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.

ulf Keystone Petroleum (GKP) Trades
59.13
+23.63 (+66.56%)
live: 11:52AM GMT
Buy Volume 20,199,961 Trade Low 40.85
Sell Volume 15,850,196 Trade High 61.36
? Volume 2,090,698 VWAP 52
Total Volume 38,140,855 Prev day Vol 0
Status: Connected
(Pause Streaming)
Time Price Qty Type Bid Offer B/S Total Buy Total Sell
11:52:44 59.23 2,002 O 58.75 59.50 Buy 20,209,997 15,864,273
11:52:37 59.06 2,609 O 58.75 59.50 Sell

http://www.moneyam.com/action/news/showArticle?id=4983371



25 February2015

Gulf Keystone Petroleum Ltd. (LSE: GKP)
("Gulf Keystone" or "the Company")
Strategic Update

Further to the Company's RNS of 6 February 2015, Gulf Keystone, the operator of the world class Shaikan field in the Kurdistan Region of Iraq, is announcing today that it has recently engaged in discussions with a number of parties in relation to possible asset transactions or a sale of the Company.

/strong>

That means raising capital by part sale......good....nothing wrong with that.....it would be crazy to sell this company now they are being paid...but in the middle east ; nothing is that simple...

Might just be a case of running out of cash due to non-payment by KRG and having to sell some assets to meet the debt repayment deadlines.

Print
Alert
TIDMGKP

RNS Number : 9069F

Gulf Keystone Petroleum Ltd.

26 February 2015

Not for release, publication or distribution, directly or indirectly, in whole or in part in or into the United States or any jurisdiction other than the United Kingdom and Bermuda where to do so would constitute a contravention of the relevant laws or regulations of such jurisdiction. This announcement (and the information contained herein) does not contain or constitute an offer to sell or the solicitation of an offer to purchase, nor shall there be any sale of securities in any jurisdiction where such offer, solicitation or sale would constitute a contravention of the relevant laws or regulations of such jurisdiction.

26 February 2015

Gulf Keystone Petroleum Ltd. (LSE: GKP)

("Gulf Keystone" or "the Company")

Payment Confirmation

Further to the Company's RNS of 25 February 2015, Gulf Keystone confirms receipt into its bank account of a further US$26 million gross payment (US$20.8 million net to Gulf Keystone) constituting a pre-payment from a third party buyer for future Shaikan crude oil sales.

Enquiries:

Which is payment on a pro-forma invoice, presumably meaning that GKP don't trust their customer enough to pay the invoice after receiving the oil.

From yesterdays RNS.

As at today's date, the Company's cash balance is US$69.3 million and it has been informed that a further US$26 million gross payment (US$20.8 million net to Gulf Keystone) for Shaikan crude oil sales has been received by the Company's bank and is expected to be credited to the Company's account shortly.

At present they have cut back to the bone opex,with a ops update due Q1,along with SH11(producer)result expected.This should increase the potential to produce well in excess of 50kbopd,can't be bad when discussing any sale,along with this mega field?
Which is one of four,AB,BB,SA and the of course SH.

Seems to me that the SP is being held back,thats my impression when looking at the
run of sells(shorts?)?Any offer would come at a premium to the SP,which could mean that an offer will come near future??
aimho

Seems to me that the SP is being held back,thats my impression when looking at the
run of sells(shorts?)?Any offer would come at a premium to the SP,which could mean that an offer will come near future??
aimho

Goldman Sachs note from yesterday:
"We downgrade Gulf Keystone from Neutral to Sell with an updated 12 month target price of 36p (from 65p) implying 1% downside. We lower our valuation and estimates to reflect the announcement by the company that it is to temporarily suspend export production and focus on supplying the local market in order to maintain revenues and cash flow, given the limited visibility on export payment timing. We reduce our production assumption for 2015E by 25% to an average of 28.5kbopd from 38kbopd. We continue to believe Gulf Keystone’s liquidity position will be tight in 2015, particularly given our revised levels of production with debt repayments due in April and October 2015. We lower our capex budget for 2015E as we expect minimal spend on other assets; we remove value for exploration upside at Shaikan and delay the pace of ramp-up on its other assets. We see better opportunities elsewhere on a sector relative basis and downgrade the stock to Sell.

As with other operators in Kurdistan a key focus is visibility on the timing of export payments. We view updates here as a key catalyst for the stock given GKP’s tight funding position on our estimates. Despite the switch to local sales in the interim to maintain a level of cash flow, albeit at lower realizations, we continue to believe Gulf Keystone’s funding position is most at risk of the Kurdistan players.

Our 12-month SOTP-based target price of 36p (from 65p) assumes a long-run oil price assumption of US$70/bl. For those assets we deem to be strategic (Shaikan) we assume a 50% weighting for M&A. We also apply a 20% funding discount to our NAV to reflect the company’s tight funding position on our estimates."

Hmm?

GKP are owed over $300m + nearing $100m in cash at present,shortly to be allowed sales to the locals.Maybe a sale of an asset(AB?),perhaps $100/200m and able to produce 40kbopd,with the lokeluhood of increasing to 50kbopd. At 36p the M/Cap would be roughly £320m.
So whats the value of the assets,hmm?The followung is a c/ped of JG's latest reference
to SH's OIP.
--------------------------------------------------------------

LSE--We need to know IMO.

John Gersrenlauer said on 13 March 2014 that the dy/dx is 4 billion barrels of Reserves and Resources per 1% of Shaikan Fracture Porosity.

So if it's 1%, 4 billion barrels recoverable in the fractures alone (and the consulted experts and academic sources say that 1% is too low for a highly-fractured carbonate reservoir with open fractures);

If it's 2%, 8 billion barrels recoverable in the fractures alone (and the eminent consultant with whom I spoke last month said "if you have no data, that's what you use, 2%, that's what you use")

If it's 3%, 12 billion barrels recoverable in the fractures alone (and "joseki" reported that Gulf gave that very figure at the analyst meeting on 28 May 2012; he was then banned and the post deleted, but not before it had been saved. The Great Swarmi then said that 3%+ would fit an "intense and pervasive" fracture system, you can easily find his comments thanks to Dalesmann and his website with its extensive archived material).

We want the finest reservoir studies known to humanity, we want them here, and we want them now!

Well, fairly soon anyway.

-----------------------------------------------------------------------------------

So at 1% 4bbo(as much as the majors achieved in the last year (at what cost?).

For every billion barrels of oil, a value of just $0.3/barrel and these figures are for SH alone,AB,BB and SA not in the equation.

ps.
for the 12bbo mentioned((3%)a value of $0.0025/barrel

DAylight robbery i say.
BTWDIK?

Adding to the above,JG commented regarding one of the wells.a porosity of which
in over 35 years,he'd never experienced?

Interesting post?
-------From LSE....

The company is talking to multiple parties, and looks like a closed auction with blessing of KRG (see payment as show of support). KRG wouldn't want their crown jewel to be sold cheaply, nor do the expensive advisor DB and PW. Some confidence that if it happen the price won't be too low, otherwise as NM said there could be serious repercussion over concealing of JS from shareholders. GLA.
-----------------------------------------------------------------------

i see nothing on (IG) reuters

Shaikan operator Gulf Keystone Petroleum in play
NewsFeb 27, 2015

Gulf Keystone Petroleum rig in Kurdistan
What a week for shareholders in Gulf Keystone Petroleum, which has hoisted the “for sale” sign as it wrestles with the challenges of selling oil in Kurdistan with the necessity of meeting its debt obligations. Shareholders have long speculated about the future of the oil group, which soared in value, migrating from AIM to London’s Main List, after it made a giant oil discovery in the Kurdistan Region of Iraq.

But it has proved easier to find the world-class Shaikan oilfield than to sell its crude as the Kurdistan Regional Government has been locked in dispute with Baghdad over revenue-sharing while payment cycles for crude exports trucked to Turkey have proved erratic.

Earlier this month, Gulf Keystone, which is pumping around 40,000 bpd from the field, was forced to suspend oil exports until a regular payment cycle can be established. It is in dialogue with the Kurdistan Regional Government’s Ministry of Natural Resources to receive the considerable outstanding payments due to the company and in the meantime has restarted supplying its Shaikan oil into the local domestic market in order to generate near-term revenues.

Now, with the company trading significantly below asset value, talks are underway with “a number of parties” about asset sales or complete sale of the company. It has appointed Deutsche Bank and Perella Weinberg Partners as financial advisers as it mulls its options. The Bermuda-registered company isn’t without funds: its cash balance of US$69.3 million was this week boosted by the receipt of US$20.8 million as a pre-payment from a third party buyer for future Shaikan crude oil sales. But the problem is the debt load against a backdrop of low oil prices and erratic payments.

Analysts at SP Angel Corporate Finance were unsurprised that the company was in talks with potential suitors, saying “the only surprise for us is that it has taken this long”. “The Shaikan field alone is world class, and when combined with the others in its portfolio the Company is a regional business in its own right,” said the analysts.

“While the asset’s value is easily north of any double digit per share offer, the price that will be paid will reflect what the acquirer can get away with in the market – successful offers are generally a ~30% premium to the prevailing market price,” said the SP Angel team.

That price was 48.75 pence on Thursday, a fraction of the level shareholders had once hoped for as the company unearthed billions of barrels at Shaikan. This is indeed a world-class field – and Gulf Keystone cannily has material stakes in other major finds in Kurdistan – but the political and security strife has created headwinds that have, ultimately, taken their toll on the company.

From last Wednesday's Proactive article:

Gulf Keystone soars as 'for sale' sign goes up, but how much can investors expect?
By Jamie Ashcroft February 25 2015, 3:37pm

GKP has a very large resource base, but with question marks over liquidity and politics how much can investors expect from a takeover bid?GKP has a very large resource base, but with question marks over liquidity and politics how much can investors expect from a takeover bid?
Gulf Keystone (LON:GKP) shares have soared as the Kurdistan oil firm put up the for sale sign.
The company today revealed it is in talks with potential buyers, though the process was said to be preliminary and no indicative deal terms were revealed.
By late afternoon on Wednesday, Gulf Keystone shares were up 16.75p (47%) at 52.25p.
One way or another Gulf Keystone has been touted as a takeover target ever since it struck oil in Kurdistan back in August 2009.
But, now, as oil execs sit pokerfaced across the negotiating table, valuing the business in the current environment is going to be tricky.
Financial and geopolitical headwinds mean GKP’s bargaining position is not strong.
GKP is facing a potential funding gap. It has in excess of US$300mln of convertible debt which is currently out-of-the-money and visibility over future revenues is poor.
The company is currently sounding out its financing options and it was recently forced to cease exports amid uncertainty over payments from the Kurdish authorities (though a US$25mln payment was reportedly received in recent days).
Then there are the geopolitical concerns such as the various conflicts with Islamic State in the broader region, and the typically combustible relationship between the Kurdish authorities and Baghdad.
On the other hand the group has a very large resource base.
At Shaikan, the group’s most advanced oilfield, there are between 160 and 520 million barrels of potentially recoverable oil (net 2P reserves to net contingent resources), while the latest in-place oil estimates run towards 10bn barrels.
Shaikan is currently able to produce about 40,000 barrels of oil per day and a field development outlines further expansion up to at least 100,000 bopd.
There are operational challenges too, however, as large portions of Shaikan’s ‘in place’ oil is heavy and waxy; and as such it will require more expensive production and processing in the longer-term.
Jamal Orazbayeva, analyst at Westhouse Securities, believes most investors have now come to understand the reality of the GKP proposition after many years of optimism and ‘blue sky’ thinking.
She cautions that if no offer materialises, the company will be left with its debt renegotiations and limited growth in the near term and thus, investors may consider this as an opportunity to either exit or reduce exposure.
The analyst has previously flagged concerns over GKP’s balance sheet risks, and she says the company does not have the financial flexibility in the near term to accelerate Shaikan’s development.
As such the analyst reckons the start of sales discussions may be partially dictated by Gulf Keystone’s liquidity position and the asset’s need for additional capital.
“Shaikan probably needs an operator that has deeper pockets and much more funding flexibility than Gulf Keystone currently does,” she told Proactive Investors.
“So, if a deal does go through, it is good for the asset as the development can finally be accelerated, and the only issue to address will be heavy oil exports – either by a blending facility or a separate heavy oil pipeline. But this will be determined by the Kurdistan Government.”
Orazbayeva has - prior to today’s announcement – ascribed a value (risked net asset value) of 56p per share for Gulf Keystone.
Cantor Fitzgerald analyst Sam Wahab, meanwhile, has a much higher price target - 148p per share - and he still thinks at current levels Gulf Keystone shares are “hugely undervalued”.
That said, Wahab sees Wednesday’s share price rally as simple speculation.
“There is a huge amount of retail investor interest in this stock, and they are all merely speculating on what they think the price could be, there seems to be some resistance at 60p, but I could see this going further,” he said.
Speaking with Proactive Investors Wahab said he thought the sale talks may have been sparked by unsolicited interest, as potential buyers identified the company’s current vulnerability.
“It [a sale of the company] is something that has been on the horizon for some time.
“It has become, on a cash level, very difficult for them [GKP’s management] to progress their assets, any of them, whether it be Shaikan or the peripheral assets.
“At this stage it is probably best to capture shareholder value now, and let a larger company with a technical and financial resource base to progress the assets to the level that they should be.”
As Wednesday’s trading draws to a close and investors digest the possibility of Gulf Keystone finally being sold, ultimately they will have to ask themselves not how much they want for the sale, but, how much they will accept.

Should You Sell Into The Spike At Gulf Keystone Petroleum Limited (Before It Dives)?




By Dave Sullivan - Friday, 27 February, 2015
GKP
Shareholders in Gulf Keystone Petroleum (LSE: GKP) awoke on Wednesday to a nice surprise. The announcement, copied below, sent the share price soaring — at 55 pence, it closed 55% higher than the previous day’s close.

Why the sudden pop?

This was the opening line: “Further to the Company’s RNS of 6 February 2015, Gulf Keystone, the operator of the world class Shaikan field in the Kurdistan Region of Iraq, is announcing today that it has recently engaged in discussions with a number of parties in relation to possible asset transactions or a sale of the Company.”

I think that it fair to say that the opening line of this release is what has caused the surge in price. However, in order to get a fuller picture, you have to read on…

“Stakeholders are advised that these discussions are preliminary and, as such, there can be no certainty that any offers will be received and any transaction concluded, or any certainty as to the terms on which any offer might be made. Further announcements will be made by the Company as and when appropriate.”

So, as is usually the case, shareholders are warned that this is early days and there is no certainty that a deal will be done. Whilst this is standard stock market speak, investors should tread with caution — the interested parties may not like what they see, while they may also be looking for a larger-than-normal margin of safety, given the risks that come with doing business in this part of the world (look at what happened with Seplat and Afren).

Saving the best until last

So, everything seems to be heading in the right direction… then I read this:

“As at today’s date, the Company’s cash balance is US$69.3 million and it has been informed that a further US$26 million gross payment (US$20.8 million net to Gulf Keystone) for Shaikan crude oil sales has been received by the Company’s bank and is expected to be credited to the Company’s account shortly.

“Concurrently, and in view of strategic discussions and its current liquidity position, and with the intention of meeting its existing debt payment obligations, the Company is undertaking a review of its financing options and in that context will engage in discussions with its key stakeholders.”

These last five lines fill me with dread. Let me explain. This tells me that the company is burning cash faster than it is making it. At some point, it will run into trouble with its bondholders. Again, I would point you in the direction of the current situation playing out with Afren.

It is true that things could be different here — after all, this is a ‘world class’ oil field and I’m sure that there is a company out there with deep pockets and political sway wishing to add the assets to its portfolio. The question for me is: at what price?

Where do we go from here?

For me, there is too much uncertainty to make me want to take the plunge, despite the promised payment landing in the bank today. I think unwary investors could get their fingers burnt here, should a bidder walk away.

? Who is David Sullivan ?

https://uk.linkedin.com/pub/david-sullivan/22/854/7a2

Of course it raises the question of who would walk away from such a huge asset?

More of how much,30% to 1000%+, will be the agreed price,or just how much profit to be made?
Its the market,nothings certain,only time will tell for sure.

http://www.reuters.com/article/2015/03/01/iraq-oil-kurds-idUSL5N0W30OE20150301