Gulf Keystone Shares Soar On Renewed Deal Speculation
January 10 2012 - 11:32AM
Dow Jones News
Shares in oil exploration firm Gulf Keystone Petroleum PLC
(GKP.LN) soared Tuesday afternoon after a press statement about
third-party development licenses stoked renewed speculation that
oil supermajor Exxon Mobil Corp. (XOM) may be interested in buying
the company or becoming involved with its oil field
development.
At 1546 GMT shares in the company, listed on London's junior AIM
market, were up by just over 22% at 270 pence, having earlier
traded up by as much as 25% in London.
The latest round of speculation followed a statement Tuesday in
which Gulf Keystone reaffirmed that the government of Iraq's
semi-autonomous Kurdish region has the right to acquire a portion
of its Shaikan and Akri-Bijeel oil fields, or nominate a third
party to acquire an interest in them.
"After the government of the Kurdistan region of Iraq has
exercised its third party assignment option...Gulf Keystone will
issue an appropriate announcement," the statement said.
A spokesman for the company declined to comment on the sudden
spike in the company's shares.
Shares in Gulf Keystone have risen by as much as 90% in the past
three months and has been the repeated subject of takeover rumors
after Exxon Mobil became the first major Western oil company to
enter Kurdistan.
Gulf Keystone operates the huge Shaikan oil field, which is
estimated to contain billions of barrels of oil, but will require a
large investment to commercialize. Many industry analysts expect a
large company, such as Exxon Mobil, to eventually acquire Gulf
Keystone in order to fund this large development.
The company itself has acknowledged this is likely. "If the big
boys come in and all [oil license] blocks were taken, they're going
to buy stuff," John Gerstenlauer, chief operating officer for Gulf
Keystone said in November. "There's a good chance we'll get
bought," he said.
In December Gulf Keystone was forced to issue a statement
denying that it was close to being acquired by the oil giant. A
report in the Independent on Sunday claimed that Exxon Mobil had
"sounded out" Gulf Keystone and was close to offering 800 pence per
share for the company, valuing it at GBP7 billion. The report said
rival oil majors including China's Sinopec and California-based
Chevron Corp. (CVX) were also "monitoring the situation."
Gulf Keystone said at the time it was "not in discussions with
regard to a sale of the company.
-By Jessica Hodgson and James Herron, Dow Jones Newswires; +44
207 842 9373; jessica.hodgson@dowjones.com;
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