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.

Can't find it myself but it seems a 2m buy at GENL(£17m),perhaps why GKP recovered ?

Peak oil back as an issue.

http://www.madhedgefundtrader.com/the-resurrection-of-peak-oil/

http://uk.reuters.com/article/2012/01/25/iraq-kurds-oil-idUKL5E8CP1W320120125

.

y Ben Lando and Staff of Iraq Oil Report
Published January 26, 2012


BAGHDAD - The Parliament Oil and Energy Committee is exploring a way to guarantee the sanctity of contracts already signed by both the central government and the semi-autonomous Kurdistan region, in an effort to secure political progress on the long-delayed oil law.

Contrary to local media reports, a crucial law to govern Iraq's highly disputed but massive oil sector is not on the Parliament's formal agenda, as the country weathers a political crisis. Yet the Parliament committee responsible for the legislation is planning to push it forward, and key players consider the recognition of all existing contracts to be the single greatest prerequisite for political progress.

An official close to the legislative process, speaking on condition of anonymity because of the tenuous political situation, said negating any of the contracts would require a legal battle and cause harm to the business environment in Iraq.

"For existing contracts, (the Parliament) should not vote on whether they are null and void," the official said. Instead, the official added, there is growing support among some key MPs to formally validate the deals through either a provision in the oil law or a political agreement that would ensure a retroactive grandfathering process – though there is not yet a specific proposal on the table.

Baghdad has signed 12 oil and four gas contracts, and the Kurdistan region has signed 48 oil and gas deals. Each side questions the other's legal standing.

A conservative reading of Iraq's existing laws and the vague provisions in the 2005 Constitution would suggest that the contracts require ratification by the Parliament – a view that some MPs have advocated but both the central and Kurdish government have resisted. New oil legislation could potentially resolve the ambiguities.

The disputes over the oil law are technical in nature, but they carry important political implications.

Sources within the committee say the central government and the Kurdistan Regional Government (KRG) disagree on five key issues: the oil authority given to local governments; the makeup of a federal council that would set policy; the procedure for making contracts; the review of future contracting; and how to rule on the contracts signed prior to the law.

According to people involved in political negotiations, the question of existing contracts is the biggest obstacle to progress.

The Parliament committee has three different draft laws before it: a version initially agreed to nearly four years ago, to which the Kurds have suggested specific alterations; an amended law pushed by the central government's deputy prime minister for energy affairs, Hussain al-Shahristani; and a draft crafted under the oversight of Parliament oil committee members with the backing of the Kurds.

In a country where 95 percent of government revenue comes from oil, the technical structure of the oil sector also shapes the powers of the state. Parliament committee members have said that legislative progress will only continue through a political agreement.

Last fall, Iraqi Prime Minister Nouri al-Maliki and KRG Prime Minister Barham Saleh agreed that their respective oil ministers should meet to clarify their agreements and disagreements, hold one-on-one negotiations based on a February 2007 draft of the law, and send their proposed amendments to Parliament as a basis for new legislation.

That meeting, which was supposed to take place by the end of the year, never happened.

The KRG has sent numerous communiqués to Baghdad, a committee official said, including Minister of Natural Resources Ashti Hawrami's preferred amendments. The official said the committee will consider Shahristani's recent draft to be the preference of the government, unless the Cabinet submits its own analysis of the 2007 version.

The Parliament committee version of the law was given half of a first reading last year, interrupted by a walkout by members of Prime Minister Nouri al-Maliki's State of Law bloc, who refused to return until the law was shelved. In a December interview with Iraq Oil Report, Shahristani said the Cabinet version was the only legitimate draft.

The Parliament committee is now considering taking an internal vote on the three different draft laws. If one gets a majority vote, the committee will send it to the full Parliament. If not, all three will be sent to Parliament, sources within the committee said.

First introduced in a draft by three Iraqi oil experts in late 2006, the oil law was amended during political negotiations between representatives from Baghdad and the Iraqi Kurdistan Region. It morphed so much that two of the three authors withdrew support in early 2007, around the same time that the Baghdad-Kurdistan agreement fell apart.

Since then, Baghdad has signed 16 new oil and gas deals, and is readying for another contract licensing round, this one for exploration blocks.

The KRG has signed 48 production sharing contracts. At first, smaller companies struck deals for mostly unexplored land; over the past year, Kurdistan has landed bigger names, including most recently ExxonMobil, which took six of the few remaining open acreages.

The Exxon signing brought a sense of urgency to the oil law process.

The company had already signed a massive development deal with Baghdad two years earlier for the West Qurna 1 project in Basra, and Baghdad has warned Exxon to back away from the KRG deals. Exxon has not shown any sign of retreat, and Baghdad's lack of recourse has underscored the liabilities associated with pursuing oil development without a clear legal regime.

"The law must be legislated and endorsed by the Council of Representatives as soon as possible," said Susan al-Saad, a member of the committee and part of the Fadhila Party. "Otherwise there will be many future problems for the oil ministry to experience, as well as for the local governments in all provinces."

In Iraq, however, political conflict often takes precedence over national priorities. And right now the coalition government is rife with open hostility, as the Iraqiya political bloc officially continues a boycott and contemplates leaving the government for an opposition role. Meanwhile, several Iraqiya bloc members have been arrested and charged with terrorism.

Leaders have called for a national political conference, ostensibly aimed at ending the political crisis, but they have disagreed even over where to hold it.

Kurdish leaders, too, are upset with Maliki, as he consolidates power and refuses to budge on demands to decentralize the oil sector and move forward with other oil-related legal, financial and land disputes.

"The Parliamentary Oil and Energy Committee will not be able to look to any draft of the oil and gas law unless there is a political deal among all the political blocs," said Bayazid Hasan, an MP from the Kurdish Goran Party. "The center wants things for this law and the KRG wants things different."

Just came across this,

that is interesting


Exxon results 31st January- after the bell? Gkp present 1st Feb before mkt opens. Mmm.

http://www.gulfkeystone.com/events.aspx

A posters update of todays presentaion.

My broker has returned from the presentation.
3 things quickly.
1. They can supply 80000 bpd now.
2. Todd gave the air of a man who was not going cheaply. My previously very conservative broker came back with telephone numbers in 4-5 years time. His opinion is no near term takeover but perhaps a XOM joint venture. He is now very bullish.
3. Shaikan keeps getting bigger and bigger nod nod wink wink.

Just my brokers personal views and report. dyor!

in the meantime, a friday afternoon sell-off, so if you're bullish then perhaps buy near the close

LSE Presentation

m0lineux







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I went to the forum this morning and saw six oil and gas companies present one of which was our beloved gkp, represented by Todd Kozel.

The following are my notes and in no way are guaranteed or to be interpreted as a recommendation of any sort. ALL the usual caveats apply.


Currently looking for 3rd non executive director. Stressed that they are striving for quality in NED's from a corporate governance viewpoint. GKP are the most active company in Kurdistan with five drills currently turning.

The upside potential on Shaikan is 100% based upon 8-13 bn barrels of oip.

The strike rates in Kurdistan are likely to move towards worldwide averages and not be like shooting fish in a barrel in terms of discoveries.

They are NOT calling AB a discovery yet. Estimated to contain 2.5 bn barrels and then went on to say that BB is the same as Shaikan if successful in terms of the drill site I think (later referred to BB as 1.5 times Shaikan).

The preliminary development plan has been finished and submitted and includes 122 km pipeline, cost $150m plus or minus, bidding on the pipeline in the next couple of months, operational by end 2013, Shaikan capable of 500-550k bpd then plateauing at around 450k, multi wells off single pads, between 50 - 60 wells.

Intend to maintain drilling pace for foreseeable future: May/June sh 1, 3 & 4 40k bopd would mean self funding program's going forwards, then sh 2, 5 & 6 November 2012 to 60k bopd.

Currently funded thru 2013 including pipeline, development and appraisal.

Big play of involvement in Kurdistan including sponsoring seats at university and employing locals first wherever possible. Gone from 17 to 800 Kurds on the books.

KRG target of 1m bopd gkp will be a significant part of that. Considerable amount of respect between KRG and gkp. Proven premier operating company in sector.

Short and sweet presentation said TK.

Turning into appraisal and production company. Can produce 80k bopd now. Experienced no delays at all on anything with respect to politics and made great play of avoiding whole political issue. Stays well out of it. KRG very responsive and gkp not only have permission for pipeline but have encouragement for it.

Working for April admission to main listing.

When question cam up about refining in southern Iraq, said "I would'nt want to build a refinery in southern Iraq I don't about you".

FWIW, this is what I noted. The overriding impression I got is one of a man who wants to take his company up the ladder a few rungs and who has the discoveries to do it. Time will tell whether or not he gets the chance. One thing I do feel is that I'm not at all sure I would want to be negotiating with him. I get the impression that if he doesn't like what is said, the next thing you would see would be his back leaving the room!

GL All

Posted on 26 January 2012.
http://bit.ly/x7mAmA

Despite objections from Baghdad, ExxonMobil already has personnel on the ground in Iraqi Kurdistan, according to Reuters.
“They [Exxon] are definitely here and they are definitely assessing living and working accommodation … There are around 10 individuals here at any one time looking at what it takes to fully mobilise here – office space, housing space, these types of things. No oil company comes in in a day.“

Kurdish-Media

"They (Exxon) are definitely here and they are definitely assessing living and working accommodation," said a Western industry source in Arbil, at the heart of Iraq's northern Kurdish region.

"There are around 10 individuals here at any one time looking at what it takes to fully mobilise here - office space, housing space, these types of things. No oil company comes in in a day."

http://bit.ly/zQiWDr

A down to earth post.

Need to keep real.
Currently Iraq gets $106.18/b (published Dec 2011 figure).
For KRG contracts deduct 10% royalty per barrel.
Deduct a guess of lifting costs once the project is running at TK's 450,000bopd, say $5/b cost.
For GKP PSC take 15% of the profit - the maximum allowed at that stage (see GKP's PSC terms on the KRG website)- and then take 54% of that as GKP's working interest.
Then take off the 40% of profit oil the KRG also get.

The number I get from this is....
$4.40 profit per barrel to GKP.
Over 25 and 30 years thats $16.835b profit or $20.202b at current prices i.e. ignoring potential rises/falls in the price of crude.
An £8 a share offer for say 930m shares, if you include options and the 5% ownership not in GKP's name, equates to an offer of about $11.755b.

orvis - 27 Jan'12 - 16:43 - 155905 of 155914

Further to my post 155898...

25 years and 30 years at 450,000bopd, if you say 340 days a year to allow for maintenance, equates to total production of 3.825bb and 4.59bb.
If you use a recovery factor of 30% the figures for total oil reserves would be 12.75b and 15.3b - 25/30 yrs respectively

From The Sunday Times tommorrow (posted on LSE) -


"Total, the French oil giant, is close to securing exploration rights over several oil and gas blocks in Kurdistan, northern Iraq.

The deal, which could be announced within weeks, will intensify the land grab in the semi-autonomous region after several big finds. It will also heighten tensions with the federal government in Baghdad, which considers such deals illegal.

Oil majors have stayed out of Kurdistan for years because Baghdad threatened to freeze them out of deals on the country’s giant fields in the south. That left the region open to dozens of smaller players.

Genel Energy, a London-listed firm set up last year by former BP chief executive Tony Hayward and Nat Rothschild, is the largest producer. Gulf Keystone, also listed in London, has seen its shares soar amid takeover speculation after a big oil find.

Heritage Oil, founded by Tony Buckingham, a former mercenary, has made a large gas discovery.

Industry insiders said the move by Total is the clearest sign yet of belief in the industry that Kurdistan — which produced virtually no oil five years ago — could become a big new producer. Sources close to the situation, though, said the deal could still fall apart. Chevron and Conoco Phillips, the American giants, are also understood to be angling for the final pieces of land held by the Kurdish government.

The scramble comes despite a long-running impasse in Baghdad over oil royalties that has left some companies unpaid. A federal oil law was first tabled in 2007, but it has yet to be ratified.

The interest in Kurdistan is also an indication of growing frustration with the rest of Iraq’s industry, which is constrained by bureaucracy and the worsening violence.

In November, Exxon Mobil became the first big oil company to challenge Baghdad by doing a deal with the Kurds, signing licences for half-a-dozen exploration zones.

Having attracted smaller firms to the region, the Kurdish government is keen for the industry’s biggest players to develop the reservoirs they have found. Ashti Hawrami, the Kurdish oil minister, has set a target of 1m barrels of oil a day in production within four years. In 2007, Kurdistan produced 2,000 barrels a day from a single well.

Both Total and the Kurdish government declined to comment."

From Dalesman - 29 Jan'12 -

I've been saying for months now that February was key..

Why Feb - well as I've said many times before:

1. The subcontracted fracture report that will define the recovery factor is due in February
2. The DGA report that accompanies the fracture report is due in February
3. The fracture report should allow 2P reserves to be booked as we have a verifiable RF
4. Ber Bahr - the last undrilled component of our four blocks is due to report in February
5, Exxon annual report is due in February
6. Sh4 test results are due out in February and
7. With it an uplift in OIP already signalled by Todd

I don't need Spencer to tell me February is important!

It doesn't take a genius to see that February is key - I've been saying it for months!

More on the Total news,i wonder if it will create as much excitement as when the news EXXON became public?Doubtful more of a ripple at best?

http://www.bloomberg.com/news/2012-01-29/total-nears-exploration-rights-deal-in-kurdistan-times-says.html

Latest rumour from the poster who called SH4 correct,is that BB is tight?

Tight hole.


A section of a wellbore, usually openhole, where larger diameter components of the drillstring, such as drillpipe tool joints, drill collars, stabilizers, and the bit, may experience resistance when the driller attempts to pull them through these sections.

whatever!
meanwhile, sp is still ticking slowly north, and against this morning's trend, and order book is once more about 4:1 bid/offer

Nice to see the book is strong,lets hope for good news from BB.

An interesting piece on EXXON.

ngthroughthefog.blogspot.com/2008/07/where-does-exxon-mobil-get-its-oil.html

Good volume so far,4m+ and 280p looking as though it maybe breached,wpuld be nice if it finished above 280p at close?

sp really needs to break north of about 285 (see chart) and with some impetus .,.... my only minor concern with this stock is that all the buying looks to be PI

Have we been her before,hoping it's not another false dawn??


Jan 30 (Reuters) - After five years in the making, Iraq's parliament could have a first reading of a landmark oil law by early February, a senior Iraqi energy official said on Monday.

Adnan al-Janabi, head of Iraq's oil and energy committee, said he "hoped for some movement next month" on the legislation that is crucial to resolving a bitter feud between Baghdad and the semi-autonomous Kurdistan region over oil rights.

Janabi's committee has been poring over two versions of text that address the core disagreements between Baghdad and Arbil: the role of the governorates, the composition of the federal council, the ability of the regions and governorates to sign contracts and the issue of previously signed contracts. "My committee for more than a year has been debating, trying to focus on where to go," Janabi told reporters on the sidelines of an oil conference. "We are very close to going forward to parliament for a vote - and parliament will decide on which wording they will use."

He said one version considered all of the existing oil development contracts to be legal and another called for the deals to go through a "review process".

Janabi said that ultimately it was the job of the federal council to decide the fate of Iraq's existing oil contracts.

Baghdad has signed a series of service contracts with foreign oil companies that targets production capacity of 12 million barrels per day by 2017 - up from about 3 million bpd.

Arbil has sealed more than 40 production sharing contracts with foreign firms: exports have been running around 100,000 bpd. Kurdish authorities insist they should keep the right to manage oilfields in their region and have the right to strike deals, a demand seen by Baghdad as undermining its central control over this vital industry.

A move by Exxon Mobil to sign an exploration deal with Kurdistan further fanned the flames and Baghdad threatened to take action against the oil major, which also has a deal with the central government to develop a southern oilfield.

The new hydrocarbons law is crucial to Iraq's efforts to rebuild from decades of wars and sanctions by providing investors with a more solid legal framework.

But it has been held up by infighting among the Shi'ite, Sunni and Kurdish political groups that form Iraq's fragile coalition government led by Shi'ite Prime Minister Nuri al-Maliki. (Reporting by Peg Mackey, editing by William Hardy)

Fox Davies today
"Gulf Keystone volumes were very interesting today, with nearly 10 million shares changing hands before lunch, on a quiet day in the market. We will be watching the news wires over the next few days to see if anybody reports the sale. An interesting point to note from the last Kurdistan operational update, was John Gerstenlauer, Gulf Keystone's Chief Operating Officer comments, "Initial results of the Shaikan-4 well testing programme are very encouraging with logging results indicating that Shaikan-4 may be the best well which Gulf Keystone has logged to date in the Kurdistan Region of Iraq. We look forward to adding to our already outstanding drilling success in the region by completing further Shaikan-4 well tests, which will be followed by more results from the Shaikan-5 and Shaikan-6 appraisal wells before the appraisal programme of the Shaikan world-class discovery is completed. Initial results from the Ber Bahr-1 exploration well and progress in the 2012 wide-ranging exploration, appraisal and early development programme of the Akri-Bijeel block are also highly anticipated." So the market will be looking for updates from Shaikan-5 and Shaikan-6 over the coming weeks."