN IF THE LOCAL AUTHORITIES WANT DOWNSTREAM PROJECTS THEN WE ARE WILLING TO INVEST IN SUCH.

We are ready to start building a power station with two 150 megawatt units and a power substation with a 400 kilo volt transmitter systenm as a initial project. The MOU was signed on the 5th June 2009 with the initial investment worth about $600m."
================================================

DNOs capacity building bonus for Tawke was $150m and no sign on fee for Tawke at the outset (As GKP at Shaikan $10m fee + capacity building bonus of $15m paid at start).

The Koreans (KNOC) paid a sign on fee of $10m for the Bazian block (+ $20m as a capacity building bonus).
Sangaw North cost $10m and $25m for the capacity building bonus.
Norbest paid a total of $25m and $175m capacity building bonus for all 4 Hawler blocks (now 1 major block known as Hawler).

Finally the Koreans (KNOC) and that $2.1b support. (Page 136).
They paid nothing TO THE KRG for the sign on fee for their other block interests.
Capacity Building Support - nothing.
***"Conditional Capacity Building to be paid" = $2.1b***.
"A down payment of $200m is already released to a segreagated KRG account. The remaining amount of $1.9b is not payable in cash. INSTEAD INFRASTRUCTURE PROJECTS SHALL BE IMPLEMENTED BY KNOC AS REQUIRED BY THE KRG TO THE TOTAL AGREED VALUE OF THE CAPACITY BUILDING AMOUNT. THE FIRST TWO PROJECTS (POWER PLANTS) TO THE VALUE OF $600M HAVE ALREADY STARTED, THESE TWO PROJECTS WILL ALSO UTILISE THE DOWN PAYMENT OF $200M" (Therefore only $600m of the $2.1b amount has been used - leaving $1.5b still to come from the Koreans - but they must have oil and at 2011 Bazian didn't find much oil only gas as so far has Sangaw North and Norbest to my knowledge on the Hawler blocks havent drilled yet) "OTHER PROJECTS ARE UNDER EVALUATION."

Now before anyone wonders what the back in rights for Shaikan may be worth - we may never know (if they are awarded as rumoured to the Koreans).

Even after the Koreans had the 8 original blocks shares (now 5 larger blocks) they then said
- "Fisrt of all we think there is great potential to acquire more blocks in the area.

They also have agreeed to give the KRG $2.1b in exchange for oil - but the blocks they have, have not proven up much oil to date - so they have to get oil in exchange for the KRG getting that $2.1b.

There's still $1.5b to come from the Koreans agreement of providing $2.1b towards KRG infrastructure of the KRGs choosing. From the start it was 'CONDITIONAL' Do not rule out the Koreans funding a massive pipeline (look back where they spoke of storage facilities and downstream).

Finally in return for some $2.1b from KNOC - well you could see the 15% Shaikan Back in rights being tied into this 2008/9 agreement ie to quote KNOCs Vice President " where KNOC provide infrastructure in exchange for the oil supply from the region, is a winning combination for both sides."

------------------------------------------------------------------------------------------------------

GRH: let us consider Zengas' excellent post above (many thanks Zengas) in the light of our own assessment of the situation on another KNOC investment that we discussed yesterday.

If I were KNOC I'd be inclined to say to Todd something like "look. your company cannot afford to develop its full acreage on current indications of its potential, only a state-owned oil company could ever do that. if you try to do it you will end up with colossal dilution, decades of work, and a managerial nightmare. you're a young man, you can go again on some exploration acreage, you have a lot of fans, they will back you. why not sell it to us?"

but imho DYOR etc as alw

Thanks for the posts niceonecyril...always interesting...on the sp front : nice rise...sharp vertical upwards surge coming perhaps ?....