Gulf Keystone Petroleum Ltd. (AIM: GKP) – Looking for a Quick Gain ?

by Michael on August 9, 2011

For those investors (I nearly said ‘traders’) thinking that the current general fall in the stock market indices are just a correction (as opposed to a crash), it is probably about now that they have that tingling feeling in their toes that tell them we are now at the “bottom”.

If so, you do not have to look much further than Gulf Keystone Petroleum as a share with the good potential to get a quick 30-40% return or even more for those choosing to position for a long-term investment.

Gulf Keystone Petroleum (LON:GKP) is an oil and gas exploration and production company with interests in North Africa and theMiddle East. Gulf Keystone Petroleum International (GKPI), a wholly-owned subsidiary of Gulf Keystone Petroleum Limited, holds Production Sharing Contracts (PSCs) for four exploration blocks in the Kurdistan Region of Iraq.  In November 2007, the Company secured interests in the PSCs for the Shaikan and Akri-Bijeel blocks. In July 2009, the Company increased its significant acreage in the region with the addition of the PSCs for the Sheikh Adi and Ber Bahr blocks. Gulf Keystone is the Operator of the PSCs for the Shaikan and Sheikh Adi blocks

With increasing number of buys and volume picking up, it looks like the price is breaking out to the upside. Currently we are at 106 pence having risen 5% so far today. Let us recall that this share was at £1.40 on August 1st 2011 one week ago.

On August 4th 2011, GKP gave a reassuring Share Price Update as follows:

Gulf Keystone notes the sudden fall in its share price and confirms that it knows of no reason for this decline, beyond today’s general market turmoil.

 The Company remains completely focused on the active exploration and appraisal programme across all the four blocks in the Kurdistan Region of Iraq, including the current drilling operations at the Shaikan-2, Shaikan-4, Sheikh Adi-1 and Bekhme-1 wells.

 The Company is expecting to commence oil exports at an initial stabilised rate of 5,000 barrels of oil per day (“bopd”) in the coming months increasing this target to 10,000 bopd shortly thereafter.

 Gulf Keystone will be providing further operational updates in due course and will report half year results in September 2011.

GKP we have to remember is operating in an area with considerable political risk and oil price is always subject to the vagaries of the economy, however to me GKP strengths far outweigh its weakness and in my opinion it is worth backing (as I have). GKP in their own words had found one of the most significant discoveries in the area and hold one of the best pre-drilling upside in its acreage. Also, I understand that they want to come onto the main market from the AIM which could result in another boost for its share price.

Company highlights include:

–         Four production sharing contracts

–         Two exploration wells drilled two discoveries (Shaikan and Akri-Bijeel)

–         Independent report give Shaikan gross oil  in place of 4.9 to 7.5 to 10.8 billion bbls (P90 to P50 to P10)

–         Akri-Bijeel block estimates of 2.4 billion bbls

–         Solid balance sheet

–         Large work programme,

–         Export market target of 5000 + bopd, increasing to 10000+ bopd by end of 2011

It is a BUY for me !


Hichem TRABELSI August 9, 2011 at 2:33 pm

Thank you for the tip.

Michael August 9, 2011 at 6:43 pm

Well basically I was just putting pen to paper of some of the research I have done in order to decide whether I should invest or not. I think writing down some of the reasons helps with investment decisions. And I thought I would share. You should never take these comments as a ‘tip’ on face value. Always do your own research and read around the subject to get various opinions from various souces. You can then make your own informed decision. Good luck with whatever you decide.

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