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.independent.co.uk/news/business/news/hayward-nets-16314m-in-first-middle-east-adventure-2350908.html


.............Tony Hayward has outlined plans to dominate the vast reserves of newly accessible oil in the semi-autonomous Kurdistan region of northern Iraq. The former BP chief executive said his $2.1bn (1.3bn) acquisition of Genel Enerji was just the beginning of his activities in the region.

Potential targets are understood to include Gulf Keystone, the Aim-listed oil explorer focused on Kurdistan, which is rumoured to be preparing for a sale, as well as other operators in the region. The group, which has enough cash to finance an estimated $4bn of further acquisitions, has also identified Libya as a potentially rich source of business, putting operators in the country on its list of possible targets..............

A very valid point,concerning Vlllares deal.

I also noted that in the Vallares presentation, they emphasised the fact that the contracts for their two main blocks were signed pre-2007 which is significant as they were legal under the then law.

http://www.independent.co.uk/news/business/news/hayward-nets-16314m-in-first-middle-east-adventure-2350908.html

legal then and legal now are not necessarily synonymous, especially in that theatre

Well they feel it matters?

hubbert's peak?....reading this month's Bike mag,we have a spread on the end of cheap petrol.bob wine,bp press officer...'there's an awful lot of oil known about,some politically,some technically difficult to extract at the moment. (bp doesn't subscribe to H's peak oil theory)
....'personally i rate chris skrebowski's view very highly. he puts the peak at 2014-15. the elephant in the room is the $450bn flowing out of the U.S and EU to buy oil..dr richard pearson,Lotus engineering.
..this is the end of 'easy oil' we are going into a world where finding the oil and gas is more complex and needs more investment.that means higher oil and gas prices. we have invested $100bn in new projects in the past 7,8 years and expect to invest the same in the next 4....peter voser,CEO,shell.
chris skrebowski,founder,Peak Oil Consulting....'even if you include all the new production it goes tight by middle of next year,and remains tight through 2013,14.....by about 2015 there will be no spare capacity left.this is the point where production can't be expanded above that level. (we could add Libya type curves here)....'then if demands run higher,you get to the really brutal question; Do the Chinese get the oil or do we get the oil,because there isn't enough for both of us'....food for thought eh.

RNS Number : 8674N

Gulf Keystone Petroleum Ltd.

08 September 2011

Not for release, publication or distribution in or into the United States or jurisdictions other than the United Kingdom and Bermuda where to do so would constitute a contravention of the relevant laws of such jurisdiction.

8 September 2011

Gulf Keystone Petroleum Ltd. (AIM: GKP)

("Gulf Keystone" or "the Company")

Notice of Half Year Results

Gulf Keystone will announce half year results for the period ended 30 June 2011 on 14 September 2011.

A presentation for analysts will be held at 2pm at Pelham Bell Pottinger, 6th Floor, Holborn Gate, 330 High Holborn WC1V 7QD. The presentation slides will be available on the Company's website at www.gulfkeystone.com from 2pm UK time.

For those interested GKP Investor Presentations:

DUBLIN - Wednesday 12th October:
http://www.proactiveinvestors.co.uk/register/event_details/124


MANCHESTER - Thursday 13th October:
http://www.proactiveinvestors.co.uk/register/event_details/125

.

I find it difficult to believe this change of ramping attitude Proselenes......why !...we were all Rockhoppy..hippy and anti gulf-key....now....: it's the other way.....it's like a a magnetic pole change !?.....

Try reading post http://www.moneyam.com/InvestorsRoom/posts.php?tid=7803&from=1706 from earlier.

In at 120p and waiting for a sell out point. Looking good for some nice rises in the months ahead.

I do not love or hate shares, they are purely vehicles for making money, no emotion needed.

You sound like a real internet share terminator !....

http://www.bloomberg.com/video/75005944/

Bit more in the media....


http://www.independent.co.uk/news/business/news/tony-hayward-nets-14m-in-first-middle-east-adventure-2350908.html

Independent - Tony Hayward nets 14m in first Middle East adventure
By Tom Bawden - Thursday, 8 September 2011

The former BP chief executive said his $2.1bn (1.3bn) acquisition of Genel Enerji was just the beginning of his activities in the region. Potential targets are understood to include Gulf Keystone, the Aim-listed oil explorer focused on Kurdistan, which is rumoured to be preparing for a sale, as well as other operators in the region..................

RF - a lot of people have been shorting AIM stocks over the summer. They opened up shorts in early and mid summer and have been enjoying all the bad markets.

But now September rollover time is here, and markets are not going down, they are rumbling along and even looking a bit positive now.

So the shorts know its time to close and not rollover, so now heavily shorted stocks, like GKP, RKH, CHAR etc.. are having decent rises as more and more shorts close their positions.

Its what attracted me to GKP back then as per the prior post, a high level of Stock On Loan.

(from the middle of this article)

Commenting on possible risks regarding stability in northern Iraq, Hayward spoke of a pragmatic realism that has emerged between the regional government and Baghdad. This means [one] can invest, he said. [The two governments] have agreed to revenue-sharing mechanisms. Payments are being received and I think all indicators show that things are only going to get better. There will be some bumps in the road, but the train and its direction are clear.

http://www.hurriyetdailynews.com/n.php?n=anglo-turkish-oil-giant-seeks-n-iraq-domination-2011-09-08

Make of this what you like?

Where does the $9/bbl come from that BBBS quotes?

EDIT: the BBBS quote - "And the chinese were ready to pay around 50% more in cash - which would have been around $9/bbl of 2P reserves."

I assume it is an estimate based on the comment by Mehmet Sepil in the Vallares/Genel webcast:

"Vallares's offer ($5.9/bbl) was definitely not the best that they received"

And not too long before GKP announces some 2P reserves.............. :)

Up6p so far,156p and over 2m traded. Could see profit taking soon?

Its Friday and yesterday was a strong day, so no doubt today will see profit taking, but that gets things nicely poised for Monday to be strong on renewed buying without profit takers.

SOMETHING FOR THE WEEKEND SIR?LOL

foonus.
this is worth a read and catch up on BBBS posts on iii,then things will become clearer to you.
==============================================================================
Hello all, long time no see. I've been 'otherwise engaged' of late - have I missed anything? Well, after an intensive catch-up, it seems to me that one or two things have been missed - or perhaps some people just have difficulty with focus (for whatever reason!).

Where do I begin? Well, for me, the size of GKP's success is still all about whether the Jurassic is filled to spill, i.e. where is the OWC and/or how deep are we now concerning LKO (Lowest Known Oil) in the Jurassic. This does not mean that the Cretaceous, Triassic and Permian formations are irrelevant; just that the volumetric (OIP) consequences of a deep Jurassic OWC in Shaikan are overwhelming in the context of what will most likely be present in ALL of GKP's four blocks (Shaikan + Sheikh Adi + Ber Behar + Akri Bijeel). In other words, my focus is on the big picture for the Jurassic as shown in slides 15 through 18 in the May 2010 Investor Presentation. I have posted about this on several previous occasions ... it is the main driver behind the BBBS POTENTIAL button on spidey's NAV calculator.

So whilst I can understand the disappointment of some concerning the poor initial flow test results at Sheikh Adi, I am surprised that the focus has been mainly on this and not on the fact that the well is full of oil - moveable oil - throughout the Jurassic and into the Triassic (RNS of 23rd May "Prior to reaching the Triassic, logs and cores were obtained in the Jurassic sections, which show hydrocarbon saturations and where 45 meters of net pay have been calculated", "A core totaling almost 13 meters was recovered from the Barsarin/ Sargelu Jurassic section which had moderate oil shows", "A core of just over 12 meters was also obtained in the Butmah containing good oil shows", and "In addition, log data indicates moveable oil in the Sargelu/ Alan (obtained in sections deeper than the test zone), Mus and Butmah, all of which would be the target of a future potential test programme"). Ok, so there are less fractures in the down-thrown block, but (a) OIP resides predominantly in the matrix porosity - the 45 meters of net pay - and not in the fractures (fractures are great for providing a flow path from the matrix porosity into the well but the fracture porosity itself is almost inconsequential to the OIP volume - DGA did not even include any volumes for the fracture porosity), and (b), most importantly, there is NO WATER! Think about how this fits into the big picture - in a massive structure the size of Shaikan-Sheikh Adi, there are bound to be some wells that encounter less fractures than others. And one has just been encountered, not unsurprisingly, in the down-thrown, less folded block, that sits between the main up-thrown blocks of Sheikh Adi and Shaikan. The most salient point is this: the down-thrown block between the Shaikan and Sheikh Adi main structures contains moveable oil, NOT WATER.


CONNECTIVITY BETWEEN SHAIKAN AND SHEIKH ADI

I have previously posted about the likelyhood of connection between the Shaikan and Sheikh Adi structures, "Seismic, Sheikh Adi and Sanddunes":
http://www.iii.co.uk/investment/detail?code=cotn%3AGKP.L&display=discussion&threshold=0&action=detail&id=8118898
I get bored with repetition, so please read through that post to follow my rationale for saying:

1. SEISMIC: The 3D seismic will have revealed whether GKP or DGA were correct with regard to closure at the western end of Shaikan. The issue concerns closure (DGA) or not (GKP) at the western end of the main northern W-E fault, i.e. GKP are interpreting that this fault peters out at the western end, thereby allowing connectivity from the Shaikan main structure (up-thrown block) into the down-thrown block that runs west/north-west into Al Qush and Sheikh Adi. Gramacho's recent Q&A with JG gives compelling evidence that the 3D seismic is showing that GKP's 2D interpretation is correct:
http://www.iii.co.uk/investment/detail?code=cotn%3AGKP.L&display=discussion&threshold=0&action=detail&id=8390330

"Shaikan-4
Q. The RNS of 27/5/11 indicated Shaikan-4 is being drilled 6 kilometres to the north-west of the Shaikan-1 discovery well. Looking at the maps it is not entirely clear if the well is being drilled to the south of the northern fault. Presumably the location was chosen from the 2-D? Has it been confirmed as being OK on the 3-D? How close is the northern fault? Are the geos absolutely convinced they will avoid it or is there a risk of crossing it and if so are we at risk of the SA-1 scenario where the Cretaceous is drilled twice ?

A. The well is similar to Shaikan 1 in that it is just south of the northern fault. Indications from the 3-D are that the fault is not nearly as continuous as it appears on the 2D which augurs well for the probability of success for a northern well. It also means that there would not be much impact if the well did cross the fault (presumably because the fault throw would be small and potentially non sealing)."

The above Q&A is highly pertinent to the Shaikan-Sheikh Adi connectivity discussion - the SH-4 well is at the extreme western boundary of the Shaikan block (it sits close to the the boundary between the Shaikan and Sheikh Adi blocks) and is also located very close to the main northern W-E fault that I have been discussing above and in previous posts. So when JG says "Indications from the 3-D are that the fault is not nearly as continuous as it appears on the 2D which augurs well for the probability of success for a northern well. It also means that there would not be much impact if the well did cross the fault", he is saying that it is likely that there is connectivity (communication) across the (non-continuous) northern fault in the vicinity of the SH-4 well location. In other words, it is likely that connectivity exists between the main Shaikan up-thrown structure and the down-thrown block that runs west/north-west into Al Qush and Sheikh Adi. IMO.


2. SHEIKH ADI: In my previous post I tried to help people visualise how the SA-1 well, having passed through a reverse fault, had ended up penetrating the down-thrown block that is common to both Shaikan and Sheikh Adi, ("If you're still with me, then you can picture the SA-1 well starting out in the upthrust SA structure, crossing a reverse fault at around base Cretaceous and then drilling down into the down-thrown side of the block to say hello to Shaikan (the down-thrown block is sandwiched between and common to both SA and Shaikan)"). And that this is exactly where GKP need to be if they want to get close to drilling through the OWC / spill point of the Shaikan structure (refer OWC schematic on page 10 of the June 2011 GKP Presentation). I'll even go one step further, and state that, IMO, SA-1 was DELIBERATELY converted from a Sheikh Adi Exploration well into a Shaikan Appraisal well - with the specific purpose of evaluating LKO (or perhaps even the OWC) at deeper depths in the Jurassic formations. The well became a Shaikan appraisal well as soon as it passed through the reverse fault. GKP had plenty of time to consider the situation as they were re-drilling 400-500 metres of Cretaceous formations after passing through the fault. But they CHOSE to keep on drilling rather than opening a window in the 13 3/8" casing further uphole and sidetracking northwards to remain in the main up-thrown Sheikh Adi structure. So why did they (deliberately IMO) convert SA-1 into a Shaikan appraisal well? The race against time of course. And more accurate pricing of Shaikan BIR that are due to be awarded ... very soon!

Ok, so I've used 'IMO' a few times in my above explanations of how the 3D seismic shows - according to JG - that Shaikan and Sheikh Adi are most likely connected. But I'm not alone - as referenced in the title - Did S* spill the beans? No, I'm not relying on Sanddunes who previously claimed "SA filled to spill"! (although I do still stand by my previous post where I suggested that his source probably meant "SA and SH filled to spill" - more on this below). And I also don't mean Sharistani - although I really look forward to hearing it from him when he get's done with his latest exercise of compiling ICG + KRG resources! No, when I say 'Did S* spill the beans?' I mean Shamaran, check out page 9 in their latest Presentation:
http://www.shamaranpetroleum.com/i/pdf/InvestorPresentation-June-2011.pdf

Yes, they are showing that Shaikan has grown (by a tad more than 5%-10% I would say!) to encompass the Sheikh Adi-1 well location. Now where on earth would they get the idea that Shaikan and Sheikh Adi are connected - at least as far as the SA-1 well location?? Of course this is not the end of the story, it's fair enough that they honour the reverse fault just to the north of SA-1 since GKP have not (yet) drilled a well on the main SA structure. But a future well on the main SA structure - or even a clearer picture from the 3D seismic - will reveal whether this fault is continuous or not and define the final areal extent of the growing Shaikan baby - and, in time, whether it grows into full adulthood to encompass Ber Behar as well. Patience still required yes, but definitely worth waiting for. IMO.

Now of course connectivity between Shaikan and Sheikh Adi is one thing, and filled to spill is another. But IF there is connectivity between Shaikan and Sheikh Adi - as currently suggested by JG and supported pictorially by Shamaran - then some estimates can be made with regard to where we stand today with respect to the OWC, or at least the LKO in the Jurassic:


APPROACHING FILLED TO SPILL: LKO IN SHAIKAN-SHEIKH ADI STRUCTURE

Well, fuch, fuch, fuchity fuch, where's Des when you need him? Still no sign of water in any of the wells drilled thus far. Why are we not pleased? Because water is a prerequisite for the OWC! Then again, perhaps the sp will plummet to 5p when GKP eventually mentions the 'w' word! But seriously, whilst the OWC itself is yet to be penetrated, this does not take away anything from the ever-increasing OIP volumes that follow from each increase in the LKO depth. Lowest known oil is interpreted from log responses recorded over the drilled interval, the primary criterion being evidence for moveable oil. There is some subjectivity inasmuch that different interpreters will apply different requirements for aspects such as minimum interval thickness and average hydrocarbon saturation values over this interval. I mention this only to explain why GKP, DGA and Ryder Scott all came up with different LKO depths in the Jurassic of SH-1. DGA was most optimistic (-1287m SS, Table 3 in January 2010 DGA Report), GKP was most pessimistic (-1127m SS, slide 10 in June 2011 Investor Presentation), and Ryder Scott was in between (-1149m SS, page 80 in RS report). For this reason, I base the following analysis on RS results.

Firstly a review of some key Jurassic depths from SH-1. All depths are sourced from the 'Well Log Data Sheet' table on page 80 in the Ryder Scott report. The surface elevation at SH-1 was 786m, and since there was some slight deviation in this well, I include MD (Measured Depth from surface), TVD (TVD Depth from surface) and SS (TVD depth referenced to sea level). Note that, as you would expect, there is a constant 786m offset between TVD and SS depths:

Well SH-1:
Top or LKO / MD dept / TVD dep / SS depth
Top Sarglu / 1448 m. / 1353 m. / -567 m.
Top Butmah / 1772 m. / 1672 m. / -886 m.
LKO Butmah / 2035 m. / 1935 m. / -1149 m.
Top K.C.-A / 2447 m. / 2347 m. / -1561 m.

- Note that total Jurassic thickness is 994m (1561-567)

- Note that Top Butmah occurs at 32% below Top Jurassic ((886-567)/1561-567))

- Note that Butmah LKO occurs at 39% below Top Butmah ((1149-886)/(1561-886))

An estimation of the corresponding Tops for well SA-1 is shown below. A very reliable source familiar with the matter has informed me that the surface elevation at SA-1 is 930m. Since no information is available concerning well deviation (if any) it is presumed that the well is vertical and so MD depth is the same as TVD depth. Note that there is a constant 930m offset between TVD and SS depths:

Well SA-1:
Top or LKO / MD dept / TVD dep / SS depth
Top Sarglu / 2685 m. / 2685 m. / -1755 m.
Top Butmah / 1772 m. / 2880 m. / -1950 m.
LKO Butmah / 2035 m. / 2921 m. / -1991 m.
Top K.C.-A / 3293 m. / 3293 m. / -2363 m.

- Top Sargelu estimated at 2685m MD (RNS of 11th April: "Drilling operations have finally reached the Jurassic and well operations are on- going. At 7 April 2011 the well was at a depth of 2,685 metres.")

- Top Kurre Chine A estimated at 3293m MD (RNS of 23rd May: "The Sheikh Adi-1 exploration well has reached the Triassic and has cut a core in the Kurre Chine A at a depth of 3,293 meters.")

- Note that total Jurassic thickness is 608m (2363-1755). This is only about 60% of the Jurassic thickness at SH-1; it is presumed correct but there may be errors in both Top Sargelu and Top KCA estimates.

- Top Butmah estimated at 32% below Top Jurassic ((1950-1755)/2363-1755)). This is the same relative depth thickness as SH-1.

- LKO Butmah estimated at 10% below Top Butmah ((1991-1950)/(2363-1950)). The conservative 10% (as opposed to 39% in SH-1) has been applied due to the lower net pay reported at SA-1. There is definitely net pay within the SA-1 Butmah interval since the RNS of 23rd May reported "In addition, log data indicates moveable oil in the Sargelu/ Alan (obtained in sections deeper than the test zone), Mus and Butmah".

So, based on the above estimation, LKO at SA-1 may now have been proven down to -1991m SS. This does of course fall short of proving up the OWC which GKP have estimated from formation pressure data to be at around -2230m SS. However, it is important to realise that LKO at circa -1991m SS is in fact rapidly approaching the PI filled to spill volumes for the Jurassic. I refer again to slides 15 through 18 in the May 2010 Investor Presentation which present visualisations of the mapped volumes as follows:

Slide 15: Top Jurassic TWT P90 (-784m TVDSS)
Slide 16: Top Jurassic TWT P50 (-1169m TVDSS)
Slide 17: Top Jurassic TWT P10 (-1500m TVDSS)
Slide 18: Top Jurassic TWT P1 (-2230m TVDSS)

Indeed, LKO at -1991m SS is closer to P1 than P10! If one assumed a linear extrapolation (strictly it is not), LKO at -1991m SS is roughly equivalent to P3.

Now keep in mind that the May 2010 Investor Presentation was made just a few months after the DGA Report which estimated the following volumes for Shaikan - just down to the 2950m TD depth of SH-1 (i.e. excluding the potential additional 5 billion barrels plus below 2950m):

P90 = 1.9 BBO
P50 = 4.2 BBO
P10 = 7.4 BBO
P1 = 13 BBO

As an aside, I would just comment that Todd's off-the-cuff remark about 13 BBO was probably just an in-memory number about P1 from the time of the 'old' DGA report. He obviously forgot that the old DGA report also mentioned a further additionally upside of over 5 BBO for the deeper Triassic and Permian. And his mind must have been on other matters (can't think what!) as he seems to have completely over-looked the latest DGA estimate of P90=4.86 BBO, P50=7.51 BBO, P10=10.8 BBO and P1=15 BBO - again, excluding any volumes for the deeper Triassic and Permian!

One last thing, you may notice from the above numbers that the 'old P10' has become the 'new P50' - based solely on the new data from the upper Jurassic in SH-2. It can therefore also be deduced from this that SH-2 must have proven up LKO down to around the old P10 depth of -1500m SS. And that's also why only the P1 slide is included in the latest June 2011 Investor Presentation - they have already gone past the old P10 LKO depth at -1500m SS just with the SH-2 upper Jurassic update, the future upside is now firmly focussing purely on P1 (i.e. filled to spill). You don't need to be a rocket scientist to realise what OIP numbers will out when the circa P3 LKO depth of -1991m SS from SA-1 is incorporated - just re-visit Todd's CNN interview - but please keep in mind that 10-15 billion barrels is only down to 2950m (excludes the deeper Triassic and Permian). Oh, and it excludes a 5% to 10% enlargement of the overall size of the Shaikan structure. Oh, and it does not include any volumes for Sheikh Adi, Ber Behar and Akri Bijeel. Bummer eh?

GLA,

BBBS

P.S. Many thanks to the stalwarts who attended and reported back from the AGM. Wish I could have been there, maybe we will only meet at THAT party - I look forward to meeting up, but hope it's not too soon ...
http://www.iii.co.uk/investment/detail?code=cotn%3AGKP.L&display=discussion&action=detail&id=8408953