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.

Come on....just a teeny..weeenny...trade...(little voice)...come on...

LONDON (Dow Jones)--Exxon Mobil Corp.'s (XOM) controversial deal to explore for oil in Iraq's Kurdish region will undoubtedly change the politics of the industry in a positive way, John Gerstenlauer, chief operating officer for Gulf Keystone Petroleum Ltd. (GKP.LN), said Thursday.

"There is no way that a player the size of Exxon can do what it has done and not change the dynamics," Gerstenlauer said at the Oil Council conference in London. "At the end of the day, it has to be positive for Kurdistan."

Exxon Mobil last week became the first of the major international oil companies to enter Iraqi Kurdistan.

The move has prompted threats from the Baghdad government, which has long said contracts between the Kurdish government and oil companies are invalid, and that ExxonMobil could lose its licenses in southern Iraq if proceeds with the deal.

ExxonMobil's entry into the region shows that the industry has confidence that oil contracts with the Kurdish government will be honored, despite Baghdad's protests, said Gerstenlauer. "It's brought an element of credibility to them," he said.

ExxonMobil's entry, and the prospect that more major oil companies will follow, is also likely to trigger, "a wave of consolidation," Gerstenlauer said.

"If the big boys come in and all [oil license] blocks were taken, they're going to buy stuff," he said. The smaller companies that currently dominate the Kurdish oil sector, "are going to be bought up," he said.

"There's a good chance we'll get bought," he said, adding that Gulf Keystone hasn't yet had discussions with any company that could afford to buy it.

John Gerstenlauer, COO of Gulf Keystone Petroleum, tells Proactive Investors that a full appraisal of the Shaikan oilfield in Kurdistan will be complete on 2012. The current estimates range from 1.9 to 18 billion barrels of oil. John says Gulf Keystone probably does not have the appetite to go it alone and become a major oil company.

Deal Possible Between Iraq, Kurdistan and ExxonMobil on Oil Exploration Contract

By Pierre Bertrand

After several days of loaded proclamations, a deal may be in the offering between ExxonMobil, the Kurdish regional government, and Iraq's central government, in relation to an oil exploration contract the company signed with Kurdistan that the central government calls illegal.

Officials from Kurdistan and the central government met in Istanbul, Turkey to try to work out an agreement. It's not yet known if one has been struck.

Speaking to Reuters on Thursday, Deputy Prime Minister Ross Nouri Shawis said he doesn't believe the central government will likely cancel existing contracts including ExxonMobil's, which grants the company access to the 8.7-billion-barrel West Qurna field in that country.

Because of an on-going dispute between Baghdad and Kurdistan's relationship with foreign oil companies, Iraq's central government hinted Wednesday that it will follow through with threats to cancel ExxonMobil's contract, after it was made known that the U.S. oil company signed an exploration deal with the regional government.

"Generally, there is a majority who wants to resolve this problem, but of course there are other anti views, and this is normal with any topic," Shawis told Reuters.

======================================================================
Cheers Spikey
http://www.ft.com/cms/s/0/13d2ef50-11c7-11e1-9d4d-00144feabdc0.html#ixzz1e3Ouxhyv

November 18, 2011 10:54 am
Trip report: The future of oil in Kurdistan
By Javier Blas in Erbil, northern Iraq

I have spent the last few days touring the oil-rich semi-autonomous region of Kurdistan in northern Iraq, visiting oil fields and interviewing the regions officials and foreign executives. It is boom time for Kurdistan, which optimists hope could soon produce more oil than some members of Opec. As I am leaving, Kurdistan is celebrating the arrival of ExxonMobil , the first supermajor to enter the territory to explore for oil.
But the future will not be a simple trajectory. Here are my observations on the outlook for the region:

Exploration success. The oil and gas map of Kurdistan five years ago was largely blank. Today, dozens of oil fields dot it as companies discover hydrocarbons in commercial quantities in eight of every ten wells they drill. But drilling is not as easy as it appeared a few years ago due to the complex geology of the region and budgets are over-running by more than a third in some cases.
Lots of promises, but a tough reality. The Kurdistan Regional Government expects that production will reach 1m barrels a day more than double the current output of Ecuador, the smallest member of the Opec oil cartel by 2015, up from less than 200,000 b/d currently.
Yet, the future production depends on a political agreement between the KRG and the federal government in Baghdad to approve the long-awaited Iraqi petroleum law, which has been delayed since 2007. While an interim agreement allows for limited exports, which could run at 175,000 b/d next year, companies will be reluctant to invest heavily to lift output towards the 1m b/d target until a political agreement allows the passage of the petroleum law. The KRG and Baghdad say that the legal text will be done by the end of 2012 at the latest, but cynical oil executives in Erbil note that both sides have repeated the same message for the last five years.
The arrival of Big Oil: Five years ago, only a few small companies ventured into the region. Today, the nametags at a recent oil and gas conference in Erbil read like a whos who of the industry. The pioneers, including DNO, an Oslo-listed small oil company, privately owned Genel Enerji of Turkey, and London-listed Gulf Keystone are still there; but new entrants are arriving, including big companies such as Hess and Marathon of the US, Repsol YPF of Spain, and OMV of Austria. Moreover, Exxon, has just become the first supermajor to sign a contract to explore for oil in the Kurdistan. And, say oil executives, diplomats and regional officials, other supermajors could soon join the worlds largest oil company.
The impact of the arrival of Exxon is unclear. Optimistic oil executives say that it could force Baghdad to accept the KRGs demands to develop its own industry, but others say that could sour relationships between Kurdistan and the federal government, delaying indefinitely the approval of the petroleum law. The arrival of another supermajor Chevron of the US, Total of France and Eni of Italy are the names most frequently mentioned could give the KRG the upper hand, however.
The time for M&A. Most of the territory open for exploration has already been snapped up. So new entrants have only two routes: doing a so-called farm-in agreement, whereby a company buys a stake in a field or exploratory area in exchange for financing, or buying existing companies. The KRG, which by necessity backed small companies at the very beginning, would now prefer to see a consolidation in the sector that leaves fewer and bigger players.
After the arrival of Exxon, the market is valuing the current players at much higher multiples, so expect multi-billion dollar deals. Oil executives in Erbil talk in particular about two deals: Gulf Keystone, which could be bought by a supermajor seeking a quick entry; and a potential merger of DNO and Genel Enerji.
Turkey is the new friend. Five years ago, Ankara branded some of the most senior KRG officials as terrorists. Today, Turkish diplomats see Iraqi Kurdistan as a source of energy to power the countrys rapid economic growth. Ankara wants to buy natural gas from Kurdistsan for power generation. Moreover, Turkey wants to consolidate Ceyhan as the oil port of the eastern Mediterranean. The port is already the end of the Iraq-Turkey Pipeline (ITP) and the Baku-Tiblisi-Ceyhan (BTC) pipeline. Ankara would like to see another oil pipeline most likely to low quality Kurdish heavy oil reaching the port and, potentially, a natural gas pipeline from Kurdistan feeding an LNG plant. Ankara and Erbil even dream that the Iraqi Kurdistan could supply natural gas to the Nabucco pipeline.
The Kurdish boom towns. Erbil, the political capital of the Iraqi Kurdistan, is entering an oil boom. The city of 1m people, which still lacks a good hospital, has seen the opening of its first luxury five-star hotel and another three are under construction. Oil executives fly in and out with airlines offering new routes each month. But while money is pouring in, the region has yet to develop services to benefit from it, importing everything from equipment to food. Costs are rising fast too. Housing prices are rocketing and salaries in the oil industry have doubled in the last five years. And with more than 40 companies elbowing for space in Erbil and the region, retaining competent staff is becoming a problem. Local political commentators are already warning that the region, as many others in Latin America, Africa and the Middle East, could see the blessing of oil turnin into a curse.

Shahrestani rocked by waves of his own making
19/11/2011 09:42
Baghdad, Nov.19 (AKnews) - It is inappropriate for Hussein Shahrestani, Deputy Iraqi Prime Minister, to run office in the Iraqi state due to his behavior and mentality which may encourage Kurdistan Blocs Coalition (KBC) to call for his impeachment, a KBC spokesman said today.

"By his behavior, Shahrestani has proved he is a person not fit to run a key office in the Iraqi state. He has created crises between Erbil and Baghdad and today he is trying to create more troubles," KBC spokesman Muayyad Tayyeb said.

Shahrestani believes neither in federalism nor in a new Iraq, "therefore there some ways to question him inside the House of Representatives."

Tensions between the Kurdistan Regional Government and Baghdad tightened in August as Baghdad passed the controversial Oil and Gas Bill in the Council of Ministers in the absence of Kurdish ministers. It granted exclusive authority over natural resources to the federal government. The bill has been referred back to the Council for reconsideration.

Last week Shahrestani warned international oil companies to stop working on oil fields in Kurdistan or their work on Iraqi wells would be suspended. "Supermajor" Royal Dutch Shell was forced to withdraw from Kurdistan to protect a $7 billion USD (8,000 billion IQD) public-private partnership with the Iraqi government and Mitsubishi.

The oil contracts of Kurdistan were made without consulting Baghdad - a step that Baghdad regards as "unconstitutional". Kurdistan maintains the contracts are not against the constitution.

Mr. Tayyeb warned "the Kurdistan Regional Government will not idly by stand and tolerate Shahrestani's behavior. The position Erbil may take could create a new crisis with Baghdad as the political process in passing through a difficult situation."

RB

LH/JS/AKnews

http://www.aknews.com/en/aknews/2/273255/

Perhaps TH is considering a farm in??

http://www.thisismoney.co.uk/money/markets/article-2062385/CITY-INTERVIEW-Hayward-claims-plenty-fuel-left-tank.html

from normde on iii:

I made a transcription of the following points from the John Gerstenlauer podcast just to be sure I heard this correctly:

In the next few months it is anticipated that several other very large players will enter Kurdistan and as most of the good blocks are already taken, they are going to have to buy something. As we have three of the top five discoveries in Kurdistan right now, we must be on everybodys radar. So, we have to be prepared for the probability or very strong possibility of being bought. Not knowing the timing of when that would be and though not proactive about selling, it is prudent to prepare two development plans for submission within the next year one of limited capex for GKP and an unrestricted resource development plan for someone with unlimited capex that can be submitted at the last minute.

http://www.reuters.com/article/2011/11/19/us-exxon-iraq-idUSTRE7AI0XP20111119

http://ekurd.net/mismas/articles/misc2011/11/invest768.htm

After the arrival of Exxon, the market is valuing the current players at much higher multiples, so expect multibillion dollar deals. Oil executives in Erbil talk in particular about two deals: Gulf Keystone, which could be bought by a supermajor seeking a quick entry; and a potential merger of DNO and Genel Enerji.

http://www.thesundaytimes.co.uk/sto/business/Industry/article825752.ece

The Sunday Times..

SpikeyDT
1UP

Hayward seeks new Iraq deal
h
The former BP chief is advancing plans to consolidate oil exploration in northern Iraq after big new finds in Kurdistan

Ben Marlow and Danny Fortson Published: 20 November 2011

Tony Hayward is rebuilding his reputation after leaving BP (Julian Andrews)
Tony Hayward has opened takeover talks with several oil explorers in Kurdistan as his first deal in the region closes.

Shares in his new firm, Genel the result of a merger of his cash shell Vallares and Genel Energy, the largest Kurdish producer start trading in London tomorrow.

The former BP chief wants to lead a consolidation in the semi-autonomous region of northern Iraq. Kurdistan has become a hot new oil province after big finds in recent years. Interest was piqued this month when oil giant Exxon bought the rights to half-a-dozen fields. Hayward has drawn up a shortlist thought to include Aspect Energy and Longford Energy, two small firms with Kurdish operations. He has also held informal talks with DNO, a Norwegian producer and joint-venture partner of Genel. Sources said another candidate is Heritage Oil, the FTSE 250 firm run by Tony Buckingham, a former mercenary.

Hayward has described Kurdistan as one of the last great oil frontiers, but the prospectus to the Genel deal lists 53 separate risk factors for investors, including the possibility that the Iraqi oil ministry may dispute Genels rights to its assets

Interview to listen to :

http://www.platts.com/IM.Platts.Content/insightanalysis/podcasts/oilmatters/archive/2011/nov/oilmatters111711.mp3

.

anyone willing to speculate a sensible bid price?

http://www.investegate.co.uk/Article.aspx?id=201111210818064366S

Following these successful well tests at Shaikan-2 and in anticipation of equally positive results from the Shaikan-4 appraisal well, we plan to design and build an additional testing and production facility for Shaikan-2 capable of producing a minimum of 20,000 bopd. The completion of the ongoing upgrade of the existing Shaikan-1 & 3 EWT facilities will lead to an initial production of 20,000 bopd of Shaikan crude to export specifications by mid-2012. The Shaikan-2 facility will increase this production target to 40,000 bopd by the end of 2012. With Shaikan being one of the three major producing oil fields in the Kurdistan Region of Iraq today, we look forward to making a significant contribution to the mid-term regional production and export targets recently announced by the Kurdistan Regional Government."

http://www.algemeiner.com/2011/11/18/the-kurdish-question/

"Last week, the Saudi-owned newspaper Asharq al-Awsat published a column saying that it might come as a shock for some readers, but it is now inevitable that the Kurds of northern Iraq, who now have their own Kurdistan Regional Government, will declare their independence."

Balerboy here's a post from dalesman which should answer your question?


Having had the privilege to see The Perpetual Optimist develop his work over many months and watch as paradigms were challenged and the complexities of the contracts were unraveled I can say that in my opinion, TPOs work on this epic task, has been outstanding. I suspect that Exxon. Chevron or Sinopec, or even GKP have not developed such a precise analytical tool to value Shaikan.

The Spidy calculator is an excellent tool but it is a broad brush, lacking the precision that an accurate NPV / DCF analysis can give to any valuation.

I now include such a calculation in my own spreadsheets but they too are simplified in comparison to TPOs work on the contracts.

TPOs calculations are anything but simple. They are complex and in my view robust having been subjected to 11 iterations and improvements. I am confident that TPOs figures can be used with confidence when assessing what Shaikan would be worth to a predator.

In coming to an headline figure some assumptions have to be made in constructing a financial model. In TPOs case they are:


1. Extracted barrels / OIP

The number of barrels extracted over the time of the contract has been the subject of intense discussion. TPO has used the words of our esteemed CEO and COO to come to a reasonable figure. If you work his figures back to the OIP needed to achieve his 4.5b extracted, a figure of 15b barrels is required.

This figure has not yet been achieved but given that GKP has already declared 13.2bbls of P10, with, SH4, SH5, SH6 and possibly SH7 results still to add to the total knowledge of the Shaikan intervals it is likely that 15b 2P reserves will eventually turn out to be conservative! Mirabaud is already saying that the full to spill scenario is likely.

2. The recovery factor.

The recovery factor is another key variable that TPO has had to wrestle with. Here we have a wide range of figures available. Tawke with similar oil to Shaikan started off with an 18% RF. The most recent figure has been set at 34%.

Tony Hayward in his presentation to analysts said that a 50% RF would ultimately be possible. GKP COO, John Gerstenlauer has a mentioned a range of values. Recently John has said that somewhere between 25-30% is feasible, however in the presentation to the Erbil conference he has penciled in 33% see page 6.

TPO has used 30% somewhat above Gramachos 25% but considerably less than Tony Haywards ultimate recovery factor. It will IMHO, depend on the balance of production sourced from the Triassic and the Jurassic, along with the effectiveness of Enhanced Recovery Methods applied to extracting oil from Shaikans reservoirs. The Jurassic has a higher GOR and it has a higher API. The recovery factor from the Triassic will be higher than the lower API Jurassic oil.

Given that the range of values available relating to the RF is large- between 18 and 50% - and that enhanced recovery methods will be applied to the Shaikan stacked reservoirs, his decision to use 30% is a well-reasoned value. It has certainly been the subject of intense discussion.


3. The Oil Price Assumption. Another key variable!

Here IMHO, TPO has been ultra conservative, using a $100 long term oil price assumption. Goldman Sachs has raised the specter that the POO could raise to $180 within three years. My own opinion is more conservative than GS but is higher than that applied by TPO. Changing this variable, materially influences the final outcome. In my opinion a predators long-term price assumption will be nearer to Goldman Sachs than TPO, given we are looking across a 30-year timescale. For each additional 10 rise in the price of oil, the return achieved by an operator is likely to increase dramatically. Im sure TPO could supply us with a range of values.

4. The contract.

The complexity of the KRG contract has been unraveled by TPO. The minutiae involved in calculating the transition period between cost and profit oil has been painstakingly unraveled. His application of the fabled R factor is masterful Im not qualified to interpret the complexities of the calculations used but I do know that he has gone to extraordinary lengths to get it right.

So we return to what Scaramouche has correctly identified as the key output figure.

Its taken me a long time to become convinced that the $5.11 that I am currently using in my NAVs may need some upward revision. PTO.s $7.80 headline figure is IMHO a verifiable figures, a benchmark figure, a conservative figure, that we can use to value, the company.

Using my own NAVs , which include fully discounted calculations I get a very similar figure to The Perpetual Optimists, with 6.22 for Shaikan and 8.28 for all blocks using figures already published.

If I up the OIP to 15b and use similar assumptions to TPO I get 8.73 for Shaikan and 10.79 for the company.

HOWEVER if I use TPOs $7.80 I get 10.03 for Shaikan and 12.36 for all blocks.. As you can see we arent a million miles apart and given what I know about the accuracy of TPOs figures I believe his slightly higher figures are accurate and near the bullseye!

Kind regards

Dalesmann.

Mikey on iii

Re: Todays RNS
GKP.L

8 zones tested, aggregated 18,900 bopd
Jurassic test 22nd March, 8,064 bopd
Kurrie Chine B test 5th Sept 2,600 bopd

I make it that SH-2 has a total aggregated production from all zones of 29,564 bopd

By Hassan Hafidh

Of DOW JONES NEWSWIRES


BAGHDAD (Dow Jones)--Iraq is expected to sign Saturday an agreement with four international oil companies to build a multi-billion-dollar oil field water injection plant, a senior Iraqi oil official said Monday.

Abdul Mahdy al-Ameedi, head of the Oil Ministry's Petroleum Contracts and Licensing Directorate, said U.K. super major BP PLC (BP), U.S. giant Exxon Mobil Corp. (XOM), Italy's Eni SpA (E) and Russia's OAO Lukoil Holdings (LKOH.RS) have agreed to build the first phase of the project, which is designed to produce some 4.2 million barrels a day of seawater to be injected into Iraqi oil fields in order to boost production.

"The development agreement of the project is planned to be signed Nov. 26 in Turkey," Ameedi told Dow Jones Newswires in an exclusive interview in Baghdad.

Ameedi declined to give costs of the project but Iraqi oil officials had previously said that foreign companies had suggested the cost could be more than $3 billion.

Exxon Mobil was picked as operator of the project, Ameedi said.


-By Hassan Hafidh, Dow Jones Newswires; +962 799 831 831; hassan.hafidh@dowjones.com


(END) Dow Jones Newswires

And of oui Algerian assets.

http://translate.google.com/translate?u=http%3A//www.tsa-algerie.com/economie-et-business/british-gas-quitte-l-algerie_18260.html&hl=en&langpair=auto|en&tbb=1&ie=UTF-8

dition.cnn.com/video/#/video/business/2011/11/18/marketplace-middle-east-kurdistan-iraq-oil.cnn?iref=allsearch