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.

One of many posts today,a long one but so much info,worth taking time to study.


A "strategy for value creation"

An interesting day was had, up at Park plaza Victoria hotel where Todd Kozel and board faced the baying barbarian hordes. Didn't quite turn out that way - much to the annoyance, no doubt, of M&G, Asher and the numerous derampers and whisperers that have slithered out of the woodwork over the last year.

Have to say it was a slick presentation - JG was exceptional in my opinion.

We started off with some introductory speel from Todd emphasising how we were moving from the explorer phase to being a producer, the aim being to monetise the OIP in addition to continuing further explo.

TK highlighted GKP's operational success - 18 wells drilled, not a single duster. Quite incredible for an Oil explorer.

Regarding Adnan Sammarai's move - apparently he's moved to the MNR to be a special adviser to Hawrami..

PF1 is due to go "live Oil" in next day or two.The delay has been down to technical delays. PF2 due to go live October.

The CC has been an annoying diversion, and they expect a result on 23rd August at the latest.

The aim for Full list is September/October, with the appointment of a non exec chairman the first step along that road. This means the CPR will be due September ish as well, and a final declaration of "Reserves"

Vis M&G - apparently M&G have not approached GKP, nor discussed their move according to TK. Regarding their 4 proposed NED's TK described them " small company men", not suitable for a Ftse company. The fruits of independent background searches into these four will be revealed in a soon to be released RNS.

JG then took the stand for an Operational review. And what a presentation. It's clear he is very passionate about GKP and a worthy member of the board.

OIP 19bn barrels with significant upside potential in the permian
19th well will be spudding soon, Shaikan 10.Development &Production well.

PF1 complete and ready for commissioning. 40,000bopd by end 2013. All in a short space of time. Compared to Kashagan this was remarkable - 15 years, $45bn and still no production.

As an idea of how big Shaikan was we had a couple of graphic illustrations, one of which showed Shaikan stretching from Heathrow all the way to City airport. Shaikan alone is Huge.

**
So far so good. Operationally we seem to be storming ahead. $780m capex for 18 wells, none of which have been dry.

Down to the financials.
Of the $780m capex over 60% of that has been spent on Shaikan raised, and here my notes get hazy c 70% via Equity placings, and then a $2575m convertible bond?? The aim apparently is to move more to debt issuance so as to reduce equity dilution. Presumably no more convertible issues as well then!

Production
2013 E 8500bopd, with rest of 2013 from now averaging 17000bopd.
Increasing by 5000bopd increments per month
ie July 5000bopd,August 10,000bopd, Sept 15,000, October 20,000bopd.

October PF2 will be feeding in as well. Hope to be at 40,000bopd BY JAN 2014.
October 5000bopd via PF2,

2014E 40,000bopd (in revenue terms @$100/bbl $292m)

Assuming Brent $100/bbl, Shaikan crude trades at circa $80/bbl - GKP share $20/bbl.(I think I heard this correctly)

In terms of revenue/capex.
2014 Capex $471m, versus $292m. Shortfall funded from bank account balance + I presume BIR's etc and KRG's share of funding requirement now that FDP has been approved. Apparrently for every increase of 40,000bopd capex required will be c $380m.

No resolution regarding increasing the share capital so there will be no Equity placing for forseeable future. Aim is to finance internally as far as possible then use debt if necessary. So production increases will be scaled as per the purse allows

It was also mentioned that, as a result(perhaps tongue in cheek) of TK's relationship with KRG it had been arranged for access to the export pipeline that passes within 10km of Shaikan to be accessed via a "Spur" - saving $310m capex. :)

And onto the Q&A. First up Gramacho, with 8 questions!
1) How robust is the 40,000bopd target and is it from jurassic only.

JG: "Very robust. 3 wells per facility(PF1/PF2) more than capable of 15,000 bopd PER WELL and from Sargalu only.

2)Final plateau of 400,000bopd target @ risk due to low flow rates in Esastern side of field??
Eastern side not as good as flow rates yes. Might need some fraccing down the line, we shall see.

3) Ber Bahr 1 - is only the Jurassic producable??
Production of c 2000bopd was limited by the jet pump used(Capacity of 2100bopd) probably better production with a bigger pump.

4) Is Ber Bahr linked pressure wise with Shaikan/Sheikh Adi.
No

5) What happened to the 10m share trasnfer?
TK - very open. Harsh divorce settlement - had to set up a financing agreement and was required to satisfy divorce arrangements "immediately" once out of closed period.

6) Why was Ber Bahr 1 taken from first test straight through to field development with no more drilling. This wa a surprise and unheard of.
genel ready to give up and it seems GKP persuaded them to do the side track , which yielded the positive results

7)How many days per month will new chairman, Simon Murray, dedicate to the job
As many as necessary...TK was very positive about the appointmnent

**
Hardly a surprise as its quite a coup, in my view, hiring such a well known big hitter for a smallish AIM company.

8)What is the profit per barrel to GKP -
Assuming $100 Brent, JG estimated costs per barrel as $5-10/bbl(with GKP footing 50% of that) After sunk coats being amortised, field operational costs,and other incidentals a figure of $20/bbl was mentioned. -
Todd mentioned there will be discussions with KRG next wednesday regarding off takes/export agreements

9) Given the spate of good news any explanation why the GKP shares have been so volatile.
Hard to answer - mentioned share price being driven by lawsuit, general market sentiment as well as other issues.

10) Can you justify the $7m loan to you by GKP?
Again Loan was part of the figure required for his divorce settlement which is sounding like it was extremely expensive. In additional he passed remarks pertaining to the Gokana rumours - Gokana did not, he claimed, sell shares at £4 and there is a PWC audit to prove this. So all bulletin board speculation is just that - utter speculation. And wrong.

We then had a brief over view of the remuneration committee. Most of the variable performance pay relates to 2009-2011 period,and is deferred. hence Todd's remuneration isn't quite as large as we all believe. The poor guy hasn't had a pay rise, salary wise, since 2004! No LTIP awards were made either in 2010. after Shaikan discovery apparently.

NB Simon Murray will, going forward, be chairing the Remuneration Committee.

11)When do you expect to move from AIM to FTSE?
Sept / October, meaning CPR will be out before then with Reserves..

12) are parts of the Shaikan PSC outside the "Green Line?"

This stumped everyone, The KRG apparently does not recognise the green boundary (and apparently it depends which green line we talk about as there are several according to JG!)

13) When is the latest time the BIR's can be awarded??
TK rather diplomatic - essentially the KRG government decides when, and to whom.

14) When does the company expect to be in profit?
End of 2014/Early 2015

Some other rather humourous questions, one from a gentleman that asked "My wife would like to know if you expect to be here next year!" There was also a rumour put about by SKY news that TK had said he would resign if the 4 M&G NED's were voted in. As SKY hadn't approached him he was unsure where that quote had emanated from.

All in all, a very enlightening Investor Day presentation. Not that I was troubled prior the day itself did leave one feeling better about one's investment. Moves are well and truly afoot - whether GKP is snapped up post CC we shall all soon see.

Will be adding more myself.

p.s Apparently the Investor Day was recorded so a webcast will be up, on the website, at some point. not checked yet myself as been thumbing through my notes.

Worth adding.


Guys and Gals

The one thing I forgot to mention this morning(which I have not seen on any of the boards) is during JG's presentation the slide named "Demonstrated Drilling Success".....he said don't worry about the lower figures to the right compared to the early tests.....Because we are only testing the marginal zones,,,,Not the good zones,which we have got tremendous confidence with from detailed logs/previous zone tests etc ......This made me think--Remember all that exitement 20 months ago about.....only testing the bad bits and look at the flow rates....!!.....Here we are again.....Certainly needed to have a beer after the lunch..!!....very positive IMHO

g

09:13
Re: Audio record of Investor Day – Prese...
pathai
10
1. Todd Kozel open dress (22.5 mints)
Todd was a bit nervous.
hxxp://dl.dropboxusercontent.com/u/57127575/GKP/130704_TKOpenAdress.mp3

2. John Gerstenlauer operation update (26.5 mints)
Yes, he said PF1 production only a few days away

hxxp://dl.dropboxusercontent.com/u/57127575/GKP/130704_04JG.mp3

3. Ewen Ainsworth Financial up date (13 mints)
hxxp://dl.dropboxusercontent.com/u/57127575/GKP/130704_05EwenAinsworth.mp3

4. Lord Guthrie about new chairman Simon Murray and new NEDs (7.5 mints)
hxxp://dl.dropboxusercontent.com/u/57127575/GKP/130704_06Guthrie.mp3

5. Todd Close Dress: developing of production, aspiration, KRG (12.7 mints)
Todd at this time was really relax, passion and enthusiastic.

hxxp://dl.dropboxusercontent.com/u/57127575/GKP/130704_07ToddCloseDress.mp3



First, gramacho questions, many..

hxxp://dl.dropboxusercontent.com/u/57127575/GKP/130704_08QApartOne.mp3

oldtrout is the last one questioned, but his another question in part two.

hxxp://dl.dropboxusercontent.com/u/57127575/GKP/130704_09QApartTwo.mp3
More View thread 2 Respond Vote up

LONDON (Reuters) – One of the biggest shareholders in oil exploration firm Gulf Keystone hit out at the company’s corporate governance standards and “excessive” executive pay on Sunday.

M&G Recovery Fund, which owns a 5.1 percent stake in the company, said in a statement that it still needs to do more to strengthen its board, just days after Gulf Keystone hired a new chairman.

Former Glencore chairman Simon Murray was appointed on Thursday to head up the board, splitting the chairman and chief executive roles to improve governance ahead of a planned move to London’s main market from its junior exchange.

“The separation of the roles of chairman and chief Executive is a step in the right direction but there remains much room for improvement,” M&G Recovery fund said, adding that it has asked to meet Murray.

In June, the investor called for four new directors to be added to the board.

M&G is not alone in calling for a boardroom shake-up. The Sunday Times reported that Capital Group, another shareholder, shared M&G’s concerns over corporate governance and pay.

Gulf Keystone, which said on Thursday it was engaged in a search for another independent director, declined to comment on M&G’s statement while Capital Group could not be reached for comment.

Shareholders will have the opportunity to vote on the new directors at the annual meeting on July 25. They will also vote on the re-appointment to the board of two existing directors, who M&G said it will be voting against.

M&G said that it expected a strengthened board to review directors’ salaries which it considered excessive and that such a board would also help Gulf Keystone’s share price begin to reflect the value of its assets.

Gulf Keystone’s prize asset is an oil field in the Kurdistan region of northern Iraq. Analysts say the region’s long-running dispute with Iraq’s central government over payments for oil and a legal challenge to ownership of its oilfields, have both weighed on Gulf Keystone’s share price, which has fallen 24 percent over the last 12 months.

Gulf Keystone has not yet made any recommendation on the proposed new board members who include its former deputy chairman Jeremy Asher, and John Bell who has in the past worked on projects for BP and Statoil .

0 0

July 7

Recently, the two sides have moved to patch up their differences.

Kurdish ministers and MPs ended a boycott of the cabinet and the parliament in May, which was begun in March over objections that the new federal budget did not allocate enough money to pay foreign oil companies working in the region.


In June, Maliki chaired a landmark cabinet session in Arbil, the capital of the autonomous Kurdistan region, and the two sides agreed to form joint committees to deal with disputes.

Kurdistan's deputy prime minister Emad Ahmed said in a statement on the region's official website that Barzani's visit was a follow-up to Maliki's trip to Arbil.

Barzani was to be accompanied by Ahmed, as well as the ministers in charge of natural resources and the Kurdish peshmerga security forces, the statement said.


Read more: http://www.foxnews.com/world/2013/07/07/iraqi-kurdistan-chief-on-rare-visit-to-baghdad/#ixzz2YNwhIcju

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A lot to do with the KRG now having it's own pipeline imo,nice to know rhat GKP will be allowed to link up to it.

http://www.investegate.co.uk/gulf-keystone-petrol--gkp-/rns/response-to-m-g-recovery-fund-statement/201307080700077629I/

NS Number : 9642I

Gulf Keystone Petroleum Ltd.

10 July 2013

Not for release, publication or distribution in or into the United States or jurisdictions other than the United Kingdom and Bermuda where to do so would constitute a contravention of the relevant laws of such jurisdiction.

10 July 2013

Gulf Keystone Petroleum Ltd. (AIM: GKP)

("Gulf Keystone" or "the Company")

Spudding of Shaikan-10 Development Well

Gulf Keystone, a leading independent E&P operator in the Kurdistan Region of Iraq, is pleased to announce that further to the approval of the Field Development Plan for the Shaikan field, a world class commercial discovery, announced on 26 June 2013, the Company has commenced its development drilling programme with the spudding of Shaikan-10. In parallel, production operations from the newly commissioned Shaikan production facility ("PF-1") are scheduled to commence shortly.

Shaikan-10 to launch aggressive development drilling campaign

Shaikan-10, the Company's first development well, spudded on 5 July 2013, launching a development drilling campaign as part of the approved phased development of the Shaikan field, which Gulf Keystone operates. The well is being drilled with the Weatherford 842 rig, which previously drilled Shaikan-8, also part of the agreed phased development. This rig also drilled the Shaikan-1 discovery well in 2009 and the Bijell-1 discovery well in 2010.

Shaikan-10 will be followed by a minimum 3-rig development and production drilling programme, which will commence in early 2014.

Shaikan-10 is intended to become a production well and is to be tied to the second Shaikan production facility ("PF-2"), which is currently under construction. Analogous to PF-1, it is of modular design and its production capacity will be of 20,000 barrels of oil per day ("bopd"). Shaikan-2 and -5, already completed as production wells, will also be tied to PF-2.

PF-1, which has now been completed and commissioned, when combined with PF-2 later in the year, will allow the Company to achieve its immediate short-term production target of 40,000 bopd.

Commenting on today's announcement, John Gerstenlauer, Chief Operating Officer, said:

"It is a recognised fact that Gulf Keystone has done outstanding work during the exploration phase and we continue targeting significant exploration upside of the Shaikan field with Shaikan-7, which is currently being drilled.

Our next immediate target is to complete the Company's transition from an exploration to a key producer in the Kurdistan Region in 2013. The spudding of Shaikan-10 is yet another step in the right direction.

The implementation of our Field Development Plan has started and we will shortly commence production from one of the world's largest onshore conventional oil & gas developments. Focusing on our production milestones agreed with the Ministry of Natural Resources, we are working hard to get to 40,000 bopd of Shaikan production from PF-1 and PF-2, and then to progress to 150,000 bopd within 3 years and 250,000 bopd within 5 years."

Watch John Gerstenlauer's introduction to the Shaikan Field Development Plan at:

Gulf Keystone-Moving to development

Enquiries:

A post from a rig worker.


RNS states that PF1 is commissionED - That means it works and handed over to operations. The fault finding is done and ready to go.

Not sure exactly the facility details but is it a case of waiting for oil through the system / truck filling / storage?

Good news
------------------------------------------------------

We are a little nearer to production at ,ong last.

http://www.investegate.co.uk/gulf-keystone-petrol--gkp-/rns/notice-of-additional-agm-resolution/201307101000010028J/

noc not very informative M&G looking to appoint 4 directors, trouble brewing?

when a largish investor like M&G proposes a resolution to appoint four new directors there has to be good reason.

Agreed and TK's package(which does appear excessive) is one of the issues,it seems the
terms were set prior to the sucess of Shaiken(13billion OIP).As to the suitability of the candiates,it's over my head.
----------------------------------------------------------------
An interesting post,



Blog from Malcolm Graham-Wood


Gulf Keystone Petroleum

The news just keeps on coming for GKP and I still haven’t caught up with the news when I was away. Today sees the spudding of the Shaikan-10 Development well which I visited last month. The site has been extensively cleared and even a road built to facilitate access in the mountainous region that it occupies, giving space for a three/four rig, multi development and production programme.

The oil from here will go to the PF-2 production facility when it is complete, along with oil from Shaikan-2 and -5 which will be tied in to the facility. A word about the production facilities, PF-1 is ready and up and running, now with field development approval it should be able to produce its target of 20,000 b/d maybe more, before long, as for PF-2, I saw that too, and construction is well under way and its capacity is similar to the first one.


The next month or so is going to be pretty crucial for GKP, the AGM on the 25th of July may be lively with a slate of directors possibly changing the make-up of the board, proposed by M&G and supported by Capital. On the 23rd of August we should hear the result of the Excalibur court case which has held back the share price for some time now, interestingly although the shares have had a good run lately and there will be manic days to come, there is potential for much more upside should things go ok for the company.

you should be much more worried if the likes of M&G were jumping ship

RNS Number : 0384J

Gulf Keystone Petroleum Ltd.

10 July 2013

Not for release, publication or distribution in or into the United States or jurisdictions other than the United Kingdom and Bermuda where to do so would constitute a contravention of the relevant laws of such jurisdiction.

10 July 2013

Gulf Keystone Petroleum Ltd. (AIM: GKP)

("Gulf Keystone" or "the Company")

Meeting with M&G and update on timing of the Board's recommendation

Gulf Keystone is pleased to announce that senior representatives of the M&G Recovery Fund ("M&G") have agreed to meet with members of the Company's Nominations Committee, on the afternoon of Friday 12 July 2013, to discuss the four candidates proposed by M&G as directors (the "Proposed Directors"). Simon Murray, the Company's Independent Non-Executive Chairman, will lead the meeting on behalf of Gulf Keystone.

In light of this welcome development, the board of Gulf Keystone (the "Board") has, in the best interests of the Company's shareholders ("Shareholders"), decided to delay publication of its RNS and circular, recommending to Shareholders what action to take with regard to the Proposed Directors, pending the outcome of the meeting with M&G.

The Company will update Shareholders following the meeting with M&G, and by no later than close of business on Monday 15 July 2013, which will still give sufficient time for all Shareholders to review the Board's recommendation and vote accordingly.

In the meantime, the Board continues to strongly urge all Shareholders not to vote, or fill in their Forms of Proxy, until they have reviewed the Board's recommendation on the Proposed Directors.

Enquiries:

cynic to dump or not to dump that is the question?

personally not ....... i think the odds are in favour of GKP winning their court action, and once that is out of the way, then there could be a lot of fun and games .... unless TK is the alter ego of Frank Timmis, then certainly the company looks to be sitting on an awful lot of oil

cynic don't remind us of frank bad vibes, M&G are obviously not happy with the way the company is being run, perhaps they are afraid the court case may be "lost". Todz share sale seems to have set off a few alarm bells.

if M&G were that alarmed, they would have sold, but they are right that TK needs to be kept under control, especially when it comes to self-benefit

cynic they should know about his record in Algeria which was somewhat less than brilliant.

nevertheless, unless you think this shaikan field story is a complete fabrication and web of lies ......