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.

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."

bit of a non day today really - where are the big buys - pls?

Just back from the pub and came across this?


l
From the GKP presentation:

http://www.gulfkeystone.com/uploads/lseoginvestorforumpresentation.pdf

Page 9 highlights the PSC terms.

100% - 10% for royalty
90%
This is then split as up to 40% Cost Recovery, 60% Profit Oil. Any unusued Cost filters into Profit Oil.

GKP are then entitled to 15-30% of the Profit Oil, minus 40% of that for KRG as a special tax.

Let's just say $100 per barrel.
Leaves $90 after royalty.
Assume contractor recovers 30%, so $27.
Leaves $63 as profit oil.

15% of that is $9.45 minus 40% = $5.67
30% of that is $18.90 minus 40% = $11.34

Or 5.67% - 11.34% of the gross production.

The other point is still being missed that the contractor can take cost and profit oil as freely exported crude as per the KRG's own website (Article 28 If I recall?). That would really benefit a Major wanting to secure supply.

Just back from the pub at midnight on a monday??? I hope you are counting the units as you go cyril?

sp is clearly finding the 280/285 resistance very stubborn indeed - most annoying but perhaps like a champagne cork when it is finally breached

anybody popped your cork lately cynic.,.

spat the pip out of my cherry to be more accurate