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.

Well I don't agree......all that is is a shorter....can't say I'm impressed with any of the so-called tipsters.....this company and it's major discovery is way undervalued...yes they have to raise funds.....isn't it funny that these "I told you so's" appear after the event (the drop), or they tip so many = you do not know which one to choose....they take an average.........always the same story...and then later ; oh ! look such and such a share has done this and that; told you so forgetting that they tipped about forty others as well...all in the gloom......Anyway : this one is for the long term....to keep until next year....capital raised will bring stability.....can't help feeling that these are people that have missed out on the original discovery...or others....pathetic...I'm just hoping that it is a placing with not too much dilution....but even if there was : the sp will rebound like a rubber ball !...

Right thats me out, I'll keep it on watch for now.

http://announce.ft.com/Detail/?DocKey=1323-11898273-1R4PD668JF249Q7MVGCUI8CDJA

How this is allowed to happen is beyond me. The RNS could hardly have been read before they dropped the price. Criminal.

http://www.investegate.co.uk/gulf-keystone-petrol--gkp-/rns/publication-of-prospectus/201403201540068295C/


Probably dropped on news,looking for those stops?

here's the low (very low) down ......

Says group does not have sufficient working capital for present requirements, for at least 12 months from the date of the prospectus
Says depends on existing cash, of US$82 million at 31 January, with production revenues from its interest in the Shaikan Block
Says existing cash resources may be enhanced over next 12 months
Says if none of these events occur, would expect the company to require additional working capital by the end of May 2014
Says would be expected to have a shortfall of approximately $20 million by the end of May 2014
Says Lord Guthrie has stepped down as deputy chairman, to be replaced by Jeremy Asher with immediate effect
Says shortfall would increase through the working capital period by $10 million-$15 million per month on average until Jan. 31 2015


how on earth can the company then move from AIM to the main market with such a cartload of manure in tow?

I can't see what the problem is ?....every company needs working capital...with a massive oil discovery under their belts they will be able to raise I reckon 200 million dollars comfortably.....it will dilute of course the shareholder base but it will bring stability going forward.....and production will increase as we go along....patience...

tlars on iii

--------

Statement by Prime Minister Nechirvan Barzani: Oil export initiative by the Kurdistan Regional Government
THU, 20 MAR 2014 18:22 | KRG.org

The negotiations with Baghdad on oil export and budgetary matters are ongoing. These negotiations have not yet resulted in any acceptable agreements.

As a goodwill gesture the Kurdistan Regional Government (KRG) has offered to make a contribution to Iraq oil pipeline exports to give the negotiations the maximum chance of success.

The KRG contribution to oil export will be one hundred thousand (100,000) barrels per day effective from 1st April 2014, and will continue while the negotiations are proceeding in a positive direction.

The KRG has not set any preconditions for this initiative. In the coming weeks, the KRG will seek a full settlement with Baghdad on the way in which the KRG’s oil exports and oil sales revenues are managed and controlled.

The KRG shall at all times preserve its rights as defined in the permanent Constitution of Iraq.

From a oilman,
---------------------------------------------------------
,

1/ Look at Rig 842s recent photo ie we are testing (thats if recently took).

2/ Look at the bottom left hand corner at the tubulars , I'm unable to see them clearly but a small size , they are either a temporary test string or 3 1/2 drill pipe . So if the first they are very near to if not testing !, or the liner is about to be ran and that drill pipe is to run through the liner to drill the rat hole ie final section of the well to be drilled .

3/ The Central piece of equipment is Coiled Tubing ( google what you do with this !), the Vessels nearby are surface Gel Tanks .

4/ So this equipment is costly and can be lengthy to procure , rig up , test and run .


Remember these wells are fire and forget wells ie vertical so even though you can drill via them with a turbine and swivel BGA that they would not be used for that purpose .

This just about sums it up imo.


From Hub on iii:-

I'm still in a daze - and cannot believe the Bod's have left GKP shareholders literally in the lap of the gods.

Speechless. Just about everything I feared has come true.

Shareholders are now left with a ticking time bomb to contend with.

Here's what can diffuse it.

1. Sort $250mln in bonds/debt. In the prospectus they have given a deadline of 'by the end of April'. This is mostly likely due to MAY being the month where they have not cash left.

2. By memory - it didn't take very long to sort the CB's but then these were pre-planned and run by MC and not DB.

3. If they can't sort bonds, then they are taking about equity related finance such as share placings, sera's etc etc. If it comes to that, it's going to be very ugly and dilutive.

4. Asset sales. They keep mentioning AB sale like it's still an option. The cpr booked pretty low numbers andMOL are still working on several wells. Who knows?

Quite how they can achieve a listing on March 25th is anyones guess. Surely inadequate finance means the siting cannot go ahead. However, it seems to suggest that they will move on 25th to standard listing and then update on finance near end of April or earlier.

Now - imho if GKP bod's and DB think the bonds are a goer, then surely they would have tested the water before putting themselves in this tight spot. They postponed the standard listing last year and could have easily moved the listing to June or July and sorted funding before that date.

Logic just goes out of the window which makes me concerned that they (or some directors) may be seeking a mates rates equity raise. This would be tantamount to a manipulation of the share imho as the only reason an equity raise is potentially on the table is because GKP bod's put shareholders and the company into that tight spot. It was voluntary! No says you have to move off AIM. You can postpone the move! As GKP have already done in 2013.

If the bonds get sorted - then a major cloud is removed and the going concern issues disappear for around 10 to 11 months.

Now if you wanted to sp to bounce back and to get the company back on track - then you'd announce bond deal sorted before or on march 25th wouldn't you?

If we enter April with no bond deal in sight - then you can imagine the nerves and sp gyrations.

If that is what 'they' are after - then it's very crooked.

The entire way this process has been handled has been to scare pi's in my opinion.

I wrote a post a while ago about shareholders 'A" and shareholders 'b'.

Shareholder 'B" is being thrown to the wolves while Shareholder 'A' gets the nice low entry point.

Gokana are an example of a 'shareholder A' and pi's are shareholder category b.

I wonder whether Mehmet at genel flogged his 2.3mln shares (£23mln+) with the view to investing in another Kurd player that might be cheap? He does like a good trade - apparently.

A bond deal Rns tomorrow would do wonders to sooth some nerves.

If we enter April with no news, then it's going to test some nerves.

All the best to the real genuine investors.

Those that supported TK and accused those that were trying to help 'as bashers' etc should apologise at the very least.

HUB

The United States welcomes the decision by the Kurdistan Regional Government (KRG) to begin oil exports of 100,000 barrels-per-day on April 1 through the Iraqi-Turkey pipeline pursuant to existing export arrangements with the Government of Iraq (GOI). We further welcome the commitment from the KRG to ensure that these exports continue in parallel to ongoing talks towards a framework agreement on the management of the hydrocarbon sector.

The United States urges the joint GOI-KRG committee, comprising experts from the GOI’s Ministry of Oil and the KRG’s Ministry of Natural Resources, to meet and assess future month-to-month export targets based on technical capacities and in a manner consistent with the Iraqi Constitution.

Regarding the ongoing discussions towards a general framework agreement, the United States notes the progress that has been made in recent months including general principles that would allow for all Iraqis to benefit fairly and equitably from anticipated increases in oil production and export. We will continue to serve as a neutral broker and facilitator to the extent desired by the leadership of both the GOI and the KRG, consistent with our long-term partnership with Iraq as outlined by the Strategic Framework Agreement

By Tom Winnifrith — Friday 21 March 2014

This is not a question that the legions of Gulf Keystone (GKP) shareholders want to consider but they should now accept that this is a possibility – however remote. How they must wish they had followed grossly overpaid CEO Tod Kozel in dumping all their stock last year.

The position of Gulf is not now about fundamentals but about game theory. There are a number of parties involved – let me elaborate.

1. The company. If it does not raise $250 million PDQ via a bond issue it has a problem. As things stand it will go tits up by May such is its cashburn


2. The shareholders. These are a disparate bunch, largely legions of private investors. I am afraid they have a weak hand, indeed no hand in this poker game.


3. The $325 million bond holders. If Gulf runs out of cash they are its largest creditor. For what it is worth, as things stand, they effectively own the company. They must now be bitterly regretting having lent Gulf so much money for a paltry c8.5%. They must be worried that this company goes tits up and will do anything they can to stop that.


4. A potential bidder. I have never believed that a potential bidder would swoop but I will humour the Bulletin Board morons and pretend that, say, Genel is interested.



At this stage the conversation – as I outlined yesterday – is between The Company and its Bond Holders. No new (sane) bond investor is going to want to back Gulf whatever Coupon it offers. So Gulf is telling its existing bond holders “double up or you lose the lot.” My guess is that this is what will happen but the coupon Gulf pays will not be pretty. And that, I suggest, will not be very good for sentiment or the share price.

But there is another possible outcome. Let’s assume that Genel is interested. It need only approach the bond-holders and say “here is your get out of jail card” – do not back this issue, wait for Gulf to breach a covenant and we will buy your binds off you at par. We can then call in the bonds and get the company’s assets for just $325 million without having to pay equity investors a cent.

This is game theory and no-one knows if any bidder would try this on or indeed if there is anyone interested in Gulf’s assets.

My point is that the only players in this game with no cards to play are equity investors and my guess is that either way they will get screwed. The only question is how much they are screwed and it could, under one scenario, be absolute.

EK diary today...

"I have traded Gulf Keystone (GKP) twice on the bull tack in recent days but only for an hour or two on each occasion - and at a profit as it happens since it proved that the market had overreacted to finance raising proposals and declarations. However, the essential truth is that this company could finance itself much more modestly by getting one well going and using the profits from that to finance the second. Given that there is the gathering suspicion that even that policy might in practice yield a negative cashflow one can quite understand that the management have elected to go for broke and raise $100m+ and get it all over and done with. But, on this scenario, the end result remains that Gulf can reasonably be seen as a forthcoming total bust."

Posted the doomsday articles as i believe one should be made aware,however i feel
MOL would snap up Akri Bijeel for $150m+(half of it;s value) which would more than cover GKP. Although looking for$250m,$101m will see them through until end of Jan 2015.

To back uo my thoughts on ABm c/ped this.


Akri Bijeel


Bijell-2 drilling

-- already flowed oil in the Jurassic, Jurassic Bijell‐2 DST2 3,764 – 3,903mMDRKB 3,186 – 3,325mTVDSS flowed up to 1,900 stb/d oil with no water.

Now very close to TD

'-- Bijell-2 well was spud on 13 March 2013, currently drilling the upper Jurassic section. Planned TD is 5330m, will be tested in Q1 2014.'

13/03/14
'Bijell-2, a deep appraisal well targeting the Triassic horizons of the Bijell discovery, is currently drilling 12 1/4 " hole below 4,750 metres in the Kurre Chine Anhydrite formation.'

----------------------------
Mol are to release new figures in April.

If you start talking poker ; GKP hold an ace with the biggest (or just about with a massive oil discovery)...that is a fact...now they need to raise funds for production ....nothing wrong with that...I can't see the problem....it might come in stages that a bank or institution will lend to them upon delivery...stage 1...stage 2...etc....could be that a major oil company steps in with a proposition.....just guesswork......but should funding come and it should...and I would like to think that whoever steps in is not going to regret it and will consider themselves lucky in the long run with such massive oil puddles in Kurdistan just waiting to be extracted....(Iraq is a lot less in the news nowadays...much better).....to me more upside than downside...just the size of the dilution to worry about...but that is required so that this company can prosper....I hope the management gets the banks, institutions,oil companies to compete for this extraordinary discovery that is Shaikan !...

Another question I raises why (as TW points out) would nobody want to lend them capital......?....this (Shaikan) is the largest oil discovery on land (that is) for years.....to me this is way undervalued.as long as capital is forthcoming....and it should be...if I was a bank I would be ringing them now...!....

Are you not a banker rf?

Wish I was Balerboy......the market does not like uncertainty......the quicker this fund raising exercise is realised the better....if and when : I would think that the sp would go up by at least 20p or sp regardless of the dilution.....we just have to hope that it is not a massive dilution.....they do have this new well of theirs as back up....that should help...

iii-cheers

Re: Net Asset Value
investor48 3UP
Hi Jacksalad,

Looking at your calculations:

1.If you use 1billion shares as the total number of shares,then you cannot subtract the debt attributable to the CB's.The CB holders cannot redeem and convert at the same time.

2.Clearly as per the CPR,Shaikan's 2C resouce attributable to GKP is circa 380million barrels.Afren paid circa USD400million for Barda Rash 2C and 3C resource based mainly on one well drilled in 2010. The CPR,however, did not place a value to the 2C because GKP has not finalised the investment required to take GKP's production to 90K barrels per day.The CPR values the 2P at USD6.16 per barrel using a NPV of 10percent.Arbitrarily,I have used a conservative value of USD5 per barrel,a 20percent discount from the USD6.16 per barrel.This will value the 2C resource moving to 2P at circa USD1.90Billion.

3.Hence for Shaikan only,the net asset value to GKP,USD1billion(as per the CPR 2P resource)+USD1.90Billion-USD325million(CB)-USD250million(straight bonds)=USD2.325Billion.Converting this to Sterling/1.66 = 1.4Billion pounds.

4.Total number of shares I am using 910million shares as I have assumed the CB's are redeemed and hence cannot be converted.

5.A very rough net asset value per share is 1.4Billion pounds /910million shares =154p


No value has been given to the 2C resource estimates for SA.As for AB,the CPR gives peanuts 2C to Bijeel and Bakrman at 43million barrels,This 2C value has made MOL furious as it has messed MOL up big time in valueing AB.MOL has publicly said that Kurdistan is a game changer for the company!MOL plans to come out with their own 2P and 2C resource soon.

Most analysis have given a value from 100p to 183p based on the CPR,at this stage of GKP's development.The 100p value was given by Canacord that gave a value of more than 200p for TRP,that has yet to make an oil discovery!!It just shows the credibility of this analyst and I really wonder how he made his bullish assumptions to arrive at more than 200p for TRP!!!

Lots of upside for 2P and 2C resource in Shaikan as it increases it's production to 150K,250K ,etc,etc over time.SA-3 results are important as it could show possible connectivity,meaning a greater Shaikan.

SH-7 will test the Permain anytime soon and this could be a new discovery!!Sometimes I wonder if March 2014 reminds us of May-June 2009 before the SH-1 transformational news.Since no new shares can be issued,the only other way is to endeavour to get some cheap shares from PI's is by creating a fearful investing atmosphere!!At this stage,it is ironic that fear is everywhere that stamped from the CPR and Prospectus that was mandatory for GKP to move to the main board.

Best wishes to all and Good night