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.

From the Times

Take Gulf Keystone Petroleum. This was one of my bid prospects, and the shares duly soared. I advised readers of the column to take profits in mid-February, which would have given an 80 per cent gain on the investment. Had the portfolio been able to take this advice and lock in that profit, the average rise would have been 9.4 per cent Stiil, we play by the rules of the game. In fact, no bid emerged and the shares plunged. Bid activity is hotting up again among oil and gas explorers; Gulf Keystone could again be a prospect.

www.oilbarrel.com

July 02, 2012

A New Update On GuIf Keystone’s Ground Breaking Shaikan Discovery In Iraqi Kurdistan Brings Further Good News
Iraqi Kurdistan has become one of the hottest hydrocarbon provinces in the world. Small cap and mid -tier companies like Gulf Keystone and Afren have piled in in recent years and they have been joined latterly by “ Big Oil” such as ExxonMobil which late last year signed up for six exploration contracts. It is not the first super major with contracts in the semi- autonomous region in the north of Iraq – Marathon Oil arrived in late 2010 –but it is the first super major with contracts elsewhere in Iraq to do this.

Gulf Keystone in particular has been a pioneer in Kurdistan. It has interests in four production sharing contracts (PSCs) including the Shaikan, Sheikh Adi, Ber Bahr and Akri-Bijeel . All the blocks seem highly prospective. The MOL operated Akri-Bijeel block has a P50 resource estimate for the Bijell discovery put at 2.4 billion barrels of oil-in place with further targets still to be drilled on the acreage. Gulf Keystone has a 20 per cent interest here. The Sheikh Adi block, which is operated by Gulf Keystone is home to the Sheikh Adi-1 discovery, where the P90 and P10 numbers stand at 1 billion and 3 billion barrels of gross oil-in-place.

Gulf Keystone’s real flagship though is the world class Shaikan discovery. After three appraisal wells independently audited gross oil-in- place volumes are put at between 8 billion barrels (P90) and 13.4 billion barrels (P10) with a mean value of 10.5 billion barrels. This was a major upgrade on the previous P90 and P10 numbers of 4.9 billion barrels and 10.8 billion barrels respectively. Gulf Keystone has a 75 per cent interest alongside MOL with 20 per cent and Texas Keystone with five per cent.

Now a new update has brought more good news. In its ongoing appraisal programme the company has completed the drilling operations of the Shaikan-5 appraisal well, drilled 6km to the north-east of the Shaikan-2 appraisal well. Shaikan-5 is the fourth well in the five well appraisal programme. In May 2012, the well reached a total depth of 3,750 metres in the Kurre Chine dolomite formation in the Triassic, which is the deepest horizon drilled by a Shaikan well to date. Results obtained in the Jurassic interval indicated a continuous oil column with approximately 237 metres of net pay, and porosities which are consistent with results obtained elsewhere. Oil shows were also recorded whilst drilling in the Triassic formation.

John Gerstenlauer, Gulf Keystone’s Chief Operating Officer commented: “These solid preliminary results obtained with the Shaikan-5 appraisal well confirm the massively prolific nature of the Jurassic interval.”
There will be further testing of the Jurassic and Triassic intervals with the Shaikan-5 and Shaikan-6 wells and the new results will be incorporated into the independently audited gross oil-in-place estimates. What this means is there could be a further reserves upgrade in the short term. Then in 2013 the deeper potential of Triassic and Permian horizons will be tested with the Shaikan-7 exploration well.

A team of analysts from broker FoxDavies went on a site visit in May and were impressed, overall. They say that production could be ramped up pretty quickly. GKP, as they call Gulf Keystone, is currently producing 6,000 bopd from its facilities which is sold domestically for US$ 50 a barrel. The commissioning of extended well test facility (EWT-1) should step up production to 20,000 bopd by Q3’12 while a further upgrade to 60,000 bopd could be achieved 2Q’13 via EWT-2 which is currently under construction.

When we said above that the update is mostly good news, the Fox Davies guys make a small caveat about prospects that relate to access to exports, or more specifically, export revenues. Currently Kurdistan and Baghdad are locked in a battle for Kurdistan’s share of the export revenues Until such times as Kurdistan achieves access to the export revenues accruing to it from its output GKP’s production will be limited to revenues generated by the domestic market . The FD team reckons that the domestic market amounts to between 175,000 bopd and 200,000 bopd and would not support the full development scenarios of all of the fields currently discovered and appraised.
For all this, however, Fox Davies is upbeat about GKP. They say that security fears have been overdone and that the region is largely trouble free. The issues about exports are mainly about timing, and should be resolved in due course. Following the site visit, FoxDavies have upgraded their target price to 350p a share. This compares to 175p currently

Having a good run and fast approaching the 200 DMA.

Harry i'd perfer this.

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From another board.?
Just a quick update, in the conference room. Just met with Tony Hayward briefly. He's also just spoken and publically stated;

"The oil and gas law certainly looks, at this moment in time, like it will be resolved in the very near future

Final update for the day


Gawain_1977

From ii i



Finally finished, well past 6pm here now, and in much need of beer.

Lots of other top guys here of note including Brian O'Cathain from PetroCeltic and key Arfen people. (PS - off topic, but WZR do sound v tasty, hint hint!)

One final comment (I cant say who made it), that was particulalry exciting, noted that "Statoil, Total, Sinopec and Chevron were all looking very closely at Gulf Keystone". Exxon not even mentioned. Shell are playing a 'long game'.

It really confirmed that whilst so much of the news and speculation on this BB is hit-and-miss - hearing those particular companies mentioned (without prompting) demonstrates that many posters here are much closer to the mark than they realise.

I hate to sound like a ramper, as I am NOT. I just want to report on events that have a relevance to my shareholding, and therefore to others on the board.

Here's to hoping the recent sustained rises are much more than just another 'pump and dump'. For the record, i am convinced otherwise and am more confident than ever about the huge potential of this investment. Good luck everyone...

G1977

Incredible performance.

Make of this what you like?


From Gawain_1977 on iii:-

*Early updates - majors into Kurdistan

I have an update from Istanbul that people will find interesting. It was noted that the KRG will be making announcements very soon about more Majors entering into contracts with them.

I wont mention who said this but he is about as relevant & connected to this statement as you can actually get.

A clear picture has emerged since yesterday's conversations/statements that we WILL see significant & sustained news, soon - but that there must be a degree of patience from investors as there are step-by-step political processes and 'etiquette' that must be adhered to, mostly based around allowing the Americans to enter softly-softly and for Exxon to tread gently and tactfully.

I do believe, speaking this week with the relevant people involved, that the KRG are absolutely itching to shout out to the world about investors coming in and M&A activity - but can't quite just yet as they are being muzzled by the US Govt.

It all makes a lot of sense, because it's a highly sensitive development, and I think the mood is now reflected on the BB where people are almost bursting with anticipation as we wait for the greyhound to be released from its proverbial trap.

Interesting to wait for news on Rex Tillerson in Erbil - interesting and critical three days ahead of us, in my opinion.

Hope this news is useful BUT please just view this as my own reporting rather than proven hard 'fact', of course. We all know just how surprising GKP and the KRG (and others) can be!!

GLA*

PS. USA goverment having second thoughts on the F19's to the ICG.

This Gawain_1977 is a real bullshitting ramper.............must be an old one who got caught out now under a new name trying to ramp like mad..................

Takes one to know one.,.

Seems the Excalibur claim is due to be heard tomorrow?

From a well respected and genuine poster.

A snippet from oilman 63 from iii

Good evening from Erbil oilman63 72

View Author's profileAdd to favouritesIgnoreAuthor's posts
Evening all

Excalibur won't be going away just yet IMO

So I will not be doing anything with the case tomorrow

I will be doing a long and very good report on Kurdistan even I was shocked at how well and how fast things are growing out here

Back in uk late tomorrow

Will be keeping my London meetings Friday

All the best
Oilman63

From iii (tsalex) - he was in court today watching proceedings-

*Sorry for being quiet since my last report from the court. My battery run flat and there was quite poor 3G reception as well.

So, the outcome of backers disclosure part is as follows:
1. Judge ordered to disclose the identities of current backers
2. Judge ordered to disclose the identities of unsuccessful funding parties that were approached by Excalibur
3. Judge ordered to disclose the financial terms and arrangements agreed with current backers as well as arrangements that were discussed with unsuccessful funding parties that were discussed with Excalibur
4. Judge at first set the deadline of 2 weeks for this disclosure. Excal legal team argued that they are quite busy and asked for at leas a month. Judge agreed to give only 3 weeks in the view of pre-trial hearing starting on July 20-th, so to allow more time to prepare.

Basically all what Gulf legal teams asked for was approved by judge.

That was the point of frustration for Excal barrister, as he tried to appeal, but his appeal was dismissed by judge straight away.

Then they proceeded to discuss various points in submitted disclosures. Majority was regarded to disclosures from the court in Florida (Mr Kozel vs Mrs Kozel).

The last topic was one of CPR reports submitted by Gulf defendants. Excal was arguing that competent person should be practicing lawyer rather then just having necessary legal qualification. Judge disagreed and allowed that particular CPR valid. As they were discussing CV of that competent person it was slipped that this competent person either used to work or is working for Total.

Then Judge postponed the hearing till Monday 10am. There will be some private part at the beginning as well (Gulf defendants asked for it), but it will then be public hearing.

So, all in all Excal was pushed and mostly all the Gulf points were agreed by Judge*

But two sources told the Telegraph that trucks had begun transporting crude oil from Kurdistan over the border to Turkey on Thursday.

Malcolm Graham-Wood, oil analyst at VSA Capital, said the move would be significant as it would show "serious commitment" between Kurdistan and Turkey.

"We didn't expect this to happen so soon," he said. "The opening of the border massively increases the scope for Kurdistan to sell crude.”

http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/9380009/Kurdistan-begins-oil-exports-to-Turkey.html

Some reading for the weekend?

http://www.iraqoilreport.com/business/companies/gulf-keystone-doubles-down-on-kurdistan-8292/



Gulf Keystone doubles down on Kurdistan
Gulf Keystone Operations in Iraqi Kurdistan
A worker descends the Gulf Keystone drilling platform at Shaikan 5. (SEBASTIAN MEYER/Iraq Oil Report/Metrography)
By Ben Lando of Iraq Oil Report
Published July 6, 2012

SHAIKAN - On a hilltop at Shaikan, one of Iraqi Kurdistan's biggest oil fields, the drillmaster on a Gulf Keystone rig faced a dilemma at Well No. 5.

As the drill tore deeper through the earth, drilling fluid that was supposed to return to the surface was instead being lost into the myriad fractures in the rock. The company was forced to alter its composition of water and chemicals - and to slow the drilling down.

Yet this setback also portended a hidden reward.

"Those cracks make it difficult to drill. But the fact that it is difficult to drill with the fractures means the wells are more productive," said Richard Lowe, the Gulf Keystone drilling manager. "It's almost sort of an inverse relationship – it's challenging because of the fractures and drilling conditions, but the upside is the actual scale of the field."

Gulf Keystone Petroleum is at the forefront of the oil boom in Iraqi Kurdistan, and the drilling of this well has been just one of the many aspects of the company's operations that have presented both considerable challenges and enormous opportunity.

Like the geology of its exploration block, the political situation in Kurdistan has presented Gulf Keystone – along with dozens of other foreign oil companies – with a slew of risks. The semi-autonomous Kurdistan Regional Government (KRG) is locked in a nearly decade-long political dispute with Baghdad that, at its core, calls into question the legitimacy of the KRG's contracts.

That political risk has helped the companies negotiate lucrative production sharing contracts that promise significant profits – especially compared to Baghdad's more conservative technical service contracts.

In its 2011 annual report, released last month, Gulf Keystone estimated that "full field development is estimated to cost in the order of $7 billion to $10 billion gross, with the first 100,000 (barrels per day) of production estimated to cost less than 5% of that amount."

Geological irregularities may have raised the front-end costs of the project – operating a single rig can cost more than $100,000 per day – but at the other end lies an oil field that could hold 10.5 billion barrels of oil in place, according to Gulf Keystone estimates.

And that's just one field.

Gulf Keystone is operator or junior partner in four projects in Kurdistan, which has signed 46 contracts with oil and gas companies to explore for and produce oil. According to a Gulf Keystone investor publication released in late May, the company's two most prospective blocks to date – Shaikan, which the company began exploring in 2008, and Akri-Bijeel, awarded in 2007 – will in 2015 have a combined 200,000 bpd of exports.

Final reserves evaluation of Shaikan – and Kurdistan's other newly discovered fields – will only take place after full exploration and assessment, which takes considerable time and money. Until then, nobody is certain how much oil really lies beneath the land, and how much of it might be economically viable to extract.

The Kurdistan Regional Government (KRG) and outside analysts have estimated that Iraq's semi-autonomous northern region could hold between 30 billion and 50 billion barrels of reserves. Iraq as a whole – not including the fields discovered or developed by the KRG since 2003 – boasts 143.1 billion barrels.

The country as a whole is under-explored, and presents a massive opportunity for Iraq, foreign oil companies, and global crude consumers.

Political risk

Companies working in Kurdistan have encountered challenges far more vexing than the difficulties of drilling through kilometers of irregular rocks.

The KRG has been locked in a nearly decade-long dispute with the central government in Baghdad over how to structure the Iraqi federal state. One of the most consequential state powers – and a flashpoint for political conflict – is the right to sign oil contracts.

Baghdad, which claims exclusive contracting rights, calls the KRG's deals illegal and refuses to endorse the terms that the Kurds negotiated. The Oil Ministry has also banned companies with oil contracts in the north from signing new deals in the south.

The dispute has stymied oil development, especially in Kurdistan. With the notable exception of ExxonMobil, which signed six contracts with the KRG in October 2011, many of the world's largest and most capable companies have been reluctant to invest, both for fear of angering Baghdad and because the central government controls exports.

KRG Minister of Natural Resources Ashti Hawrami has said that Kurdistan could easily boost production to 300,000 bpd, but most of that potential has been shut in. Kurdistan once exported crude through Baghdad-controlled pipelines, under the terms of a stop-gap agreement signed in January 2011, but the KRG cut off exports on April 1 amidst a dispute over payments.

In theory, every new discovery should add pressure for politicians on all sides to find an agreement, which would increase the pace of investment in the oil sector and raise crude output that is already regularly generating between $6 billion and $8 billion per month for Iraq.

In reality, however, Iraq's oil development – in both the north and south – has complicated the political equation. As companies pour money into the expensive early stages of their projects, they create facts on the ground that raise the stakes of any political negotiations.

Since 2007 Parliament has intermittently tried to pass comprehensive oil legislation, which could help resolve some of the major disputes. Members of the Parliament Oil and Gas Committee have reported that a central sticking point in their failed negotiations has been the question of how to bring existing oil projects into harmony with a new, prospective legal framework.

Doubling down

Meanwhile, companies have responded to the new oil discoveries with a sense of urgency. Despite the lack of a foreseeable resolution to the conflict with Baghdad, investors are honoring their contracts and building up their portfolios.

At the annual CWC Iraq Petroleum conference in London last month, Hawrami said he's expecting more top international oil companies – a caliber he's now able to command after ExxonMobil's entry last year – to sign for the remaining empty blocks and to begin buying out the smaller companies that gambled on Kurdish crude years ago.

Gulf Keystone is among the oil firms doubling down on their KRG gamble. The company, which is listed on the London Stock Exchange's Alternative Investment Market, also operates the Shaikh Adi block and is junior partner in the Ber Bahr and Akri-Bijeel blocks.

The company has hired outside consultants to oversee the sale of its 20 percent stake in Akri-Bijeel, in an effort to raise cash.

Ber Bahr, operated by Genel Energy, the Anglo-Turkish firm now led by ex-BP chief Tony Hayward, just saw the completion of its first exploration well.

At Shaikh Adi, Gulf Keystone spudded its second exploration well in May. And a third exploration well was spudded in May by the operator Kalegran, which is a subsidiary of Hungary's MOL.

Adapting to challenges

The more Gulf Keystone drills in the KRG, the more the company learns about the area's geology, and they apply lessons learned to speed up the drilling of future wells, according to Lowe.

So too must Gulf Keystone adapt to some unfriendly conditions above the surface. A gas injection well for Shaikan will be drilled in an area now called Snake Valley, nicknamed for its population of dangerous wildlife.

The Akri-Bijeel well No. 1, located 1,400 meters above sea level on a flat-topped mountain, was out of service for more than 20 days recently because a lightning strike burned out the motors powering the drill.

The overall progress of the company's operations has also created challenges.

As the wells are expected to kick up even more crude, Gulf Keystone is expanding a temporary extended well test facility (EWT), which currently has about 7,000 bpd of flow-through capacity, into a permanent production facility that will have 40,000 bpd capacity by early 2013. Shaikan wells 1 and 3 will be joined by Shaikan 4 to this facility, which is referred to as EWT 1.

Shaikan wells 5 and 6 will be tied to another new facility, EWT 2.

Storage capacity, currently at 40,000 barrels, will be more than doubled.

And tanker trucks, averaging 200 barrels each, will double their loading rate. They currently load two at a time, which allows for about 30 trucks per day. The Ministry of Natural Resources (MNR) has staff on site to document the trucks.

The maximum the facility has every loaded in a day was 7,500 barrels. The orders for filling up tankers comes from the MNR.

"So when they say they want 5,000 per day, we supply 5. If they say 4, we supply 4," said one official at the facility.

The eventual output from the production facility depends on the KRG's future plans for its crude – how much oil will be sent to domestic refineries, the Iraq-Turkey Pipeline (ITP), or future pipelines.

Initial design and route survey has been completed for a 122 kilometer pipeline to connect Shaikan with the ITP at Feyshkabour. Permission to implement the plan will depend on broader policy decisions that are playing out within the Erbil-Baghdad feud, which could alter the route.

Another complicating factor is the composition of the crude from Shaikan, which is heavier than the oil currently flowing through the ITP. Another pipeline, with between 400,000 bpd and 600,000 bpd of capacity, is set to be built for the crude that cannot be injected into the current pipeline blend.

The company is also looking at supplying excess gas to a local power plant because they expect they will have more than can be used to generate power at the production facility.

"We need to have infrastructure in place – you have to have export pipelines, you have to have gas pipelines," said Ron Kuntz, the production facilities manager. "We'll just do it in nice, safe steps."

In the spotlight

After Norwegian firm DNO (operator of the Tawke field, among others) and Genel Energy (operator of Taq Taq, among others), Gulf Keystone is the biggest player in the KRG when you combine acreage and production activities.

It has had its unwanted moments in the spotlight.

CEO Todd Kozel's divorce was public knowledge – and splashed in the tabloids – as a settlement focused on his Gulf Keystone earnings and ownership. That saga appears to be over.

The company has also come under intense media speculation that it will be bought out. Sources within the company have said there are no active talks with any buyers.

This fall, a London court is to hear a lawsuit filed by a little known U.S. firm Excalibur Ventures, which claims Kozel included them in the original bid for Shaikan, but excluded them when the final deal was signed. The lawsuit is seeking $558 million.

Gulf Keystone has also sued a blogger for using the media to manipulate stock prices, even as the value of its own stock has been – like others in Kurdistan – accused of being overvalued.

"We will not tolerate malicious attempts to damage the company's reputation and share price," Kozel said in a May 10 statement following heavily circulated rumors the company would raise money by selling shares. "We have instructed the company's lawyers to use all means necessary to protect our shareholders from this malicious and unfounded attack."

Cautious optimism

Shaikan by itself would be a massive asset by any stock exchange's reckoning -- but only if the oil can be sent to market. Like other firms who have banked on Kurdish oil wealth, Gulf Keystone awaits a breakthrough in the ongoing dispute between the KRG and Baghdad.

Its share price often jumps when the news from Iraq suggests a political victory for Kurdistan, as when the semi-autonomous region landed ExxonMobil. And the stock also tends to subside after bad news, such as the export cutoff this spring.

The company has sold more than 600,000 barrels to the domestic market in Iraqi Kurdistan, according to an official with access to the sales data. KRG officials and others familiar with the domestic market estimate the price between $40 and $65 per barrel, with $25 per barrel being returned to Gulf Keystone.

The company has spent nearly $400 million in Iraq and is carrying out plans to invest more than $200 million, as it enhances its current production facilities, builds new infrastructure, and awaits direction for a new pipeline that will send heavy crude to the Turkish border.

That pipeline is pegged at $170 million and, according to recent announcements by Hawrami, would have a 500,000 bpd capacity and potentially transit directly from Kurdish-controlled Iraq into Turkey.

What happens to that crude, and how its value is translated into revenues for Gulf Keystone, depends ultimately on how Baghdad and Erbil find an agreement on it and the 47other production sharing contracts.

Without an agreement, Shaikan crude will be shut in, sent to a less-profitable domestic refining market, or exported unilaterally by the KRG without Baghdad approval – likely a combination of the three. Any of those scenarios present significant risk and uncertainty.

Yet as the KRG presses ahead with development of its oil sector at large, both the Kurds and its company partners are betting that the opportunity to make money will sway Baghdad, as well as other big investors.

The presence of ExxonMobil – and the size of Gulf Keystone's discoveries to date – suggests the company will have little trouble convincing investors and prospective buyers that Kurdish crude will find its way to market, one way or another.

Big potential

Richard Lowe, the drilling manager, said Kurdistan wells have a 70 percent discovery rate – compared to 10-15 percent worldwide.

"Each well in Kurdistan is unique because it is so heavily folded and fractured," he said about the geology, whose complexity has offered unexpected rewards.

Shaikan's well no. 6, for example, was initially drilled at the far end of the field to test the "spill point of the structure" -- where the hydrocarbons reserve ends and water was expected – but when the drill got more than 3 kilometers deep, it actually found more oil.

"It was a very, very good well for us," said country manager Adnan Samarrai, "it is very promising."

The work in the mountains of Kurdistan can be more laborious and time-consuming than in other parts of the world. It takes a month – 150 truckloads — to take down, transport, and put up a rig.

"It is extremely challenging," said Lowe, "but the rewards are quite good -- we find one billion barrels here, one billion barrels there."

http://www.iraqoilreport.com/business/companies/gulf-keystone-doubles-down-on-kurdistan-8292/

From FT. Investor roadshow?

Iraq-focused oil explorer Gulf Keystone Petroleum bounced 29.1 per cent after an investor roadshow and following reports that ExxonMobil boss Rex Tillerson was meeting officials in Kurdistan. Reports in February that Exxon might bid for Gulf Keystone had lifted the stock around 50 per cent above Friday’s closing level.

http://www.mees.com/en/sections/71/articles/5337-gulf-keystone-expects-oil-in-place-bost-at-iraq-s-shaikan-field


With the AGM on the 19th,an OIP update is to be expected,along with other operational
updates. Just 7 trading days left and par for the course RUMOURS,the latest being BP?
3 BP for 1 GKP(not to be taken seriously),so the coming days will be interesting,thats for sure?

Seems the above Analysist are well respected,so anyone thinking of joining?

$2725


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http://www.iraqoilreport.com/oil/refineries-fuel/kurdistan-begins-independent-crude-exports-8323/

http://www.iraqoilreport.com/oil/refineries-fuel/kurdistan-begins-independent-crude-exports-8323/

Something not right here?


33,354
11/07/12 09:02 211.0 293 AT 211.0 212.25 Sell 495,817 749,684 33,354
11/07/12 09:02 211.05 3,468 O 211.0 212.25 Sell 495,817 749,391 33,354
11/07/12 09:01 211.725 10,000 O 211.0 212.25 Buy 395,817 745,923 33,354
11/07/12 09:01 212.0 1,065 AT 211.0 212.0 Buy 385,817 745,923 33,354
11/07/12 09:01 212.0 5,998 AT 211.0 212.0 Buy 380,238 745,923 33,3