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.

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

ideo.ft.com/v/1287915920001/Oil-majors-could-follow-Exxon-into-Kurdistan

Rudaw: Bickering Over Oil and Gas Law Hurts Foreign InvestmentPosted: November 22, 2011 in Iraqi Dinar/Politics
ERBIL, Iraqi Kurdistan Energy experts say that foreign investors are concerned about the bickering over Iraqs oil and gas law and may be reluctant to invest in the countrys vast natural resources until legislation is passed.

For years, Baghdad and the Kurdistan Region have disagreed on the details of Iraqs oil and gas law including whether regions can strike deals for natural gas projects.

The Kurdistan Region has its own investment law and the central government still works under laws from Saddam Husseins era.
A new row between Baghdad and Erbil started last week following reports that the Kurdish authorities had signed a contract with the American oil giant ExxonMobil, which already has an existing contract with Baghdad.

Jonathan Brown, Kurdistans project manager for the Canadian oil company Talisman Energy, which currently works in three different oil fields in Kurdistan, said the lack of clarity regarding Iraqs oil and gas laws will hinder foreign investment in the region and Iraq.

Its a big problem; any company that wants come to Kurdistan or Iraq, the first thing they talk about is the law issue, he said.

Todd F. Kozel, chairman and CEO of the British oil firm Gulf Keystone Petroleum Co., maintained that oil-related conflicts between Baghdad and Erbil will hurt the industrys development but remains hopeful that the issues will be resolved.

Our company has invested millions of dollars in its projects in the Kurdistan region and I believe that KRG and central government will solve the issue, or we would not have invested a lot of money in the region, he said.

There were reports late last month that Iraqi Prime Minster Nuri al-Maliki and Kurdistan Regional Government (KRG) Prime Minster Barham Salih agreed to amend Iraqs 2007 oil and gas law by December 31.
That law was approved by most of Iraqs political factions.

In August, Kurdish officials were upset when Iraqs cabinet hastily passed a new draft of Iraqs oil and gas law without consulting the Kurds. A previous draft of the law had sat in Parliament since 2007.

Kurdish leaders accused Iraqs prime minister of becoming authoritarian and creating an economic dictatorship.

Natt Arian, a Kurdish investor based in Australia, believes that foreign investors have the right to be concerned about Iraqs oil and gas law because it needs to protect their business. Arian also said the KRG should do more to attract foreign investment.

Kurdistan should do more to expose the region to foreigners and give them more information about the situation, he said. For example, Australians havent got a lot of information about Kurdistan.

Thank you cyril.

http://www.google.com/hostednews/afp/article/ALeqM5i42TJcw68Y8tFr5oN4juFfrtTGfA?docId=CNG.d0e0071962fb3e6dd7f4c30ba30ff803.301

http://www.rttnews.com/Content/GeneralNews.aspx?Node=B1&Id=1767214

RTTNews) - The United States has urged Iraq to draft a revenue sharing agreement to enable foreign energy firms to invest in the national energy sector in a legally viable and sustainable way.

The call was made by U.S. State Department spokesperson Victoria Nuland at a routine press briefing on Tuesday.

When a reporter sought the U.S. government's response on Exxon Mobil Corp. (XOM: News )'s oil deal with the Kurdish regions of Iraq, Nuland replied that "the United States has advised all of our companies, including ExxonMobil, that want to invest in the Iraqi security sector that they run significant political and legal risks if they sign contracts with any parties in Iraq before there has been a national agreement to work out the complex issues having to do with oil revenue distribution within Iraq."

She noted that "for many years, the United States has been urging all parties in Iraq to enact the necessary national laws that can govern the oil and gas sector because the sooner they do that, the sooner companies can invest in a legally viable way."

She said the U.S. government had advised the country's energy giant to wait for national legislation before signing any deal with the Iraqi oil sector.

When the threat of an Iraqi sanction on Exxon was brought to her notice, the spokesperson said that "our message to the Iraqi government and to all the parties involved in the crafting of national legislation (on a revenue sharing agreement) is that this is overdue, that it is in Iraq's interest to get this done so that companies like Exxon can invest in a way that is legally viable and sustainable."

.... etc ....

General Electric Co. has opened its first three offices in Iraq, extending the conglomerate's involvement in infrastructure projects in the war-torn nation.

The new offices are located in Baghdad, in southern oil-and-gas hub Basra and in Erbil, which is located in the Kurdish region in the north.

"Iraq's economy holds enormous potential, but a sustained growth will require fixing the country's battered infrastructure as well as investing heavily in the industrial and government sector," the company said Monday.

The move comes as U.S. military involvement is winding down. President Barack Obama in October announced he would bring all U.S. forces home from Iraq by the new year, ending a war that stretched nearly nine years.

While the first of their kind, GE's office openings in Iraq follow more than 40 years of company involvement in the country. In its release Monday, GE cited a host of its products playing a role in the nation's infrastructure projects.

The company said more than 130 of its gas turbines feed Iraq's power grid, helping to limit the impact of chronic electricity shortages. In another instance, GE said refineries, petrochemical plants, and municipalities in the country are using the company's advanced waste-water treatment plants.

GE said it plans to recruit more than 200 Iraqi nationals.

"We will support the country's economic diversification and partner in infrastructure development through public and private partnerships," said GE Vice Chairman John Rice.

The company has lately been working to refocus on its industrial roots, plans that have seen the conglomerate undertake a spate of acquisitions aimed at expanding its energy infrastructure business.

US Position On Iraq Oil Deals Misrepresented
23/11/2011 By HAWAR ABDULRAZAQ ALI

ERBIL, Iraqi Kurdistan -- The US State Departments position on oil exploration contracts signed with Iraq have been misunderstood and misrepresented, analysts said yesterday after it was claimed that the US had warned its oil companies about signing deals with the Kurdistan Region.

In fact the US state department position on US oil companies signing contracts in Iraq has not changed and was repeated yesterday by spokeswoman Victoria Nuland.

She said US companies had been advised as a general principle about the risks of signing deals with any parties in Iraq until a new federal hydrocarbon law and revenue sharing law is in place.

"The United States has advised all of our companies, including ExxonMobil... that they run significant political and legal risks if they sign contracts with any parties in Iraq before there has been a national agreement," on how to distribute oil revenue, Ms Nuland said yesterday.

ExxonMobil, which has business in the south of Iraq, recently signed a deal with the KRG to explore for oil in 6 areas, prompting a furious reaction from the oil ministry in Baghdad.

According to a senior industry analyst, who spoke to Rudaw on the basis of anonymity, the phrase any parties in Iraq was deliberately crafted by US officials to avoid the singling out of the KRG and also to cover the signing of deals with the federal government.

Headlines such as todays AFP story US warns of risks in Iraqi Kurdistan oil deals are misleading and misrepresent what the state department actually said, the analyst said.

In London for a conference on Iraq on Tuesday, Deputy Prime Minister of Hussein al Shahristani said Baghdad was considering imposing sanctions on Exxon Mobil after its decision to sign a deal with the KRG.

But a few eyebrows were raised when he claimed that the US government supported his position. "The Iraqi government is considering sanctions, and will inform the company before they make a public announcement," he said, adding the United States government had been unaware that Exxon had been in negotiations with the Kurdish authorities.

"The position of the US government has been that they were unaware of it and if they had been asked, they would have obliged (Exxon) to get approval of the Iraqi government." Sharistani was quoted as saying.

Critics wondered why Shahristani would choose to speak on behalf of the Americans.

He is a self-appointed energy supremo for Iraq, now he is a self-appointed spokesman for the US, said the Iraqi oil analyst.

However, the state department spokeswoman said that US policy on all Iraq oil deals was consistent.

"For many years, in fact, the United States has been urging all parties in Iraq to enact the necessary national laws that can govern the oil and gas sector," Nuland said. "The sooner they do that, the sooner companies can -- can invest in a legally viable way."

This was a repetition of the stance taken on November 14 by another State Department spokeswoman Nicole Thompson.

She said: It is in the interests of all Iraqi parties to enact a set of national laws to govern the oil and gas industry and to develop a revenue-sharing system thats equitable. One those laws are approved they would provide a strong, modern legal basis for Iraqs hydrocarbon sector and it would allow Iraq to develop its substantial resources for the benefit of all Iraqis.

Some officials in the federal government, including Shahristani, have claimed that the Exxon deal with the KRG is in breach of Iraqi laws.

But in the absence of a federal hydrocarbon law, it is not clear which laws Erbils opponents are talking about.

Shahristanis advisors often appear to refer back to the laws of the Saddam era.

However, Article 13 of Iraqs new permanent Constitution renders such legislation void.

The Constitution, which proclaims its own supremacy, provides:

"First: This Constitution is the preeminent and supreme law in Iraq and shall be binding in all parts of Iraq without exception.

Second: No law that contradicts this Constitution shall be enacted. Any text in any regional constitutions or any other legal text that contradicts this Constitution shall be considered void."

The deals with Exxon were signed under Kurdistans Oil and Gas Law which was passed by the Kurdistan Regional parliament in 2007. That parliament and the Region is recognized in Iraqs permanent federal constitution. Oil and gas are not listed as one of the exclusive powers of the federal government, and regional laws have supremacy whenever there is a clash with federal laws.

Said the oil analyst: It is ironic given the mood for decentralization sweeping the region that some in Baghdad appear to want to go back to centralized control. They dont realize that the age of the dinosaurs is over.