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.

the core of the argument will be whether it is deemed malicious and/or a deliberate and serious campaign to lower the share price - or something along those lines i guess

cynic does it not beg the question why their directors are so sensitive if they are doing so well?

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yes results to be announced on 28th May should confirm their success in 2011.

Getting in ahead of STEAM.

http://www.steam.com.tr/arena/AEPRO3400Eng.pdf

http://www.iii.co.uk/tv/episode/update-gulf-keystone

http://www.investegate.co.uk/Article.aspx?id=201205280700171861E

RNS underwhelming results.

market seems happy enough, but as with HOIL, time and patience is required .... at least both GKN and HOIL (and AFR) have commercial assets - unlike the likes of FOGL and BOR!

cynic their numbers are weak annual sales $6.9m admin expenses $60m?

ah well, you don't like TLW either :-)
if you're a holder from 450, then i'm sure you will be feeling very sore, but at this sort of level, your risk that no solution will be found between N and S Iraq has sort-of halved

cynic market having second thoughts about their results, as you say unless the Kurds and Baghdad settle their differences the sp is likely to drift downwards.

not exactly second thoughts ..... whole market is drifting rather aimlesly back and forth

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a name from the past!

Seymour Pierce note:

GKP’s results this morning hold few surprises. The company reiterated its operational successes (primarily at Shaikan) and laid out its future strategy for both the assets and the company. On the financial side, losses after tax increased to $62.4m from $25.9m driven mainly by a share based payment scheme as well as impairment for an asset held for sale. The company remains well funded with $237.65m of cash. 2012’s numbers will be helped by forecast increased cash flow from production.
Operationally, the company continues to make good progress at Shaikan. In our post site visit note, we described how the company is due to construct a second production facility here which is due online by the end of 2012. Its construction will allow for a substantial increase (30-40,000bbl/d forecast) in production from this field. We had hoped for some more clarity on the sale of Akri Bijeel, which would appear to be taking longer than expected. A result from the Genel operated Ber Behr is now expected by the end of 2Q12. They restated their ambition to move to the main board, but no timetable was stated.
Overall, today’s results hold few surprises. GKP has several key exploration and appraisal wells in 2012, which could drive significant increases in the resource base. The sale of Akri Bijeel will provide a major cash injection. Finally, the company has laid out a development plan which will get them to c.40,000bbl/d in 2013. We continue to be BUYers with a target price of 520p.

latest drilling rns does not look very encouraging to me, but i need the market to determine what it all actually means

http://www.investegate.co.uk/Article.aspx?id=201205290705072899E

Message




This morning the meeting took place with our key team players present… the man TK himself, operating chief JG, finance director Ewen Ainsworth and legal director Tony Peart.

I was tempted to reach for a bacon bap but resisted the urge to focus on the real tasters coming out. I am sure you have all seen the presentation and results posted online, TK led us through the slides. For GKP this was quite a year, 2011 has seen us discover a vast unmatched volume of oil in North Iraq, only one of the sweetest onshore spots in the world remaining. GKP are a running joke even in Kurdistan, we just drill and we find oil.

However down to business, please refer to the presentation as I write, I will flip forward/back intermittently depending on subject. Firstly with respect to Kurdistan as a whole… the "exploration" phase is pretty much done. The smaller E&P companies that entered have had
70% success and we were amongst the luckiest. The risk-it-for-the-biscuit has been done and was achieved by the likes of GKP Genel MOL etc. It is only to be expected therefore that the region looks to enter the "infrastructure" phase, and that means pipelines.

STEAM last Sunday should not be lost on anyone with a business mind or an investment prospect. For years we have all wondered what exactly the KRG had in store given the on-going disputes with Baghdad. Page 6 gives the map from the Kurdish Ministry for Natural Resources themselves on the planned pipelines, this is their map not GKP's. It
is no coincidence that GKP's own planned pipes fall in line with the route. What is not written is that the KRG's plans for 2 million bopd to Turkey will expect to see development of the first pipeline (of 1 million bopd) completed and exports commencing by August 2013 next
year. The second pipeline, we can expect completed by January 2014. What has happened though, is given so many operators/blocks around, the KRG must coordinate with everyone how the infrastructure will be developed, but such details are currently being reviewed. There is also a 3rd planned pipeline for heavy crude of 500m bopd, which would mean eventually 2.5 billion bopd for Kurdistan total.

Of the KRG's 2m bopd target, our intention remains to produce 400k bopd of that and therefore be a huge chunk. The BoD believe that by the time the 1st pipe is completed mid next year we should be able to deliver an aggregate total of 100k bopd. It will take some 4 years to reach capacity of 400k bopd. With confidence it can be said that GKP are crucial to the Kurdish monetization plans, and in turn they have explained the framework on how we will realise our finds into a business via Turkey. The evaluation of pipeline options as mentioned on p.8 ties in with what I explained above in that the KRG and not solely GKP needs to coordinate for the bigger picture.

Our current plan is to reach 40k bopd by year-end using the two EWTs at SH1 & SH3. No problems on trucking, Tawke is trucking 70-80k bopd towards Turkey currently… And there are plenty of trucks in Kurdistan.

To highlight, the two EWTs are important for giving us proper indication on recovery rates. So far we have merely seen small volumes all from fracturing, but the two EWTs when completed will be 30km apart & will allow us to test properly for dual porosity reactions.
This will give us much better indications on recovery factor. These numbers will then be available for CPR.

The CPR will be included on our eventual prospectus for FTSE listing. The listing itself however will not be until after the lawsuit, October later this year set. We will clear Excalibur first to ensure the FTSE route is clear.

Tony Peart sounds very confident Excalibur are just digging themselves a hole. Excalibur are not an E&P company, and in Kurdistan you cannot have any working interest if you're not an E&P. Given our preliminary actions thus far, it's going our way. But to be prepared for worst-case scenario, Excalibur in the most unlikely event they win, would only be allowed damages.. since as stated above they cannot have any operating interest. In terms of "damages", Excalibur have not spent a single penny in Kurdistan. Even if they win the case and are awarded something, it won't be much. Their lawyers will be pleased nonetheless however.

One of the original requirements for FTSE was 3yr's production/income, however the listing rules have changed and this is no longer a requirement. As such, once we put Excalibur to bed the door will truly be open once we appoint the 3rd non-exec.

In terms of monies and a stronger cash flow than we worried about, our local sales currently give us $40-50 per barrel in the domestic market, corroborating the $2.25m per month on existing EWT. We insofar have historically produced a total aggregate 400k barrels to end 2011. In 2012 YTD to May we have already done 200k barrels, and with the joint KRG/Turkish announcements you can expect our domestic/regional sales to pick up further given the clarification towards monetization. TK Ewen & JG all see us reaching 20k bopd by September, and 40k bopd by January 2013, as we upgrade the EWT facilities.

SH8 is not oil appraisal, but gas-handling. The KRG are very stringent about flaring and want to ensure the Kurdish operators are more disciplined than those in South Iraq.

With respect to the BIRs, Shaikan and AB will give us $40m back-pay, yet to be added to our current books of $183m cash/equivalents.

So in terms of finances, we're not stretched. There is additional financial support if we need in loans, even convertibles (p10) with 10-12 banks now. More numerous financiers than we has, so that's an option if we get to that point. Again the KRG/Turkish agreement is paying off for us in many ways. Regardless we are currently financed through to mid/end 2013 with local sales picking up in the coming months.

AB does have current bidders, no names. However don't fret that we want to boost oip numbers, the BoD aren't in a hurry given we have cash and so want to maximise our return on the sale. JG said himself, p11, he believes on AB the Bekhme1 and Bijeel3 are all part of one large structure despite the map, along the area's anticline. What is certainly likely at least is the Bijeel field is bigger than the current green area. We expect upgrades from the 3.6bn current OIP P50. Anyhow on AB sale, the Bod reassures we can expect an announcement in the coming months.

This brings us to our prize among prizes, the jewel of Kurdistan, Shaikan, which has had a great run on appraisal this year. The BoD reinforced that recently they didn't need to test to the good parts that were there, but went for the marginal sections to better understand what we have. We did reach OWC on SH6, 150m below target levels below spill point in the Jurassic and will add significant increments to both the aerial extent and depth of the Shaikan structure. If I take us to the outline of the Jurassic on p13, the current green area on the east of the Shaikan block pretty much extends green all the wall to the remaining blue section of the block and likely into the South too of the neighbouring block. The water contact on SH6 is in the low Kure Chine C or D section, and there it is like what we found in SH4. There is possibly another OWC in the Butmah level but that requires further testing. What we have encountered is extremely high pressure of 19.2 pds/ga in the Triassic, and we need to think how to deal with this. To give some context, the Triassic usually in SH1-3 is more 12 pds/ga, so this has surprised. During SH5 in the Kure Chine D levels there was a significant oil kick with sample gravities in the mid 30s-40s and appears to be sweet. This bodes well the prospectus below. In terms of the Jurassic matrix, the overall fracture or amount of oil retained is higher than expected, where originally it was thought 0.8%, but is now proven to be some 3%. The main takeaway on the back of SH5 SH6 is we can expect an increase again in OIP on Shaikan.

Just briefly on Sheikh Adi, SA-2 is roughly 125m into the hanging wall, the more flexible part of the structure it sits upon. This means we can expect a much better fracture than SA-1. With regards to BB, JG stands by his comment that the structure of Ber Behr is x1.5 times Shaikan, the only thing is we await Genel as they move to understand exactly what it contains. The geology on BB is very different from Shaikan, and the time it's taken is because everything is coming in much deeper. Eg we hit geo-pressures on Kure Chine C level, whereas it's still just normal pressure on BB.

The Shaikan development plan will be submitted to the KRG before the end of the year for approval. On a final note, ERC Equipoise will be the ones leading us on the FTSE prospectus/listing after Excalibur are finally kicked up the backside and booted out of our lives forever.

Overall, as Kurdistan moves into the "infrastructure phase", our Shaikan starts thinking more about EWT and monetized production, and FTSE beckons under a more realistic timeframe post-Excalibur, I almost fancied thinking that we are beginning to see the 'P' and not just 'E' as an exploration and production company.

Is there a new thought forming in my head? Hell yes, we might eventually be able to go it alone with running Shaikan ourselves. Our finances appear to be in order, the KRG/Turkish agreement has our development and production central to their plans. In fact, we are about to become the model E&P company. Baghdad will either agree to what the KRG have done, and if not then Basra and Mosul will look at the Kurdish model and follow suite. This is perhaps the end of the federal Iraq sovereign nation depending on what Maliki does. Todd thinks his days are numbered btw. But yes, not that anyone mentioned it in the room, but some were left hanging at the thought we will turn into a producer. Don’t worry if we’re not sold yet in 2-3 months or by year-end, we might be, the BoD didn’t let on. However, we have done the hard part already. It is simply now just following the plan, and therefore I think we are now in a very comfortable position going forward. Not just oip, but the overall business model.

http://www.proactiveinvestors.co.uk/columns/fox-davies-capital/9496/xcite-energy-gulf-keystone-petroleum-arian-silver-ithaca-energy-and-others-feature-in-fox-davies-newsflash-9496.html