Fox-Davies Capital Update featuring Gulf Keystone, Ascent Resources, Global Energy Development and Platinum Australia

Wednesday, Mar 10 2010 by

Fox Davies Capital Update featuringOil & Gas News

Gulf Keystone Petroleum (BUY, £2.00) (LON:GKP, 93.75p, ? (9.33%)) has negotiated with the Kurdistan Regional Government (KRG) to reorganise the Company's interest in Gulf Keystone Petroleum International (GKPI) following a material default by ETAMIC. Under the agreement the 50% shareholding of GKPI held by ETAMIC reverts to GKP. GKPI will then be a 100% subsidiary of GKP. GKPI will pay $40m to the KRG which is an Infrastructure Support Payment due and owing by ETAMIC, in return for GKPI maintaining its 80% interest in Sheikh Adi and 40% interest in Ber Bahr. Gulf Keystone will make a termination payment of $12m to ETAMIC in full and final settlement of all of their rights. The KRG shall also be entitled to receive an Additional Infrastructure Support Payment to be allocated to social programs, amounting to 40% of GKPI's entitlement to Profit Petroleum derived from GKPI's share of profits in all four production sharing contracts.
 
Gulf Keystone Petroleum (BUY, £2.00) (GKP, 93.75p, ? (9.33%)) also announced that Kalegran Ltd., a 100% subsidiary of MOL Hungarian Oil and Gas Plc. and the operator of the Akri Bijeel block in Kurdistan, concluded a successful oil test in the Bijeel-1 exploration well in the Akri Bijeel block. The tested zone is in the upper Jurassic and flowed at rates of up to 3,200 bopd with associated gas rates of 933,000scf/d. Oil gravity was 18oAPI and flowing wellhead pressure was 420 psi on a 48/64" choke. Drilling operations are still in line with previously announced plans, following completion of the full test cycle, drilling will resume from the current depth of 3831m to a final planned depth of approximately 4400m, pending actual well results.
 
Comment: The first announcement is a positive development for Gulf Keystone with a net value benefit that we estimate to be about US$225m. Another positive is that it removes Etamic, an unknown quantity, as a joint venture partner. Offsetting those positives is the requirement for additional funding to cover projects costs, those costs are fully recoverable once production starts under PSC terms but will necessitate a higher capital increase than initially anticipated. The second announcement is great news, despite the small fully diluted interest for the Company in the licence, as it de-risks the two other nearby licences of Sheikh Adi and…

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Gulf Keystone Petroleum Limited (Gulf Keystone) is a holding company, which is engaged in the oil and gas exploration and production. The Company operates in the Kurdistan Region of Iraq. It operates through segments, including Kurdistan Region of Iraq and United Kingdom. The Kurdistan Region of Iraq segment consists of the Shaikan, Ber Bahr blocks and the Erbil office, which provides support to the operations in Kurdistan. The United Kingdom segment provides geological, geophysical, engineering and corporate services to the Company. It operates in the Shaikan oil field. The Shaikan block is situated over 85 kilometers northwest of Erbil, covering an area of over 280 square kilometers. more »

LSE Price
254p
Change
3.3%
Mkt Cap (£m)
555.4
P/E (fwd)
7.5
Yield (fwd)
5.2

Nautilus Marine Services PLC, formerly Global Energy Development PLC, focuses on offshore subsea sector in the Gulf of Mexico through investment, consolidation and technology opportunities. The Company focuses on acquiring three offshore subsea service vessels, and a barge vessel along with eight offshore subsea service vessels and subsea equipment. The Company focuses on providing subsea oil services through the use of the vessels. The Company owns subsea equipment, a barge vessel, dynamic-positioning (DP), four-point dive support, and utility vessels located near the Gulf of Mexico. The Company holds two contract areas in the Middle Magdalena region of Colombia: the Bolivar Association Contract and the Bocachico Association Contract. In addition, the Company focuses on providing various services, including platform and pipeline inspections, underwater welding and burning and other underwater oil support services. more »

LSE Price
0.75p
Change
-6.3%
Mkt Cap (£m)
0.4
P/E (fwd)
n/a
Yield (fwd)
n/a

Ascent Resources plc is an independent oil and gas exploration and production (E&P) company. The Company's portfolio consists of European onshore projects. The Company operates through two segments: Slovenia and UK. The Slovenia segment is engaged in exploration and development work. The UK segment includes head office. It operates the Petisovci tight gas project in Slovenia. The Company's project is operated through a local entity in a joint venture. The Petisovci Tight Gas Project is located in an area covering approximately 100 square kilometers in north eastern Slovenia. The Petisovci Tight Gas Project targets the development of tight gas reservoirs, which include Miocene clastic sediments. The structure has over two sets of reservoirs, the shallower Upper Miocene and the deeper Middle Miocene. It is focused on the development of the Middle Miocene Badenian reservoirs. Its subsidiaries include Ascent Slovenia Limited, Ascent Resources doo and Ascent Resources Netherlands BV. more »

LSE Price
0.225p
Change
 
Mkt Cap (£m)
5.9
P/E (fwd)
2.1
Yield (fwd)
n/a



  Is LON:GKP fundamentally strong or weak? Find out More »


3 Comments on this Article show/hide all

doverbeach 10th Mar '10 1 of 3
3

I cant resist posting FTAlphaville's comments on Fox Davis's comments - can't link as they were from the news wrap:

"NH all of this incredibly badly handled and opaque
NH still we can all look forward to the significant fund raising mentioned in the statement
NH and the accompaning prospectus
NH that hopefully might shed some more light
NH on what exactly is what here

BE Some light would be nice.
BE But, in the meantime, we have Fox Davies.

NH excellent
NH this should be fun

[extensive quotes from the Fox Davis note above]

NH that’s very funny. made us all laugh here"

:)

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nigelpm 10th Mar '10 2 of 3
4

Pathetic if you ask me. The guys at FT Alphaville write unadulterated nonsense 95% of the time. The rest of the time it's complete unadulterated nonsense.

Read their comments at your peril or amusement

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JPGH 11th Mar '10 3 of 3
1

FT Alphaville is the investing equivalent of my favourite chums Beavis and Butthead

JPGH

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