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.

Borrowed from iii ,,CREDIT to BBBS for his research
Very long BUT very interesting:

First things first. Pittsburghguy / Petersburghguy / Essex-boy Peter / Lord Trustnot - what can I say concerning your 'Response to BBBS' (post at 14:52 on 10th Sept). Well, um, er, Pitts - hope it's ok if I call you this from now on - I think you are a gentleman and a scholar. A gentleman for your gracious rebuttal of my bait, and your highly professional posting style. A scholar for your pragmatic take on ETAMIC, and your ability to get away with such a postive Shaikan estimate based on ..?!! A review of all posts on this BB from the past two months shows that you are head-and-shoulders above the rest of us in terms of concise, reasoned, professionally presented argument. We all know who is at the other end of this spectrum! I hope that I come across closer to you than him, but fully recognise some of my faults - overly cynical, a sense of humour that may appear warped to many - and in my defence, can only say that these are both probably only due to my long exposure in the school of hard knocks (life). I will try to perform better by sticking to things I'm more sure about (the technicals, below). But before that, I have to say that my favourite part of your post was "My basis for a 4 BBL estimate for Shaikan 1, is that I lowered it from my initial input of 5 BBL". You are a scallywag sir!! As in playfully mischievous - not as in carpetbagger. I hope you had a nice reunion with RK (Todd's brother Rob, mentioned in your 'Friendly Response' at 15:54 on 2nd August), bet you didn't even have a headache with your hangover the next morning! There you go again BBBS, stop it will you. Pitts, your professional postings lead me and a few others to suspect that you are a company insider. And I'm sure you could get a well paid job with them in this area - but, maybe not, any job position in GKP is likely to be rather short (why don't you have a shot MS?!). I accept your explanations that you are not a company insider - but remain with an inkling that you are priveleged to some pretty solid inside information. Please stay in touch (and keep us updated) with whoever gave you your initial input of 5 BBL!. Not fishing - no further response needed - just wink, wink, nod, nod, say no more ... And so, to business:

A. METHODS:
------------

A1. Spot the Difference:
-----------------------
between p.24 in the February Investor Presentation and p.9 in the April Oil Barrel Presentation. Forget the Cretaceous and Late Jurassic reservoirs - for now - since we now know that these have leaked at the Shaikan anticline location, (refer report of dead oil and tar in the RNS of 24th June). I observe the following changes to the target reservoirs between February and March:

- Sehkaniyan (Middle Jurassic, including the Alan and Mus formations) remains at 250m thickness but the prognosed depth is increased from 1050-1330m to 1300-1550m.

- Kurre Chine (Late Triassic) increases from 500m to 800m in thickness, and prognosed depth is also increased from 1750-2250m to 2200-3000m.

- Chia Zaira (Late Permian) appears to have a similar thickness in both presentations but prognosed top depth is increased from 2980m to 3730m.

I fully expect that most of you have spotted these differences. But has no one observed the thing that should have been different but remains the same?? I had hoped that Inspectors Poirot/Danstar/Ginty were going to help out and save me a lot of time - but it seems that this is not to be:

It is physically impossible for the 'Reservoir Barrels in Place' numbers to remain un-changed between the February and April presentations given that prognosed depths and thicknesses have increased. Even if the increased thickness of the Kurre Chine is ignored, an increase in prognosed depth can only result in constant OIP if the tank/container/reservoir has VERTICAL sides. A container shaped like an actual oil barrel would do the job - but just as nature does not provide us with convenient 'lakes' of oil, she also does not provide ready-to-go oil barrel shaped containers (reservoirs). An anticline with vertical sides is a contradiction in terms, the geometrical properties of an anticline are discussed further in A4. But before that, I'm sure there are those who are wondering what actually happened between February and April. There has simply been a revision to the seismic interpretation. The lower-right picture on p.23 of the February presentation shows a vertical seismic section through the Shaikan anticline. These seismic data are acquired and initially processed in TIME. Subsequently, these data are transformed to a DEPTH section which requires multiple assumptions (guesses) concerning the most appropriate Time-Depth conversion methods and parameters. I read of one BB poster who sold out due to GKP's uncertain depth prognoses - that person should should not be investing in ANY O&G Exploration company. Give GKP a break - they have essentially zero near-by data (wells) on which to base their Time-Depth conversion assumptions. I am not at all put-off by their changed seismic interpretation between February and April - or by the differences between these prognoses and the actual drilled formation depths. But I am a little surprised that GKP did not update their OIP values in the April presentation. But then again, maybe not that surprised - what would investors have thought of GKP's credibility if they had more than doubled their total Shaikan OIP estimate within the space of two months before even starting the drill ...


A2. OIP and STOOIP:
-------------------
Oil in Place (OIP) is calculated from a sigma type summation (summation of discrete depth intervals/layers over the total thickness H of each reservoir zone) of the following equation:

OIP = A x H x NTG x PHI x Sh

where A is Area, H is thickness, NTG is Net/Gross ratio (ratio of the Net reservoir-quality rock thickness to the Gross rock thickness H in each reservoir zone), PHI is porosity (fluid-filled pore space as a fraction of rock volume) and Sh the hydrocarbon portion of this porosity (hydrocarbon-filled fraction of the porosity). Sh is also equal to (1 - Sw) where Sw is the water-filled fraction of the porosity. A and H are both determined from the depth-converted seismic interpretation; with reference to p.23 in the February presentation, A may be visualised as the area of a horizontal seismic section through the lower-left picture. And H can be visualised as the total thickness of any depth-converted reservoir layer seen in the lower-right picture. Prior to drilling, NTG, PHI and Sh will be estimated from regional log information (data in nearby wells/fields). Consequently, the changes between the February and April presentations are most likely only due to a revised seismic interpretation (unlikely that there is any basis to change the guestimates for NTG, PHI and Sh). Once the drill bit has probed, all parameters can be determined far more accurately, and the OIP calculation is revised. The seismic interpretation is revised again - using the actual depths and thicknesses of each reservoir zone, together with sonic and density logs that provide more direct estimations for interval velocities and acoustic impedance etc. NTG, PHI and Sh values are revised to be in accordance with log measurements and interpretations from the well (from gamma ray, density, neutron, and sonic logs for porosity evaluation in 'complex lithologies', and resistivity logs for Sw (Sh) determination. The aforementioned logs are the primary ones required for OIP calculations. Other data may add more detail concerning flow chracteristics, permeability and pressure (e.g. core photos, image logs, formation tester pressures & samples etc etc) but none of these have any significant bearing on OIP calculations MS.

Stock Tank Oil Original in Place (STOOIP) is merely the PVT (Pressure / Volume / Temperature) conversion of OIP to 'standard' "Stock Tank" conditions. The OIP at reservoir temperature and pressure conditions is merely transcribed to the volume equivalent at the standard Stock Tank conditions of 60 degrees Fahrenheit and 14.7 psi, (yes, our American friends got here first and elected the Units). The conversion is made by way of the 'formation volume factor' Boi:

STOOIP = OIP / Boi

The Boi value for a 21-22 API oil at 1500 m with a wellhead flowing pressure of 295-380 psi will be close to 1.0 At this stage in the exploration game, for all intents and purposes, OIP and STOOIP may be inter-changed. OIP and STOOIP both refer to IN-PLACE hydrocarbons MS, and have absolutely nothing to do with recoverable oil, or P2 reserves (other than being the starting point for such calculations). As clearly stated by GKP on page 9 of the April presentation "no formation volume factor or recovery factor has been applied. Volumes are reservoir barrels in place". Concerning your "90 day flow test" MS, that would in fact destroy forever the possibility of accurate STOOIP assessment (hello, ORIGINALLY in place).


A3. Reservoirs/Sources/Seals/Oddsnsods:
---------------------------------------
A potential oil or gas discovery has to tick all three boxes for Reservoir, Source and Seal. Then there's the 'Oddsnsods'.

(a) Reservoirs: The potential reservoir rocks (tanks/containers) in Shaikan are Limestone, Oolitic Limestone and Dolomite. Whilst the porosity in these rocks is typically much lower than in sandstone reservoirs, the oil storage capacity and recovery factors are often high for several reasons. Carbonate rocks generally have very low clay content, making them quite brittle and prone to fracturing, especially in a highly stressed anticline setting. Vugs (primarily un-connected voids or holes) commonly associated with Oolitic Limestones can easily become connected in a stressed and fractured environment. Dolomite is formed from Limestone diagenesis (alteration of Limestone at elevated depth, pressure, temperature, exposure to groundwater etc) and is frequently associated with the creation of additional in-situ porosity from that process. I believe that's correct - and is why geologists rave about Dolomite and specifically the Curre Chine potential, (please correct me if wrong GD).

(b) Sources: Good reservoirs alone are not enough - they need to have the potential to be filled by a hydrocarbon source. Source rocks are shale formations; GKP indicate the Sargelu (Jurassic) and Geli Khana (Triassic) as prospective source rocks, (p9 in the April presentation). Furthermore, they predicted a Jurassic source from geochemical analyses of surface seeps, (p22 in the February presentation).

(c) Seals: Good reservoirs and source rocks are useless if there is no seal to trap the hydrocarbon within the reservoir. The presence of good quality reservoirs and an active Jurassic source was known before they started drilling. It was always about the seal - and GKP told us this at the Proactive Investors presentation on 4th June, (am I right or am I right FF and Luciano?). And when they reported 'live oil shows' on 24th June, (RNS), Shaikan was already substantailly de-risked for me. You can't have live oil without some kind of seal; and as we know, the news has only flowed better since then. All experience is good Luciano, and I'm glad that you're back in - there are still several more super-G's in K. for better luck next time, (I saw that you bailed just after my post "Oil discovered - But already 50% depleted" on 3rd August, so thought there was no point to say anything else to try and convince you otherwise at that time). The only definite seals expected by GKP are the Jurassic Butmah (above the Kurre Chine) and the Early Triassic above the Chia Zaira, (p9 in the April presentation). However, as they state, intra-formational seals may also exist, (e.g. anhydrite layers, shale beds, highly cemented and/or highly consolidated Limestones/Calcite beds with essentially zero porosity).

(d) Odds n Sods: Things that can make, break or merely add detail to the characterisation of any discovery. Such as fluid type (oil / condensate / gas / water), fluid properties (API, density, viscosity, H2S, CO2 etc), porosity (primary, secondary, vugular, oolitic, fracture, clay-bound etc), saturation (capillary pressure, capillary-bound-water, cation-exchange-capacity, wettability etc), recovery (fractures, connectivity, pore pressure, fracture pressure, wettability etc). This list is not all-inclusive, some items can be both positive and negative depending on circumstance, e.g. fractures in the reservoir are good news for recovery; fractures extending into the seal above the reservoir are obviously bad news, active oil seeps are good news regarding proof of existence of an active source; but it is also self-evident that some seals are leaking. The recovery of formation samples - both rocks (cores) and fluids (flow tests) - goes a long way to answering many of the OddsnSods uncertainties. A successful flow test is self-evident proof of the reservoir potential.


A4. Anticlines:
--------------
I first came across anticlines on a Geology course at the Schlumberger field engineer training school in 1974 (my background was Engineering and Physic). In the subsequent 35 years, I have never logged or interpreted a single classic anticline. Not because I'm the subtle stratigraphic-trap play type, but because most of the world's major anticlines were drilled up long before most of us were born, (large sedimentary anticline structures offer huge oil and gas potential primarily because multiple source-reservoir-seal type rocks may be trapped together within the same masssive 'over-turned pot'). The foregoing is stated merely to emphasise the once-in-a-lifetime opportunity that is presented in Kurdistan; regrettably as a consequence of generations of hardship endured by the Kurdish people. Hopefully, it is now their time to re-claim what is theirs, and it is also our time as investors in SMALL-oil-caps (a fortunate consequence of the recent political landscape) to share in their improved situation.

And now we finally get to the "Basic Geometry" bit! Deliberate, as it's important to try and understand the context first. The Shaikan anticline covers an area of over 100 sq km, (p.8 in the April presentation). For the sake of simplicity, the anticline may be approximated by a rectangular-based pyramid, with base dimensions of 5000 m x 20000 m, (these approximate dimensions are estimated from the 3D visualisation and transverse section pictures shown on p23 of the February presentation). The vertical height from the rectangular base to the vertex of the pyramid is taken to be 4000m (just below the base of the Chia Zaira on p.9 of the April presentation). I can hear MS screaming now - but bear with me - I am only trying to derive BALLPARK 'geometrical volumetric leverage factors' (GVLF). Now to demonstrate what I mean by that, let's consider the change in the 250m thick Sehkaniyan zone depths between the February (p.24) and April (p.9) presentations. In February the mid-point of this zone was at 1175m whereas in April the midpoint is at 1425m.

The volume of a one metre thick layer at the 1175m midpoint depth is approximately (1175/4000 x 5000) x (1175/4000 x 20000) = 8,628,906 m3.

The volume of a one metre thick layer at the 1425m midpoint depth is approximately (1425/4000 x 5000) x (1425/4000 x 20000)= 12,691,406 m3.

The geometrical leverage factor GVLF is 12,691,406/8,628,906 = 1.47

The P50 OIP for the Sehkaniyan zone from the February presentation should be increased from 968 MMBL to (1.47 x 968) = 1423 MMBL to account for the increased depths shown in the April presentation.

It don't stop here. The actual drilled midpoint depth of the Sehkaniyan zone is not as prognosed in April at 1425m but is around 1588.5m (1467-1710m). Do I need to say more? I do actually, let's review the results thus far and also make some forward volumetric estimations as well:


B. RESULTS
-----------

B1. Qamchuga through Najima (Cretaceous through Late Jurassic)
--------------------------------------------------------------
(a) Reservoir: No point to calculate revised volumes adjusted for GVLF since we know that any hydrocarbons have leaked out of these zones, (tar and dead oil reported in the RNS of 24th June).

(b) Source: Defintely present below, but as above, no point crying over spilt oil.

(c) Seal: Clearly did not exist. Not totally unexpected since the seismic sections show plenty of possible 'chimneys', especially in the upper levels.

(d) Oddsnsods: Sods was the lack of seal. But what of future drilling locations, e.g. in Sheik Adi? Sounds very positive from GKP - they have stated that target reservoirs in Sheik Adi include the Cretaceous. They do have the ex-DNO modern seismic data over Sheik Adi, and I'm sure they've already integrated that with the Shaikan seismic. The Sheik Adi anticline may well be deeper and less susceptible to leakage at the Cretaceous levels, (also note that both Taq Taq and Tawke have oil at the Cretaceous level). One thing's for sure - if they do find sealed oil at the Cretaceous level it will be far sweeter (higher API) than Shaikan thus far, (it is always the lighter-end that leaks out first).


B2: Sehkaniyan (Middle Jurassic)
--------------------------------
(a) Reservoir: Firstly, the reservoir rocks in this area are in the Alun, Mus and Adaiyah formations (the Sehkanayian). In the RNS of 6th August, GKP reported a surprise discovery in the Sargelu formation from 1450-1510m. The Sargelu is NOT a reservoir in the conventional sense - it consists of black limestone and shale, and as they prognosed, is anticipated to be a source rock. I remain unconvinced that there is truly a Saregelu reservoir - more likely that the structural hiatus at the apex of the anticline has inter-mixed the Sehkaniyan with the Sargelu. Source rocks can be reservoirs in the "unconventional" sense - as in most of HAWK's assets in the US where they are really having to scrape the bottom of the barrel by searching for hydrocarbons in shale source rocks. The opposite end of the spectrum to real reservoir storage within an anticline structure. Anyway, it would seem that GKP may also be coming to this opinion as the RNS of 25th August indicated a single reservoir within the Sargelu, Alan and Mus formations, and then in the latest RNS of 18th Sept referenced "the previously announced oil discoveries in the Shaikan-1 well between 1467m to 1710m MD." I never saw a previous announcement from 1467m - it was from 1450m. Not a big deal, it merely impacts whether this reservoir is 260m thick with a midpoint at 1580m or 243m thick with a midpoint at 1588.5m. I will go with their latest statement for calculation of the GVLF. The midpoint for the Sehkaniyan in the February presentation was at 1175m. GVLF = 1588.5 x 1588.5 / 1175 x 1175 = 1.83

The P50 OIP for the Sehkaniyan zone from the February presentation should be increased from 968 MMBL to (1.83 x 968) = 1771 MMBL to account for the actual drilled depth. Remember, the GVLF calculation is just a ballpark adjustment to account for the volumetric deepening effect. It is clearly conservative in this case since GKP report 1.5 - 3.0 BBL, (but they do of course have a lot more actual measured data than me to make the OIP calculation). I am confident at this stage to continue with the GVLF approach for the underlying reservoirs, in the knowledge that I am most likely being conservative.

(b) Source: no problems, most likely the Sargelu (Jurassic source).

(c) Seal: Clearly the Sargelu is also a seal, possibly also assisted by anhydrites within the Gotina/Najma above.

(d) Oddsnsods: No major issues though if you listen to MS and his mates/aliases (marmite? cellmate?) then we have 'heavy oil' that contains 10% H2S, 20% CO2 that will not flow in pipes and if it did then where could it be stored. Well MS, firstly the well has spoken concerning your 'heavy oil' flow issues - "Preliminary test rates indicate 5,000 to 8,000 barrels of 21 to 22 degree API oil per day with wellhead pressures of 380 to 295 pounds per square inch" (6th August RNS). Secondly, "heavy oil" is classified as less than 18 API. Thirdly, oil with an API between 21 and 22 has a very low GOR (Gas Oil Ratio) - by definition; there is no space to contain your ridiculous gas percentages. Minor traces of these unwanted gases, if present, will be easily handled by standard production facilities.


B3. Kurre Chine (Triassic):
--------------------------
(a) Reservoir: In the February presentation, the Kurre Chine had a thickness of 500m with a midpoint at 2000m. In the April presentation, the Kurre Chine has a thickness of 800m with a midpoint at 2600m. The RNS of 18th Sept indicates that the 9 5/8" casing is to be set at approximately 2500m and that the Triassic rock layers are "beyond the 9-5/8" casing shoe". This means that the top of the Kurre Chine will actually be drilled at around 2500m (another 400m deeper than the prognosed top at 2200m as in the April presentaion). Consequently, the actual drilled midpoint for the 800m thick Kurre Chine formation is now expected around 2900m. GVLF = 2900 x 2900 / 2000 x 2000 = 2.1

Furthermore, the increased thickness from 500m to 800m since the February OIP calculation gives an ADDITIONAL volumetric upgrade factor of 800/500 = 1.6

The P50 OIP for the Kurre Chine zone from the February presentation should be increased from 488 MMBL to (2.1 x 1.6 x 488) = 1640 MMBL to account for the expected actual drilled depth and thickness.

(b) Source: Most likely the shaly limestone of the Geli Khana below. A different source than the Sehkaniyan - and a different oil. Most likely much lighter (higher API) than Sehkaniyan due to deeper depth, higher pressure and minimal leakage (the Butmah seal above is very thick).

(c) Seal: The 650m thick Butmah. The reports of "additional oil intervals between 1710m and GKP's planned 9-5/8" casing point to be set at approximately 2500m MD" (RNS of 18th Sept) within the Butmah seal are extremely encouraging to say the least. Whilst I do not expect any large increase in OIP from the Butmah interval, the fact that it is exhibits oil intervals strongly suggests upward transmission through fractures from the reservoir below. i.e. this augers well for a good result in the Kurre Chine.

(d) Oddsnsods: Only positives so far.


B4. Chia Zaira (Permian):
------------------------
(a) Reservoir: I understand that this reservoir is not targeted on the first well (p.9 in the April presentation) but that does not mean that Chia Zaira should be discounted from the OIP estimate. The February and April presentations do not document the thickness of the zone, but a GVLF can be calculated based on Top depths. In the February presentation the Top is at 2980m. In the April presentation the Top is at 3730m. Given that the Kurre Chine drill depths are 400m deeper than the April presentation prognosis, the approximate actual Top for the Chia Zaira is thereby estimated to be around 4130m. GVLF = 4130 x 4130 / 2980 x 2980 = 1.92

The P50 OIP for the Chia Zaira zone from the February presentation should be increased from 358 MMBL to (1.92 x 358) = 687 MMBL to account for the approximate expected drilled depth.

(b) Source: Shales from the Early/Middle Permian below.

(c) Seal: The Early Triassic Beduh and Mirga Mir above.

(d) Oddsnsods: too early to say.


C. CONCLUSIONS:
--------------

1. Assuming all reservoirs are filled to spill, (a bit like my GKP basket, but in accordance with GKP's own assumptions as stated in the February and April presentations), the total P50 OIP for the Shaikan anticline is 2250 MMBL for the Sehkaniyan (using the mid-point of GKP's own estimate of 1.5 to 3.0 BBL 'thus far'), 1640 MMBL for the Kurre Chine and 687 MMBL for the Chia Zaira. A total of 4577 MMBL. I have included nothing for "the additional oil intervals between 1710m and GKP's planned 9-5/8" casing point to be set at approximately 2500m MD". And my GVLF correction factor approach is seen to be conservative in the Sehkaniyan. Let's round things up to a round 5 BBL.

2. Don't get too carried away! Whilst I have confidence in total Shaikan reservoir volumes of around 5 BBL, the actual fluid content within the Kurre Chine and Chia Zaira remains unknown until the drill bit actually penetrates. But things do look extremely encouraging concerning likely hydrocarbons within the Kurre Chine.

3. Pitts, coming back to "My basis for a 4 BBL estimate for Shaikan 1, is that I lowered it from my initial input of 5 BBL". I do believe that you have rather good input. You wouldn't be a de-ramping scallywag would you? This last sentence is intended to be received in a humurous vein.

4. As SH might have said, Shaikan may be the mother of all wells, (apart from the kidnapped Kirkuk grandmother).

BBBS

wow what a read... but worth it, thanks BB

incredible presentation...thanks..

4billion--5 billion- I'll settle for a fraction of that! It's almost telephone numbers isn't it? very knowledgeable post I'm ready to wait for the proof of the pudding--or to see if it's b+++cks as cynic puts it!

except i wouldn't bother with asterisks!

If it's as much as 4 to 5 billion (big doubts about that) you are looking at the sp flying over 200p....if it's around 1.5 to 2.5 : more to my way of thinking : then something around 120p.....even 500 million barrels would be impressive which would put the sp in the 90's or so...and there are plenty more wells to be drilled...

It is also interesting to note that the Total ceo thinks that the price of crude is going to rise up to $100 per barrel as the recovery gets underway and he says that there could be oil shortages because of the lack of investment over the last 18 months or so.

not so much oil shortages, but for the majors, a lack of additional reserves as it is they who have failed to invest in exploration .... this is what makes good quality minnows and second-liners with proven reserves such tempting morsels

good point.

Takeover target then...another reason for holding this then !.

quite so, and ditto GPX, TLW and a number of others, though it's still a lottery as to which will prove to be the "sultan's favourite"

I hold all three with the latter in an isa....came back into Tullow a couple of days ago on broker upgrades...

rf you obviously missed the Citibank downgrade and the chairman selling 250k shares!

Yep I did indeed..just checked though that target has been raised to 1285p....sp rose quickly before pulling back...tremendous blue chip stock...my target is something above 13....

halifax doesn't like TLW ..... in that respect he's a bit like me with falklands oilies, the difference being that TLW has actually found an awful lot of black stuff and are already building a fleet of spaceships to move it out

It's a super hold is Tullow...been in and out since 40p or so...wish I held on without jumping out many a time...

credit to BBBS (Bah Bah Black Sheep) at another place

At least two very insightful comments from Todd, (well copied duffs55):

http://www.iii.co.uk/investment/detail/?display=discussion&code=cotn%3AGKP.L&threshold=5&it=le&action=detail&id=5346023

1. He said. "Everything is in the RNS. Interesting strucutures means we have identified further hrdrocarbons, however these have not been verified and we will release further on going news in due course."

2. "We are excited about what we are yet to discover, so watch this space"


1. PRIMARIES
-------------
"Everything is in the RNS". Indeed it is. So just how many primaries do we have then Todd?

- RNS of 6th August: "In addition to these well test results, it should be noted that the primary zones of interest for the Shaikan-1 exploration well are the underlying Alan and Mus formations."

- RNS of 25th August: "As previously announced, the Alan and Mus formations were identified as the primary oil bearing zones of interest for Shaikan-1"

- RNS of 18th Sept: "Beyond the 9-5/8" casing shoe, the Shaikan-1 well will drill into the Triassic rock layers to explore the remaining primary hydrocarbon targets"

If the Kurre Chine is now a "primary", the 1.5 - 3.0 BBL in the Alan and Mus formations is now sounding somewhat "secondary"? Or, if we err on the side of caution, how about an 'equal' "primary"? So, for the benefit of prophets (profits?), let me multiply 2 x 2, to get a total for Shaikan of between 3.0 - 6.0 BBL. That equals 4.5 BBL (P50).


2. THE ROOF IS LEAKING AGAIN
---------------------------
"We are excited about what we are yet to discover, so watch this space".

Oil reservoirs are a bit like my house in rainy season. Except that houses leak from without whereas reservoirs leak from within. With reference to my "Basic Geometry" post:

http://www.iii.co.uk/investment/detail/?display=discussion&code=cotn%3AGKP.L&threshold=0&it=le&action=detail&id=5336073

In section B2(a) Reservoir, I was trying to say that the initial Sargelu 'surprise' from 1450-1710 has subsequently been revised to a discovery (in the Alan and Mus formations) from 1467-1710m. The initial oil intervals around 1450m were indeed in the Sargelu, but it is now understood that these are only observations of oil breaking through the roof of the seal at the top of the Alan and Mus reservoir (at 1450m).

Similarly, in section B3(c) I am saying that the oil intervals observed within the Butmah seal from 1710-2500m are once again a consequence of the roof leaking above the Kurre Chine.

"What we are yet to discover" is obvious to Todd. Me too - the roof is leaking again.

BBBS

P.S. Do not expect too much from the next RNS. It will probably 'only' be DGA's confirmation of the 1.5 - 3.0 BBL thus far (to 1710m). But that in itself will still be quite positive for the sp because the markets will then have to seriously consider a most likley best estimate (P50) of around 2.3 BBL rather than their current view of erring on the side of extreme caution by giving GKP only 50% of the low estimate (P90) 1.5 BBL. A revision upwards for the OIP to 2500m is also possible, but that increase is unlikely to be large. Just be patient, it is only a matter of 2-3 weeks before the mother of all RNS's - at TD.

This one rising : I can understand with a big amount of oil discovered but Sterling Energy.....on the back of this....that is crazy !.

well guys--you should all be buying --Nighthawk--they are around the recent placing price of 35p!!---some brokers have target sights ranging from 90p to 268p!--in their recent placing at 35p they have raised @22m to commence a 20 well drilling programme at their Jolly Ranger field in USA where independent seismic consultants have estimated potential reserves of @ 1.5billion barrels of oil!!--time to seriously consider having a punt at these levels of 35p if you are not in them already--before the recent placing even the Investors Chronicle recommended them as a buy at 47p!--I have just topped up with some of my handsome profits on GKP which I bought at 22p and sold half at 91p!--follow me I am sure you will make money in these shares if you get in now!--STRONG BUY @35p!

I'm in HAWK at a loss at the moment...but what they have is chicken feed compared to the Iraq stuff....