Commercial Production Starts In Gulf Keystone Petroleum Limited’s Shaikan Block

Gulf Keystone Petroleum Limited (LON:GKP) set to move from AIM to the Main Market by end of year.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The share price of Gulf Keystone Petroleum (LSE: GKP) — an oil &  gas exploration and production company with operations in the troubled Kurdistan Region of Iraq — is currently over 2% down, following the release the company’s half-year report to 30 June 2013 this morning. The report also included post-period news.

The company recorded a loss after tax of $26.4 million, which is an improvement on 2012’s loss of $31.4 million.  That’s a loss per share of $0.03, versus $0.04 in 2012.

The main news was the commencement of commercial production from the Shaikan block, with 12,400 barrels of oil per day (bopd) being achieved by early September. The company already has one production facility — Shaikan PF-1 — which was fully commissioned in July, and construction of a second Shaikan production facility is ongoing, with production operations expected by the end of 2013

The half-year report also recorded the decision in the company’s long-running court battle with former partner Excalibur Ventures, with all the claims against Gulf Keystone being dismissed.  The decision in its favour opens the way to Gulf Keystone moving from AIM to the Main Market of the London Stock Exchange, with a listing expected by the end of 2013.

Commenting on the results, CEO Ted F Kozel said:

As a result of having the Shaikan FDP approved, and in line with the Kurdistan Regional Government’s stated production targets for the Shaikan discovery, we are delighted to have entered the first phase of commercial production, which was eagerly awaited by the Company’s shareholders.  It is an important milestone and another highlight of the four years of hard work since striking oil in August 2009.  

“With the protracted Excalibur litigation behind us and the key uncertainty about the Company’s future removed, we are working hard to deliver on all of our stated objectives and are very pleased to have appointed Deutsche Bank to advise the Company on achieving our goal to move to the Main Market by the end of 2013.

At the time of writing Gulf Keystone’s share price is 212.6p. That’s over 20% up so far in 2013 — beating the FTSE 100’s 12.7% over the same period — but 13.5% down on this time last year — since when the FTSE 100 has risen 13%. That said, longer-term shareholders won’t have any cause for complaint, having enjoyed a return of 900% over the past five years.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

> Jon doesn't own shares in Gulf Keystone Petroleum.

More on Company Comment

Hand of person putting wood cube block with word VALUE on wooden table
Company Comment

Value has been building behind the Diageo share price

Despite the business growing, the Diageo share price first reached its current level just over 19 months ago and hasn't…

Read more »

Older couple walking in park
Investing Articles

5 stocks to buy for high and rising dividend income

I can see a host of shares to buy on the FTSE 100 offering me exceptional levels of income. Here…

Read more »

Young mixed-race woman looking out of the window with a look of consternation on her face
Investing Articles

I don’t care if FTSE 100 shares fall further, I’m buying them today

I'm happy to go shopping for FTSE 100 shares today, even though I accept that they could have further to…

Read more »

Happy young female stock-picker in a cafe
Investing Articles

Rolls-Royce shares are down 18% in a month and I’m finally going to buy them

Investors who bought Rolls-Royce shares have been repeatedly disappointed, but I'm willing to take a chance on them before they…

Read more »

Storytelling image of a multiethnic senior couple in love - Elderly married couple dating outdoors, love emotions and feelings
Investing Articles

How I’d invest £10k in a Stocks and Shares ISA today

Now looks like a good time to buy cheap FTSE 100 shares inside a Stocks and Shares ISA. These are…

Read more »

Black father holding daughter in a field of cows
Investing Articles

Today’s financial crisis is the perfect moment to buy cheap shares

I'm building a portfolio of FTSE 100 stocks by purchasing cheap shares whenever I see an opportunity. There's a good…

Read more »

Long-term vs short-term investing concept on a staircase
Investing Articles

I’d buy Tesco shares in October to bag their 5.4% yield 

Tesco shares have fallen lately but I think this makes them attractively valued for a dividend stock I would aim…

Read more »

Young mixed-race woman looking out of the window with a look of consternation on her face
Investing Articles

I would do anything to hold Diageo in my portfolio (but I won’t do that)

Diageo is one of my favourite stocks on the entire FTSE 100 and I'd love to hold it, but one…

Read more »