Gulf Keystone Petroleum (LON:GKP) (Buy, 200p) (GKP.LN, 81.5p, ? (2.9%)) The Kurdistan government natural resources minister, Ashti Hawrami, was quoted in the press saying that oil exports from Kurdistan would resume in two days, after participating in the Economic Forum between Kurdistan and the United Arabic Emirates in the capital of Kurdistan, Erbil on Wednesday. It is reported that on Tuesday, the Iraqi government accepted a deal to allow the resume of exporting Kurdish oil whereby Baghdad should pay all the costs of the companies.

Comment: This follows a preliminary agreement between the KRG and Baghdad that we reported on May 7th regarding the costs oil portion of the revenue entitlement to producing oil companies. We believed this was a step in the right direction and the news today seems to indicate that a final agreement has been reached. As a reminder the exports were halted in October 2009, after the Iraqi government refused to pay the companies responsible for the extraction and exporting the oil. If exports are resumed this is a major news for all companies involved in Kurdistan and for the currently producing ones in particular. Any such agreement between the KRG and Baghdad, if confirmed, also paves the way for companies that are involved in the South of Iraq to be free to have operations in Kurdistan. We believe the previous ban by Baghdad was a major impediment for bigger companies to enter Kurdistan. The only way to do so now for them is by acquiring assets in Kurdistan which will lead to a dramatic increase in asset prices and consolidation. We believe that companies active in the northern half of Kurdistan such as Gulf Keystone and Heritage have the best assets, i.e. better geology, more oil prone, and could be involved earlier in any M&A activities versus their southern peers.

Providence Resources (LON:PVR) (PVR.LN, 2.93p, ? (0.0%)) has resumed oil production from its Ship Shoal 253 field, following completion of hurricane-related repairs to the production facility. The Company also confirms that a well recompletion programme for 2010 has been agreed on a number of producing assets which is designed to boost daily production rates. Providence also continues to review a number of drilling opportunities across the region. Also the Company continues to evaluate potential development drilling opportunities within the Company's US asset portfolio, and is currently working to advance…

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