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.

Oilman is a good source.

just out on iii

I am sorry but due to these boards wanting all info spelling out to them ....no riddles
And the fact that the company watches all posts They are not thick.
It does not take a lot to work out where it's come from.
All I will say is we are getting bigger.

DO NOT TRADE ON WHAT I SAY

All the best
Oilman63

< http://ceraweek.rmxpres.com/webcast/data/Cera20124EFHI03061420/main.htm#

Hawrami's presentation is very illuminating
Reading between the lines it is clear to me that Shaikan is indeed a huge find and very relevant to the 1m (2014) then 2m bpd by (2018)targets
"I anticipate a lot of (consolidation)movement in the market this year," he said in the Q&A
On the contracts and Bagdhad debate he said there will be a resolution: "2012 will reach agreements with all concerned contracts will be honoured and finalised" ec, etc
Well worth the listen

noc is he the nutty professor?

No its Eddie Murphy

From NT, SH6 flying,drilling like lightening,no water?

TNP/EM

Comment
Hi Lucian.
I think you have missed the fact that the said reserves have been indepentently verified. The oil is there. The risk here, and it’s huge, is Iraqi politics.

Just look at the size of Shaikan(take the distance between wells),

SH-1 and SH-3: Both close to the green blob labelled Shaikan-1B
SH-2: Shaikan-B Location (around 9 km east of SH-1/3)
SH-4: Shaikan-D Location (around 6 km west of SH-1/3)
SH-5: Shaikan-G Location (around 15 km north-east of SH-1/3)
SH-6: Shaikan-C Location (around 18 km east of SH-1/3)


From S 4 is 6km to the left of 1/3 and 6 is 18km to the right, 24 KMS and no water???

So can we say we are past the estimated Oil water contact @ 2230m TVDSS?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
way past just had to stop for a bit to wipe the oil off the drill bit that we did not know was there.


This well needed to be stepped out a lot wider
As I said last night this is bigger than we think

All the best
Oilman

hsbc--little devils---from iii.
===============================================================================

09:16


HSBC report $/bbl_Solved


Robbean

2

hi Everyone,

I was struggling to make sense of HSBC's valuation and $ / bbl figure in their report ($2.33/bbl), which was well below figures we have been using. Well, I had a closer look at the report and found a sneaky little paragraph that explains the difference and leads to a very different conclusion...

HSBC state (p.44): "The key pricing measure that is pertinent to this report is the prices that companies are able to realise on domestic sales. At present the companies achieve USD50-70/bbl. We have assumed this discount will continue and so we assume the domestic price for liquids will run at a 50% discount to our oil price forecast."

So the $/bbl figures they quote include BOTH the 40% tax discount AND a further 50% reduction to reflect the domestic sales situation. This means that if and when exports resume, HSBC will then attribute $4.66 / bbl post tax, or $7.77 pre-tax.

I don't think I'm quite comparing like with like but this is very similar to Dalesman's NPV30 figure (albeit post-tax) of $7.33 and 2P value of $4.62 / bbl. The post-tax value also corresponds closely with JG's valuation figure, calculated from his remarks in New York to be $4.62 / bbl.

So what? Well you would be forgiven for thinking this was their discount for political risk... But no. A separate section detailing HSBC's valuation methods indicates ANOTHER 50% reduction for political risk. Put the two together and we have an effective 75% discount due to the politics/lack of exports, which is essentially a single issue.

Where does this leave us?
HSBC state (p.65): "Using the methodology set out in the valuation section, we derive an asset value for the company of 492p/share. On top of this we add risked exploration upside of 47p/share (full details of the breakdown of this valuation are given later). As we mentioned earlier, we have assumed a 50% discount to NAV for the political risk. This yields a target price of 280p."

At this point, they conveniently fail to mention the 50% discount they have already applied to their $ / bbl figure. Remove this and we are left with an unrisked asset value of 984p, or 492p when discounting by 50% for political risk. Adding exploration upside we have 1078p and 539p, respectively.

I think it's fair to say HSBC are understating the case when they say:
"We believe we have taken a conservative view on the valuations of the companies. There is scope for these valuations to increase as the political tensions ease and the ability to export improves." (p.45)

It would have been nice if they had added "In fact, a complete resolution of the politics and resumption of exports would increase our valuation four-fold, based on present OiP figures. With updates due any time from Sh-4, 5, and 6, we rate GKP a STONKING BUY at these levels"

But this wouldn't have served their clients who wanted in at the lowest possible price now, would it?

I hope this helps anyone else who has struggled to reconcile the figures in the report and those of Dalesman, BBBS, TPO, Gramacho and others who have studied the PSC terms. Not least because the report has been used as a catalyst to send the sp tumbling.

Good luck all- Rob


Time for walkies, gracie.

Seems theirs a little bit of Squeeky bottom time,due to Exxons presentation today.

http://ir.exxonmobil.com/phoenix.zhtml?c=115024&p=irol-EventDetails&EventId=4680210#

What it should do is to clear up the question of KRG v ICG,once and for all.

bet it doesn't ..... what you hear and see is irrelevant compared to what you do not

Your probably right, just picking up on several posts from a few nervy PI's.

Exxons presentation is on webcast,picking up on comments,they have confirmed KRG contracts?

ut @ 286.5P.

Its the big question acquisitions, he said that he would like to buy....in the US....and things which are synergistic with what they are doing...asset acquisitions because of the value, and willing partners..

http://www.google.co.uk/finance?q=PINK:GUKYF

$4.69 = £2.9646P

A well thought out post,with a little opptomisum.

Dalesman
Thanks for that top notch post earlier. One or two points arise from that.

Looking at oil volumes at Shaikan first.
The 10.5 Bn Barrels P50 really is historic, a whole 4 months old in fact ! Still quite a long time in consideration of what progress has been made at Shaikan since then.

To achieve further upgrades, most were looking for the SH-4 test results, data from a completed SH-5 and SH-6 and the Fracture Study. Since the 23rd January ops update we have had no further Ops news. I think that the GKP BoD are playing a blinder by holding back until the time is right. I was hoping they would do this and behind the scenes get the rate of drilling progress moving very quickly, which appears to be happening according to a couple of recent reports.

Oilman63 this morning
08:57 Re: Nobletrader? oilman63 12

Thanks oilman,

So can we say we are past the estimated Oil water contact @ 2230m TVDSS?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
way past just had to stop for a bit to wipe the oil off the drill bit that we did not know was there.

This well needed to be stepped out a lot wider
As I said last night this is bigger than we think

All the best
Oilman
-----------------------

From nobletrader
GKP Today 01:20

Sh-6 drilling like lightening , problem is though not a drop of............................................................ water
l
Hope the pesky singapore slingers didn't fuk you all over yest
------------------------------

From 9th to 23rd Jan SH-5 had been drilling ahead at a rate of 40 metres per day and if reasonable rates have been sustained or even increased, we could be at the expected TD within a week, maybe two. If they got up to a sustained 50 m/day it is possible that the expected TD could have already been reached.

With very encouraging official and unofficial reports on the Shaikan 4 test results, the reports as above from reliable sources on progress at SH-6 of further unexpected oil, no OWC, needing to step out further and this is bigger than we think, have very major implications for very substantial oil volume increases.

All in all the 10.5 billion P50 really is looking a long way backwards now, historic. Taking more note of the likes of John Gerstenlauer having already hinted at 18billion OIP and Todd having talked of doubling of the figures. There’s also the latest BBBS NAV numbers.

BBBS -- Latest GKP NAV extract:--
I’ve been steady as a rock on my 100 billion barrels across all four Blocks for quite some time now. I started out by saying “I ain’t being conservative no more”, but alas and alack, Shaikan keeps showing me up – as I have admitted in several of my more recent posts. Let me be clear – my current view is that 100 billion barrels is DEFINITELY conservative. I have been working on a post for some time now that attempts to justify why Shaikan will most likley end up containing 30+ billion barrels.
-------------------

Although there has been little officially announced operationally, it looks very likely that that we are already into the range of the JG and TK figures of 18-21 Billion barrels at Shaikan and heading for the BBBS numbers of 30+ Billion barrels at Shaikan.

On the valuation side shouldn’t more notice be taken of several factors outside the ‘Traditional’ Western world ways of valuation ? Such factors as the way the Chinese would look at valuation should be included together with the Globally Strategic importance of Shaikan and the Greater Shaikan super-giant oilfield, the energy security of nations. A Strategic Premium.
The £17.50 you mention in your article reads to me as being for Shaikan if the OIP is doubled there from the 10.5 bn mark. Is that correct ?

Finally, being ring fenced by Exxon into a non-competitive offer for all or part of GKP is the last thing I want to see, I doubt they will go beyond a lowball bid. It strikes me that Anti-Competition Practise laws would apply to this, not only for Exxon but any other involved parties which might just include the KRG.
PW should certainly be looking for strong competition in a bidding process and be able to drum up plenty of interest, would find it extraordinary if they didn’t with the nature of what is on offer.

I think we need assurances from the GKP BoD that they will not accept or recommend any bid, non-competitive or competitive, for all or part of Shaikan/GKP before shareholders are consulted in either case. We do need a competitive and open bidding process. The chance of being railroaded by Exxon as a sole bidder should be stamped out.


The post from Oilman63 on SH-6 really is excellent news, needs confirming but we know he is a reliable source. Looking forward to getting that next Operations Update, but only when the timing is right.

noc just try to relax you remind us of oily rag.

He's got to boost his pension some how hal ;)

£3+ back on the cards today.,.