Keeping on top of the Drills......

http://www.iii.co.uk/investment/detail?code=cotn%3AGKP.L&display=discussion&action=detail&id=9196529 Author scaramouche View Profile Add to favourites Ignore Date posted Monday 10:52 Subject Keeping on top of the Drills...... Votes for this Posting Voted 152 times. Message With today’s Operational Update IMO offering strong hints that SH-4 results could be truly amazing, I thought it might be a good time to update my list of drills and their statuses, previously posted about 3 months ago. The list has several purposes - a history of where we have been; an indication of where we are right now; and a possible glimpse into the future of where we ought to be quite soon! For ease of reference, I have separated the drills according to their blocks... 1. SHAIKAN (operated by GKP): Shaikan-1 = spudded on 27 Apr 2009- target 3000m-completed 1 July 2010- Final depth 2950m- Drill took 14 months. Shaikan-2 = spudded on 1 Dec 2010- target 5000m- completed 18 Aug 2011 - Final depth 3300m- Drill took 8.5 months. Shaikan-3 = spudded on 2 Sep 2010- target 1100m -completed 5 Jan 2011- Final depth 1157m- Drill took 4 months. SHAIKAN-4 = spudded on 27 May 2011- target 3760m)- completed 13 December 2011- Final depth 3387m- Drill took 6.5 months. ***TESTING ON SH-4 ONGOING WITH TWO TESTS (OUT OF 7) COMPLETE *** SHAIKAN-5 = spudded on 28 Oct 2011- target 3500m- currently at 1571m about 3 months into the drill. *** At the current rate, SH-5 IS LIKELY TO COMPLETE IN MAY 2012 ***. SHAIKAN-6 = spudded on 16 December 2011- target 3800m- currently at 844m after about 5 weeks. *** At the current rate, SH-6 IS LIKELY TO COMPLETE IN MAY 2012 *** Shaikan-7 = a contingent well, originally planned to spud in March 2012, but not referred to in latest RNS! It looks as though this is now unlikely to be required. 2. SHEIKH ADI (operated by GKP):- Sheikh Adi-1 = spudded 4 Aug 2010- target 3850m- completed 10 Aug 2011- Final depth 3780m- Drill took 12 months. Sheikh Adi -2 = expected to spud in February/March 2012 and complete about 7 months later. 3. AKRI-BIJEEL (operated by MOL): Bijeel-1 = spudded 11 Dec 2009- target 4300m- completed 8 Nov 2010- Final depth 3967m- Drill took 11 months. Bekhme-1 = spudded 21 Mar 2011- target 3000m- completed late October 2011- Final depth 5000m- Drill took 8 months. Aqra-1 = Spudded on 17 January 2012 target 4700m- Drill expected to take 7 months. Bakrman-1 = originally expected to spud in November 2011, but has been moved to the second half of 2012. *** SALE OF AKRI-BIJEEL LIKELY TO BE CONCLUDED IN APRIL 2012 (JG comments in Jan 2012) ***. 4. BER BAHR (operated by Genel): BB-1 = spudded 10 October 2011- target originally 2100m but recently revised to 3000m- currently at 2778 m (3.5 months into the drill). **** BB-1 IS EXPECTED TO COMPLETE IN FEB 2012, WITH RESULTS IMMINENT *** MY CONCLUSIONS: • AKRI-BIJEEL is likely to be sold in April 2012 but will include ONLY the results from Bijell-1 (2.4 Billion OIP) and Bekhme-1 (apparently not commercial). MOL seems however to be confidently planning a series of exploration and appraisal wells on the block.... after GKP has sold! • SHAIKAN should be fully explored and appraised in May,June 2012 in readiness for sale. The OIP figures are subject to TWO further major upgrades by then according to JG, when the plan for the development by a super-major can also be finalised for submission to the KRG. • BER BAHR is currently only about 3 months into a long-term plan for its exploration and appraisal, with clealry massive upside. Given that it is expected to be 1.5 times the size of Shaikan, GKP should be looking to ensure that its 40% WI in the block is not sold off too early or too cheaply IMHO. • SHEIKH ADI has had only one exploration well drilled to date and is believed to be about half the size of Shaikan. It has clearly been put on the back burner with all hands to the pump at Shaikan! It is however important to remember that we have a huge 80% Working Interest in that block (double that of Ber Bahr). It too should not be sold off too early or too cheaply IMHO. Finally, whether or not you agree with my interpretation, the evidence is very clearly that Big News IS just around the corner... and GKP has some difficult decisions to make very soon as to how best to deal with the present state of play on every one of its blocks. IMO, one clear sign as to what the future may hold is whether GKP makes further progress in its previously declared intention to join the FTSE.... presumably in March. I will save my comments on that possible future scenario for another day. AIMHO and please DYOR. GLA, scaramouche =============== 01:26 No stopping the momentum now investor48 14 Hi All, Total's entry into Kurdistan,clearly demonstrates the failure of the TSC,which Shahristani thought was the best ever deal for Iraq! The Times also reported Exxon's entry into Kurdistan sometime in June last year,and in most cases,most reputable media seldom report news if they do not know the authenticity of their source. ExxonMobil,BP,SHELL,TOTAL,CNPC,CNOOC,etc,etc bidded for these TSC's towards the end of 2009,thinking that by putting a foot into Southern Iraq,will allow them to negotiate better deals with Baghdad in the future.These oil companies,IMHO were also probably promised that the Oil and Gas Law would be passed after the March 2010 elections. As such,with no Oil Law in placed,no Oil Major or even NOC will invest billions on secondary recovery,such as the massive water flood project by using treated seawater,with a meagre return of between USD 1.50-3.00 per barrel profit oil!Please bear in mind that these Majors have their own targeted IRR for their investments! Having put a foot in Southern Iraq,these Majors and NOCs were hoping that the new exploration acreages in the South could be negotiated amongst themselves with Baghdad,since they participated in the 1st round of the provened oil fields TSC,but unfortunately,round 2 will also be bidded,and still no Oil Law in sight!! Total's entry into Kurdistan is the beginning of the end of Shahristani's oil policies and game over for Baghdad!!How many more oil Majors and NOCs can Baghdad blacklist??!! Baghdad should now sit with down with Kurdistan to draw up a comprehensive oil policy that makes it fair to Oil Majors and NOC's,pass the Oil Law, than continue with political rhetoric that do not benefit the ordinary Iraqi,and should now put the face and pride isuues behind them,to recognise that Ashti Hawrami's oil policies have worked and benefited Kurdistan and will also benefit Iraq. For those that fear Kurdistan,one should now see the writings on the wall that politics in Baghdad do not deter the people in the oil industry from investing in Kurdistan! The Tony Hayward and Nat Rothschild of the world,do not blindly invest in Kurdistan!!GKP has discovered Shaikan,one of the largest discovery in 30years and it makes us all GKpians to realise how much value Shaikan is to GKP,just by itself! At Friday's closing price of 275p,we will test the Management's stock options of 325p and 375p soon!!The momentum is too strong now,and unstoppable! Whilst many derampers of GKP have belittle the intelligence of most Pi's the last 12months with their conjecture of a nuclear war,their little price predicting machine,etc,etc the fundamentals of GKP continues to strengthen by the month and that Kurdistan is clearly the preferred investment region of Iraq. Great ties with Turkey,with plans of their own pipelines and payment mechanism sorted with Turkey,are clear signs that Kurdistan is not waiting for Baghdad to pass the Oil Law!!With or wiithout the Oil Law,Kurdish oil will flow and according to Ashti,it will breach 1million barrels per day by 2015. Interesting days and weeks ahead!This is the most exciting stock,IMHO the next couple of weeks! Goodluck and best wishes to all,be steadfast,since most of you have already been so patient holding GKP for the last 24-36months! =============== Re: Total joins Kurdistan oil grab Fruit n Veg 13 Total also has a minority stake in the Halfaya oil field in southern Iraq. What is significant here is that Total has a southern contract. If this story is correct, it means Total’s is the second western oil major allegedly with ‘something to lose’ to blow a very large raspberry to Baghdad’s blacklist. We suspected the game was up for Shahristani when Exxon stomped into Kurdistan – and into disputed territory at that. Now Total’s reported move has validated the industry’s view that the blacklist is not worth the paper it is written on. This also puts the O&G law firmly on the back burner. Monday will be interesting, what with this breaking news and Exxon Q4 results. ============ Be careful out there with your "its done" attitude, you know how the Markets can draw you in then spit you out as if nothing had happened...... 3D ------ 60 -70 bagger in 36 months ----------------------------------------- 5p-6p 18th March 2009 http://uk.finance.yahoo.com/q/hp?s=GKP.L&a=08&b=8&c=2004&d=00&e=29&f=2012&g=d&z=66&y=660 263p - 350p 12th Jan 2012 http://uk.finance.yahoo.com/q/hp?s=GKP.L&a=08&b=8&c=2004&d=00&e=29&f=2012&g=d&z=6 ------------ ==================== 08:00 From stranglehold to stampede? GKP.L 141 Nearly 3 months ago, I posted details of all the companies that had TSCs in Southern Iraq, and the stringent terms under which they were operating. http://www.iii.co.uk/investment/detail?code=cotn%3AGKP.L&display=discussion&threshold=0&action=detail&id=8915923 Here’s an extract from that post: Anyway, BBBS, from the details above I have concluded that there are 15 large oil companies operating in Southern Iraq: • BP of the UK • SHELL of the UK/Netherlands • Exxon Mobil and Occidental of the USA • PETRONAS of Malaysia • CNPC of China • LUKOIL and GAZPROM NEFT of Russia • TOTAL of France • ENI of Italy • STATOIL of Norway • TPAO of Turkey • SONANGOL of Angola • JAPEX of Japan • KOGAS of South Korea Those in the top half of the list are perhaps the most likely contenders to move into Kurdistan, and could be the reason that Shamaran declares “Additional Industry Interest Imminent”... perhaps also signalling the end to the ICG imposed ‘blacklist’!” >> Well, we already know the impact that EXXON taking up 6 exploration licences in Kurdistan (announced by the KRG in early November 2011) has had, plus the inference that GKP’s SHAIKAN oil field is very firmly on their watchlist. And now it seems that we have confirmation too that TOTAL have joined them there. Who can blame them? TOTAL have an 18.75% share in the Halfaya licence, which offers a paltry $1.40 per barrel for production, even less than the $1.90 per barrel that Exxon was getting at West Qurna-1! And what has always struck me as odd about those TSCs is that the payment was fixed throughout the life-time of the contract, even if oil goes to $200 per barrel - a seemingly miniscule return for the extreme risk of operating in Southern Iraq where ethnic tensions are high the Maliki regime has been becoming ever more authoritarian. Shahristani might be a very tough negotiator but there had to be some incentive to foreign oil companies, which the Maliki government's failure to agree a unified Oil and Gas Law more than a year after taking office has clearly negated. Assuming that Total’s entry into Kurdistan is soon confirmed, it seems obvious that what was just a single super-major choosing to break the stranglehold previously applied by Baghdad will soon become something of a stampede. It is interesting too that Ashti Hawrami (Kurdistan’s Natural Resources Minister) made these comments to the FT in an interview published on the KRG website on 22 November 2011 only 2 weeks after the Exxon news broke http://web.krg.org/articles/detail.asp?lngnr=12&smap=02010200&rnr=73&anr=42363 Extract: FT: Do you expect other super majors to follow EXXON into Kurdistan? Dr Hawrami: Yes. I think the region is becoming very dynamic, in fact, it has been dynamic over the last 12 months. There is a lot of activities going on, and you are aware of the acquisition of Genel Energy by Vallares. That’s just an example; I think there will be others to follow Hmmm.... Does ENI-one really think that the release of the news at this time (with the OGL continually having obstacles put in its path) is purely OCCIDENTAL? Or can we expect to see several more super-majors breaking rank in Southern Iraq and SHELL-ing out huge sums for prospects in the much more business-friendly environment of Kurdistan, I wonder? There is little doubt that confidence is building. And in the next few weeks, it looks very likely that long-term holders will be well rewarded, and their resolve to stick it out throughout the very testing Iraqi political impasse.... TOTAL-ly EXXON-erated! Yes, CJ, the 'landscape' is definitely changing! AIMHO and please DYOR GLA, scaramouche ==================== What exactly is a hostile bid??? -------- its when the company making the offer wear camouflage jungle warfare gear at their meetings, and pretend its normal behaviour. -------------- 02:14 Exxon still quiet but for how long? pathai 17 http://dinarvets.com/forums/index.php?/topic/103837-exxon-still-quiet-on-kurdish-deals/ Let's not forget the following taken from Iraq Oil Report 01 Feb 12: Some observers expected Exxon to go public with the Kurdistan deals in its quarterly Form 8-K legal filing with the U.S. Securities and Exchange Commission (SEC). On Tuesday, Exxon released that filing, which made no mention of Kurdistan. In a review of ExxonMobil's filings over previous years, Iraq Oil Report found that in the past, some developments related to the company's holdings and exploration activities were not listed in 8-Ks, which largely concern financial matters. Those unlisted items did appear in the company's annual 10-K, for which the SEC's disclosure requirements are far more exhaustive.  Exxon typically files its 10-K toward the end of February, and seems likely to acknowledge the Kurdistan deals then. If so, it will be a welcome admission for analysts and shareholders alike. ------------------- 01:12 Very important to TO valuation - 23rd Fe... minimini 19 Capital Markets Day Genel Energy plc will be hosting a Capital Markets Day presentation in London on the afternoon of Thursday 23 February 2012. Tony Hayward, Chief Executive Officer of Genel Energy will deliver a presentation on Group strategy and set out milestones for 2012. There will also be operational, pipeline and exploration updates following the first 90 days since the Genel Energy listing. -------------------------------------------------------------------------------------------------------------------------- The above is taken from Genel BB Some very important news expected that day. I would think TH will be saying to the world "look what we have found ..... Invest in us " I know most here know this presentation is happening and I know we all know how important this is to GKP valuation etc but I think we may be forgetting right now due to T/O rumours and pending SH4, SH5 and SH6 results just what kind of impact it could have on us and how important it is to any future T/O valuations put on GKP. My opinion is, our recent climb is being valued on 2 fronts right now. Shaikan (recent SH4 news and pending) and BB (eagerly awaited drilling results) We have gone up substantially over last month since Jan 9th. Genel have also too although not quite as much as GKP as a percentage. Our recent gain must also have had to factor the anticipated and imminent news waiting to be heard from Behr Bhar. What ever is said on Feb 23rd by Genel will have a huge impact on GKP share price and valuation but more importantly of a T/O valuation. This result alone will change all figures and new valuations/calculations will have to be taken into account for whoever will take us over. Very interesting and exciting times indeed. So to say our recent climb is nothing to do with BB as some have suggested doesn't work for me. If we hadn't found any oil right now and we were merely waiting on BB news then our share price would have risen in anticipation just like what Genel's has done. (20%) And we are still being massively undervalued on Shaikan with 100% upside to come too. The potential share price increase with great news from BB will be exceptional and we may end up seeing the eagerly added value regarding Shaikan as a result. A lot of questions may be answered on the 23rd Feb regarding the licences Genel / GKP hold in respect of our beliefs right now. If it is half as good as Shaikan then we would think we will then have 2 massive plays ongoing. 23rd of February - Remember that date. I'm not sure we will hear any news from Genel till then. Our price is being managed right now and hopefully we see a gradual increase up to 4 pounds in next week or 2. From then it wouldn't surprise me seeing it double in space of a week or 2 there after. We really are on the brink of massive increases. Happy times ahead. We aint seen nothing yet ! GLA minimini ========================= Exxon & Total deals with Kurds + impending Statoil withdrawal from Qurna = significant Big Oil rebuke to disorganised Baghdad oil ministry Total has signed a #PSA accord with the #Kurdistan Regional Government (#KRG) to develop four blocks, two of them ha... http://bit.ly/wm6cwu Total Signs PSA Accords With Iraqi Kurdistan Government By Editorial Staff 0 Published on Wednesday, 08 Feb 12:33 pm TEXT SIZE Total has signed a PSA accord with the Kurdistan Regional Government (KRG) to develop four blocks, two of them had previously been allocated to IOCs and since relinquished ( Canada’s Sham Aram Petroleum and Turkey’s Petoil). Total’s move follows ExxonMobil deal with the KRG. ================ Re: 3 quid.... TSC dickie3times a Jewish joke before bedtime (told to me by a Jewish tailor?) Maurice...asks his dad.... "Papa, I'm taking Rachael out for the first time, and i'm brassic, can you lend me 30 quid so i can give her a good time, pleeeease"? Papa...replies " THIRTY QUID" ? (loud) ........................"TWENTY FIVE POUNDS" ? (louder) ........................................................................."FIFTEEN NICKER" ? (shouting even louder) ....."Maurice, where on Earth are you going to get a TENNER to pay me back a FIVER ? A Jewish boy goes to his dad and asked him 5 franks pocket money. The father answers: - What?! 4 Franks?! What you gonna do with 3 Franks, nothing can bought by 2 Franks. look, take 1 frank and share it with your brother ================================= Author scaramouche View Profile Add to favourites Ignore Date posted Tuesday 20:33 Subject The fulfilment of Dreams... Votes for this Posting Voted 173 times. Message I have for some time been trying to get to grips with what the best solution might be for GKP to achieve maximum value for its shareholders, while recognising that, although Shaikan is only a few months away from being fully appraised, NONE of the other main assets in the GKP portfolio are anywhere near the same stage of development. Add to this the challenges of seemingly irreconcilable Iraqi politics; the KRG ‘s obvious desire to swiftly remove their dependence on Baghdad and get the oil flowing as quickly as possible; the USA’s probable expectation of 'preferred bidder' status for Shaikan, and the obvious unfairness should the Chinese be completely prevented from bidding for GKP’s assets... and what you have is undoubtedly an unholy mess! So, while I believe that TK may be doing his best to benefit all shareholders (no doubt as well as himself), it is becoming obvious to me that attempting to serve a number of different masters is probably well nigh impossible. Furthermore, all shareholders have varying holdings, varying personal and financial commitments, varying degrees of ‘investor fatigue’, and varying levels of resolve to see the story though to the bitter end... whenever that might be. Some it seems want the whole company sold now, some would like to see just Shaikan and Akri-Bijeel disappear in the relatively near future, and some of our younger holders or relative newbies have no specific requirements at all. The truth is that everyone is different, so how can any solution suit everyone? IMHO, the key has therefore to be a solution that is completely FLEXIBLE, and I have an idea which MIGHT be just that. Please think about this... When all Government rights, BIR’s etc have been assigned for SHAIKAN, the picture will be something like this: GKP (54.4%), MOL (12.8%), Company 'X' (32.8%) - and GKP holding the operatorship to Shaikan. So, suppose that GKP was to agree to sell HALF of its interests in Shaikan to Company X (let us assume it is Exxon) for say £5 BILLION in the next few months and they gave up operatorship of the field. Exxon would then have 60% of Shaikan, GKP 27.2%, and MOL still 12.8%. Exxon’s presence would totally de-risk the block (for all participants) and allow Shaikan to be developed rapidly to maybe one million barrels per day (satisfying the KRG). Exxon would be able to book about 2-3 BILLION OF RESERVES (satisfying Exxon and the USA) And GKP would have £5 billion cash PLUS a clear indication of the minimum value of their remaining 27.2% share in Shaikan. *** The market would probably re-rate GKP to somewhere near £10 a share, I imagine ***. Over the next few months, GKP could then enter the FTSE, Shaikan could be fully appraised and GKP could THEN sell its remaining interest in Shaikan to the Chinese for say £7 BILLION, adding at least a further £2 BILLION (£2 per share) to the market cap. The ‘market’ would also value GKP’s other assets in terms of how far they had been explored and appraised and the OIP numbers achieved at that time. In short, £12-15 per share would then be perfectly feasible. And what then? This is where it gets interesting IMHO.... Well, how about a merger with GENEL with ‘new’ shares issued based on the relative capitalisation of the two companies? THE EFFECT • GKP/GENEL would be the new kid on the FTSE100 block, and surely destined to become a major player. • GKP would add its 40% in Ber Bahr and 80% in Sheikh Adi to Genel’s 40% of Ber Bahr -giving 80% shares in one prospect believed to be 1.5 times the size of Shaikan and another reputed to be half Shaikan’s size) plus interests in several other prospects in Kurdistan. This would offer enormous upside potential and I am sure attract the interest of every self-respecting fund manager! • GKP/GENEL would already be a major oil producer too, as GENEL is currently responsible for much of the present production in Kurdistan. • There would be a very strong combined board of Directors including Tony Hayward (ex CEO of BP), with access to virtually unlimited funds via the Rothschild connection, and considerable technical expertise in both Production and Exploration. • And our own TK (Chairman) would be able to oversee the continued exploration and appraisal of 2 prospects which could ultimately dwarf even Shaikan.... surely the perfect sequel to the original Oilman’s dream. v.intr. To become stunted or grow smaller. *** And not least, we as shareholders would be able to sell our shareholdings AT ANY STAGE IN THE JOURNEY subject to our individual needs, risk tolerances and circumstances... and make the best of use of ISAs, CGT allowances all along the way ***. Yes, I am sure that most of us would happily take £20-25 per share from the Chinese if it was on the table right now. But, realistically, even in 3-4 months time, when T/O fever is likely to be at its height, I am not convinced that we will have that option. The unhappy mess that politicians of the world seem invariably to create makes that perhaps an unrealistic objective. So, a FLEXIBLE SOLUTION (perhaps along the lines of that described above) might be the best way to ensure that we have the opportunity of 'Fair Value' right now... AND the opportunity of fulfilling our ultimate dreams. AIMHO and please DYOR, GLA, scaramouche ============================= Author scaramouche View Profile Add to favourites Ignore Date posted Monday 14:34 Subject GKP - a Global Phenomenon Votes for this Posting Voted 145 times. Message Looking back, I see that the GKP SP first closed above £2 on 5 January 2012, above £2.50 on 11 January, and above £3 on 3 February. Having seen the price test 340p earlier today, it is very apparent that people are now looking at when we will see £3.50 and beyond. I would be surprised if we have very long to wait! Whether the rise is based on institutional accumulation ahead of a likely FTSE listing; a general re-rating based on a better understanding of the value of GKP’s assets; rumours of a possible initial bid for Shaikan or the whole company; or continued political de-risking due to the arrival of first Exxon (and now Total) in Kurdistan... is very far from certain. But what is IMHO absolutely certain is that GKP has now broken through into the Big League.... and become a truly Global Phenomenon. In March 2009, this was a company with a Market cap of just £25 million. Today, at 324p, it has a market cap of around £2.75 BILLION, around 110 times higher. And since, in December 2011, Mark Leftly of the Independent on Sunday first highlighted the strong possibility of a £7 BILLION bid from Exxon, while stating also that TK reputedly believes the company to be worth “double-figure billions”, there has been little doubt in my mind that that a valuation of £10 BILLION is perfectly reasonable... and £20 BILLION (in a matter of just a few short months) certainly not entirely out of the question. To understand the truly 'global' phenomenon that GKP has become, you need only to take a look at Spidy’s GKP NAV calculator http://www.navcalculator.com/GKP_NAV.php , which has now been visited by people from no less than 156 different countries (with Papua New Guinea on 2 February 2012 being the latest addition). Since those halcyon days of 2009, the small pony that GKP used to be has clearly grown up into a wonder-horse, a Champion thoroughbred.... and one now tipped to be ready to go for the ultimate Prize. But while those thundering hooves now seem to be covering the ground at breakneck speed it is well worth remembering how easy it can be to unseat its rider - I have to admit that I will now be hanging on to the reins tighter than ever before! Yes, if GKP perhaps struggled to achieve positive media attention in the press throughout 2010 and the bulk of 2011, it does now seem that, with the exception of the Alphaville comic, most of the mainstream media are at last beginning to recognise the truly Global importance of the oil discovery that GKP has made in Kurdistan. Today, it looks as though we will see about 20 million shares changing hands at around the 325p mark (a total value of around £65 million), an astonishing figure and one that would put it squarely amongst many of the FTSE100 stalwarts. And speaking of the FTSE, by market cap our company has now sneaked into the lower reaches of the FTSE100 http://www.stockchallenge.co.uk/ftse.php This is simply staggering for a company that is still on AIM. So, is it any wonder then that GKP itself now seems to be talking ever more confidently about joining the FTSE shortly? To me, it is very apparent how far this company has come in such a short space of time – but it is equally apparent that it is perfectly positioned to go considerably further... IF we all do our best to give it that chance! We are eagerly waiting for SH-4 results (imminent) which could result in a massive increase in those OIP numbers and potential production figures. SH-5 and SH-6 could further enhance the OIP and deliver us news of the elusive OWC and ‘full to spill’ scenario. And later this month Ber Bahr-1 should give us some idea of what an exciting prospect that is too, and the possibility of connectivity between Shaikan, SheikhAdi and Ber Bahr. It all adds up - and IMHO the next few months will be the most important of all in the whole of GKP's chequered history. So, my key message today is to keep one eye firmly on what is just around the corner, which could (only 3-4 months from now) take those OIP figures somewhere into the upper stratosphere... and the Market valuation up there with it. And if by some chance, Exxon or another super-major comes knocking with an early offer that fails to adequately recognise that potential, my suggestion is simply to remember that well-known negotiating maxim – “NEVER ACCEPT the very FIRST OFFER” .... unless, of course, it is one that you quite literally CANNOT refuse! With a PRIZE as great as GKP, IMHO you can be almost 100% sure that very soon there will be a number of other super-majors beating on the door! They can beat as hard as they like as far as I am concerned - as Todd is claimed to have said - I want "AT LEAST double-figure billions". AIMHO and please DYOR GLA, scaramouche ================================== Author scaramouche View Profile Add to favourites Ignore Date posted Thursday 18:27 Subject NOT Going for a song.... Votes for this Posting Voted 280 times. Message I always like to hear what JG has to say, because he comes across as cautiously optimistic... and not a man who is likely to let the story get ahead of itself. He has told us many times that he thinks a recovery rate of 30-35% is reasonable, and he continues to report upgraded OIP figures much in line with those forecast. In essence, he never seems to say anything other than what he can subsequently prove. So, it is worth reminding ourselves that he recently mentioned that Akri-Bijeel should command a price tag of between $350 and $500 million, despite the disappointment of Bekhme. GKP’s 12.8% Net WI in AB currently amounts to 2.4 billion x 0.33 x 12.8% = 100 MILLION barrels of estimated reserves. So, that suggested that JG was expecting between $3.50 and $5 per barrel based on the results to date. According to HamishNY’s notes from the presentation yesterday, JG also said “what they do know of Shaikan so far is worth about double the current share price....” So, what do they KNOW so far? Latest OIP figures 10.5 billion (P50), JG assumes one-third recoverable, and there is a Net WI 54.4% (after Texas Keystone’s current interest is applied). 10.5 billion x 33%RF x 0.544 = 1900 MILLION barrels of estimated reserves. Furthermore, GKP’s share price yesterday when he gave his presentation was 279p and gave us a market cap of about £2.4 billion. So, if we were then about half of what JG thinks Shaikan is currently worth, he must see Shaikan as presently worth around £4.8 billion (or $7.6 billion). And $7.6 billion for 1900 million barrels = $4 PER BARREL, very much in the same ball park as his mid-point estimate for a barrel of AB reserves. It seems to me then that this is the second indication of how JG appears CAUTIOUSLY to consider what a buyer would pay for GKP’s oil. But what else does JG say about Shaikan? He estimates that it will hold 18 BILLION barrels OIP (Note: that is still quite CAUTIOUS compared to TK’s forecast the other day of a 100% upside from where we are now). *** On the same basis as the figures above, JG's estimate would mean about 3.2 BILLION barrels of reserves attributable to GKP from Shaikan alone ***. Think about this... 3.2 billion x JG’s very cautious $3.5 per barrel = $11.2 billion = £7 BILLION And 3.2 billion x JG’s more optimistic $5 per barrel = $16 billion or £10 BILLION. Now where have I heard those figures before? Oh yes... http://www.independent.co.uk/news/business/news/exxon-woos-gkp-to-gain-kurdish-base-6278531.html Extract: < US oil supermajor Exxon Mobil is understood to have sounded out London-listed Gulf Keystone Petroleum (GKP) over a possible deal that could value the Kurdistan-focused group at around £7bn. GKP has a market capitalisation of around £1.5bn and is listed on the junior Aim market, but its chief executive, Todd Kozel, believes the group could eventually go for double-figure billions.> But, of course GKP then famously denied that there were any talks regarding the sale of the COMPANY.... leaving the door wide open for the fact that there might still have been talks about the sale of SHAIKAN. Hmmm... hasn't GKP’s very own Chief Operating Officer (JG) just told us that he believes that SHAIKAN alone should soon command a price tag of about £10 BILLION under a competitive bidding process? Let us also remind ourselves of what HamishNY stated this morning in his notes on JG’s presentation about the rest of the company. “More on figures. BB - 5bn to 10bn expected, SA - 3bn to 6bn, SH 18bn, AB - MID 20s. (yes, big number). Said if they don't get good price for AB share (process to start this week) then they would hang on as could be v profitable.” On the same basis as above, this would mean... 1. AKRI-BIJEEL (mean figure of 25 billion barrels OIP) 25 billion x 33% RF x 12.8% Net WI = 1 BILLION barrels of estimated reserves 2. SHEIKH ADI (mean figure of 4.5 billion barrels OIP) 4.5 billion x 33% RF x 80% Net WI = 1.2 BILLION barrels of estimated reserves. 3. BER BAHR (mean figure of 7.5 billion barrels OIP) 7.5 billion x 33% RF x 40% Net WI = 1 BILLION barrels of estimated reserves. And when you add all that lot up, intriguingly you get.... 3.2 BILLION reserves... exactly the same figure as 18bn OIP would give for GKP’s attributable reserves at Shaikan. In conclusion, I think that JG has just told us in his own cautious manner that he believes Shaikan commands a realistic price tag of £10 BILLION for a super-major.... AND that much the same value can be attributed to the rest of the company. Hmmmm.... £20 BILLION for GKP anyone (based on just $5 per barrel).... or maybe our friends from China might like to offer us a little bit more!!! For any of those of a certain vintage, JG has IMO just told us all that GKP will certainly NOT be ‘Going for a Song’. AIMHO and please DYOR. GLA, scaramouche ====================================================================