Rumours of Potential Gulf Keystone Buyout Hit BBs

PUBLISHED: Nov 11 2011 @ 10:41 | Comments (0) |

Gulf Keystone Petroleum (LSE:GKP) shares were up 15% by mid-morning on Friday following news that Exxon Mobil has signed contracts with Kurdistan to explore the region for oil in northern Iraq.

GKP investors took to the bulletin boards on ADVFN with speculation over a possible Exxon takeover of the independent oil & gas company.

Exxon Signs Deal With Kurdistan

According to an advisor for the Kurdistan Regional Government, Exxon Mobil has signed contracts to explore for oil and gas in the region.

“The KRG has for the last few months been in discussions with a number of major oil companies. This resulted in the recent signing by Exxon Mobil of contracts to explore in six blocks,” said KRG advisor Michael Howard.

Conflicts over Kurdistan Deal

Until now, major oil companies have stayed away from Kurdistan due to the political conflicts between the KRG and ICG. Exxon Mobil entered the West Qurna field in southern Iraq in 2009 with Royal Dutch Shell. This field is currently producing 350,000 bpd with an estimated production plateau of 2.825 billion bpd within the next six or seven years.

Baghdad and the KRG have long-standing disagreements over the rights to oil fields in the northern region and the Iraq Central Government deems contracts between oil companies and Kurdistan to be illegal. Representatives from Baghdad have also previously stated that if Exxon were to enter into agreements with Kurdistan, their contract for operations in the West Qurna field may be terminated.

Neither the Iraq Central Government or Exxon Mobil has commented on the situation.

Gulf Keystone Gains

Many independent oil and gas companies, including US-based Marathon Oil and Hess, have gone to the area in recent years, attracted by the untapped oil resources, estimated to total as much as 45 billion barrels of oil and 200,000 billion cubic feet of gas. Gulf Keystone is among these companies and their position has many ADVFN users talking about a possible takeover by Exxon Mobil.

One ADVFN user, johnbuy, wrote, “Thats it guys and girls. Contracts are legal imo… A takeover is coming here,” while another user, fairenough11 claimed, “New highs coming in the next few days…shackles well and truly off.”

GKP Company Spotlight

Gulf Keystone Petroleum Limited is registered in Bermuda and listed on the AIM, with operations in the Kurdistan region of Iraq. The company’s wholly owned subsidiary, Gulf Keystone Petroleum International, holds Production Sharing Contracts for four exploration blocks in the region. The four blocks where they hold PSCs are the Shaikan, Akri-Bijeel, Sheikh Adi, and Ber Bahr blocks.

References
↑ About Gulf Keystone
↑ Exxon signs Kurd deals, Baghdad warns
↑ ADVFN BB

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