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.

Well, I brought in at 120p and glad I did. Things are moving the right way now, so make money.

i too already have a slab, but am tempted to buy more

Great rise today, we may see some selling tomorrow? Only weakness i can see here is the O/Gas law along with the service agreement issues and of course that lew suit.Once(if)they are cleared then who knows where we will end up?

dont forget todz has form.

Bit in The Times, snippet below : http://www.thetimes.co.uk/



".................The Kurdish region of Iraq where GKP operates is attracting a lot of attention, particularly since Vallares, the cash shell of BPs former chief executive Tony Hayward and Nat Rothschild, confirmed that it would buy an oil explorer there last week. The 2.5 billion deal, which effectively threw Mr Hayward and GKP together as working partners on the untapped Ber Bahr block, was music to the ears of the GKP faithful.

In part, GKPs improvement has been amid hopes that the Kurdish regional government would reach an accord soon with Baghdad on an oil law to regulate the industry. And, in part, there were hopes that GKP may soon name a new heavyweight director to bolster its credibility in more sober quarters of the market.

Then there were fresh whispers yesterday about its wells. Supposedly, testing of part of its Shaikan 2 well has showed it yielding as much as 60,000 barrels of oil a day. Meanwhile, its Sheikh Adi well, previously nothing but a disappointment to GKP enthusiasts, purportedly has had a second wind and the oil now flows more freely. An eagerly awaited report on GKPs wells was expected imminently............."


.

http://www.advfn.com/p.php?pid=nmona&article=49164445

Valuation and summing up by Zwngas,although a higher offer for cash than the $1.5bo,was my understanding?


First rate update and look at the pay in Sheik-Adi and Shaikan 4 compared to other wells. Firstly i see a current 6.70 valuation at the moment based solely on known resources !!

Shaikan-2 appraisal well drilling with test, core and log data indicating a net oil column of 126 metres and an aggregate flow rate of over 8,000 bopd
Shaikan-4 appraisal well spudded on 27 May 2011 and is currently drilling in the top of the Triassic. Only the Cretaceous and upper Jurassic have been logged thus far with 278 metres of net oil column
Well logs and core data thus far in the mid to upper Jurassic show a massive oil column with net pay intervals of 278 metres.

Sheikh Adi-1 exploration well drilling with core and log data indicating 256 metres of net oil column.
The gross pay interval in Sheikh Adi-1 is 2,790 metres, 35% more than Shaikan-1.

440,000 bopd pipeline suggest this also features the involvement of the Chinese -ie same capacity roughly as at TatAq (before Shaikan becomes a 300-500,000 bopd producer).

Bechme at near 4800 mts and target depth. Akri-Bijeel block to be sold which will remove upcoming costs for Barkman exploration. Bijeel appraisal well and surface production facilities at Bijeel. Likely that a sale is already lined up and possibly once Bechme known

More Oil in place to come from Sh-2 discovery and much higher pay in Sh-4.

BerBahr spuds middle of next month = 4 weeks.

Known P50 resources now 5.66 billion bls NET to GKP. Vallares paid $1.50/b for Genel resources - so this indicates a further way of valuing GKP (other than reserves which will soon come out imo). On a similar scale to the Genel deal based on net resources- GKPs bet resources value = $8.49 billion or 6.71 per share ! Further OIP upside to come from SH-2 and 4. BerBahr in it for free plus 2nd Sheik-aDI Structure.

All in all, very exciting times ahead imo.

This is where you can piece together the bits of rumours into something coherent.

Something like :

A beauty parade is being lined up with the reason being the sale of their stake in
the AB block.

Pending drill results at Bekhme-1 they expect to sell this stake off for 1.4 billion US$.

Nice :)

"LONDON, Sept 14 (Reuters) - Kurdistan-focused oil firm Gulf Keystone is confident political differences between Iraq and the semi-autonomous region of Kurdistan over an oil law will be resolved by the end of the year.

"It is on the front-burner of business in Baghdad with the Parliament, and local authorities told us they expect it to be resolved by the year end," Chief Executive Todd Kozel said in an interview with Reuters on Wednesday.

Iraq's central government and oil-rich Kurdistan have been at loggerheads for years over legislation that would go a long way towards deciding control of Iraq's reserves.

Oil company confidence in Kurdistan has grown since May when producers began to receive payments for exports after months of haggling between the central and regional governments, suggesting relations between the two had improved.

"I'm so confident it's coming (resolution on the oil law), I don't even contemplate the other," Kozel said.

"Iraq needs oil. Iraq needs revenues to rebuild the country and the only way for them to get it is through oil export and production. It's in the best interests of all Iraqis to resolve the oil and gas law." (Reporting by Sarah Young; Editing by Matt Scuffham)

http://af.reuters.com/article/commoditiesNews/idAFWLA506720110914

DJ INTERVIEW: Gulf Keystone Petroleum To Sell Akri-Bijeel License Stake



By Iain Packham
Of DOW JONES NEWSWIRES

LONDON (Dow Jones)--Iraq-focused oil explorer Gulf Keystone Petroleum Ltd. (GKP.LN) intends to auction off its stake in the Akri-Bijeel license in the Kurdistan region of Iraq to focus on its other projects in the region, Chief Executive Todd Kozel told Dow Jones Newswires Wednesday.

The company has a 20% stake in the Akri-Bijeel license, in partnership with Hungary's MOL Nyrt. (MOL.BU).

Kozel said the license currently contains one 2.6 billion barrel discovery and another drilling prospect with the possibility of an 8 billion barrel discovery.

The company is selling its stake not because it is relatively small but it is immaterial to the company compared with the exploration potential of its Ber Bahr license and the appraisal of its Shaikan discovery, said Kozel, referring to its two other assets.

Kozel said the company is just starting the process to auction the stake adding, "a process like this should generally take 90 to 120 days." He is confident of a quick sale due to the high level of interest in the Kurdistan region from large oil companies.

The company's primary asset, the Shaikan license, has indicated reserves of around 8 billion barrels of oil, he said. It plans to construct a 90 kilometer pipeline from the field to Kirkuk on the Iraq-Turkey border which could be capable of transporting as much as 440,000 barrels of oil a day.

He expects the pipeline to cost around $150 million to construct and take until 2013 to complete.

The field is producing around 15,000 barrels of oil a day, he said, adding the company plans to increase it to 50,000 to 100,000 barrels of oil a day, by which time it should have the new pipeline in place. Kozel said the firm has submitted the pipeline feasibility study to the oil ministry and is awaiting approval.

The Shaikan license is 75%-owned by Gulf Keystone, 20% is owned by MOL and U.S.-based Texas Keystone Inc. has 5%.

The Ber Bahr license is in its early stages and the first exploration well is expected to start drilling shortly. The company has a 40% stake in the project, Turkish oil company Genel Energy International also holds 40% and the Kurdistan regional government holds the remaining 20%.

Shares at 1105 GMT were down 11 pence, or 6.1%, at 170.5 pence in a slightly higher Alternative Investment Market--up 0.4%.

http://www.sharecast.com/cgi-bin/sharecast/story.cgi?story_id=4511344

Usual well researched and thought out post by Zengas.


After todays news, I've re-evaluated my investment in GKP again. What are the upper tier of Ftse250 and indeed 100 companies made of value wise?

The comment by DGA and reproduced on page 23 of the their presentation today is an important one - "No water contact encountered at Shaikan and Sheik-Adi - likely filled to spill"

The P1 figures for Shaikan are from 'April 2011' (but yet a further oil in place increase is due from higher pays and a further discovery) = 15 billion bls.

The P1 OIP figures for Sheik-Adi are from 'August 2011' = 4.8 billion bls.

If you use 33.3% Recovery factor (which is less than Tawke/TaqTaq) you'd get -

Shaikan = 15 b/bls x 33.3% = 5b x 51% net interest (not counting TKIs small stake) = 2.55 billion bl reserves potential before any further discovery upgrades.

Sheik-Adi = 4.8 b/bls x 33.3% = 1.6b x 80% net interest = 1.28 b/bls.

Total reserves potential on filled to spill (which they say is likely filled to spill) before ANY FURTHER additional oip upside, could equal 3.83 billion bls of net reserves to GKP. If the same $5.80/b is used that Vallares paid for Genel, then that equates to $22.2b of value or 17.30 per share on 800m shares/options. (We also know other cash bidders were prepared to pay more).

We have to take the "LIKELY FILLED TO SPILL" comment seriously.

The numbers quoted are still said to be conservative and theres still likely further upside from OIP at Shaikan and free upside from the 2nd Sheik-Adi exploration prospect (if similar to the 1st prospect - potentially a further 9.20 per share.

With BerBahr due to drill within 2-4 weeks and a net 40% interest the upside could be substantial if succesful. Using the current estimate of 1.9 billion bls OIP (If a discovery). Using the same 33.3% RF and 40% net interest would give GKP 250 mmbls reserves or 1.80 per share (a similar OIP find to Sheik-Adi filled to spill would equate to about 4.60/share but early days and it could be as large as Shaikan - we won't know til drilled).

If "likely filled to spill" is correct by DGA at Shaikan and Sheik-Adi we could be looking at 17.30/share. Add on any further oil upside from there and a find at BerBahr and theorectically a 20+ target is achievable - more so now than i ever thought realistically possible before.

There is as much multi bagger potential now as there was from 10p to 100p based on the initial prognosis at Shaikan over 2 years ago. If you recall 2 years ago it took ages for some analaysts to move from their 20p valuation on the initial discoveries at Shaikan in mid 2009. Imo the same situation is upon us now, but the upside potential for serious gains is as real now as anyone could ever grasp as those that had the forseight to do in 2009 ! Life changing gains may be made here with study, patience and foresight imo. Time to re-read the Zurich Axioms again.

And one from Dalesman



Hi Everyone

Been away from the boards today - best idea I've had in a long time!

I'm going to get involved in the Mugs Game - valuing without all the data!

So what price the Akri Bijeel block?

I'm going to be very brave and try to value both the drilled and un-drilled blocks at Akri Bijeel.

To return to the question - whats it worth?

Well it all depends!

What do we know?

1. Akri bijeel has 2.4b barrels OIP

2. Beckme is drilling ahead to Australia - Bekhme-1 exploration well drilling below 4,800 metres so probably in the Triassic heading for the Permian

3. AB block will be sold for 100s of thousands (Ewan today). (I like the blue ones on honey comb ice-cream! :0)

4 UBS Warberg expected 7.2b over the whole block divided as follows:

Alkri Bejeel - 1 b
Aqra - 3 b
Beckme - 3 b


In reality the expected 1b at Akri Bijeel turned into 2.4. So much for UBS!

So using a pro-rata upgrade we get :

Beckme - 7.2b
Aqra - 7.2b

This would give a prospective total of 16.8b

This is probably near the truth or even well short of the truth but perhaps a more conservative OIP would be better at this time.

So we get to rumour which currently has Beckme at 5b and perhaps we should let Aqra remain at 3b but it seems reasonable to include the 4th anticline Goleck? at 1b and of course Akri Bijeel at 2.4b

These are the figs I've entered into the NAV

Example A

A total of 11.4 billion barrels.

This gives a total of 393m barrels to GKP.

If we applied the Tony Hayward $5.8 / barrel we get the following: $2239m WOW!

However this would be for fully appraised reserves as well as some contingent reserves - it does show the potential upside to a buyer but IMHO this fig is not achievable.

Example B

If we use the Afren $1-2/barrel paid for contingent reserves we get a range between 393m and 786m

This is much more inline with the 100s of thousands mentioned by Ewan.

Example C

Lets go a little further. Given that a well has been drilled on both Beckme and Akri Bijeel I think that 2.5/barrel would be appropriate on these structures giving

255.6 x $2.5 = 635m + $1/barrel (undrilled blocks) x139.44 = $774m


Of course we may end up with the minimum case:

Example D

AB - 2.4m
Beckme - 3b
Aqra- 3b
Goleck - 500m

Total 307.58m barrels at say $1.5/barrel= $461.57m

This does not include any risking but it does illustrate the range of values possible somewhere between $774 - 461m

At this stage in the game its very difficult to predict a value but somewhere between $ 500m - 774m seems reasonable! This is somewhere between 50 & 1 / share

Looks positive!

I.m preparing a very long post based on the RNS but that is going to take a little longer!

Kind regards

Dalesman

I am very eager to find out how these blocks will be valued in reality! Can't wait!

tp://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/8763385/Gulf-Keystone-and-Rockhopper-unveil-oil-plans-for-Iraq-and-the-Falklands.html

222m asking price according to report.

That is the price WITHOUT the result from Bekhme-1.

Now if Bekhme-1 gives another 6 to 8 billion barrels then the price will be in the 1 billion US$ range for the sale of the 20%.

Lovely.

Onwards to 200p soon.

Back to square one,maybe???



http://www.zawya.com/story.cfm/sidZAWYA20110915071519

15 Sep 2011 AK News

Kurds end negotiations with Baghdad, discuss withdrawal from government

http://translate.google.com/translate?sl=ar&tl=en&js=n&prev=_t&hl=en&ie=UTF-8&layout=2&eotf=1&u=http%3A%2F%2Fwww.burathanews.com%2Fnews_article_136178.html

Good news if true, get cashed up and get on with it. Should see the share price rise strongly again once this placing is done.

http://www.thetimes.co.uk/tto/business/markets/article3166929.ece

"Gulf Keystone Petroleum, an oil explorer operating in the Kurdish region of Iraq, was marked 8p lower to 169p as it looked to raise $200 million by selling new shares to investors at 170p-172p each. Mirabaud Securities was handling the business."

.

well i am based at citi group centre / cw i can tell you name chatter is that short term fund raising should proceed to around $/ 250m - it is not decided how to raise this yet - either way in the short term sp may reverse a little - BUT NOT FOR LONG!!! although denial by kozza ref t/o if push comes to shove at right sp he would not be able to stop it!! gla

Response to Press Speculation
Gulf Keystone notes recent press speculation and confirms that the Company is considering its options with regards to an equity fund-raising.

Further details will be announced as appropriate.