There’s a buzz around Gulf Keystone at present as the stock continues to perform well in 2013. A sense of déjà vu may be forgiven by some as it was January last year that GKP rose from the 190p range to helium balloon heights of 460p in just a few weeks. At the time – takeover rumours were afoot backed up by the Independent’s deputy (now associate) biz editor Mark Leftly. £8 was the figure mentioned. Whilst the rest is history, at the time, Leftly clearly believed his sources were firm/solid to take the risk of placing his reputation on the line.
As many in business know – deals are not done until they are signed and often that can take place minutes before the deadline expires. Were the rumours true and was the deal simply ended by one party? Who knows?
But what we know today as opposed to 12 months ago is very telling. For starters – GKP have updated Shaikan’s OIP via wells 4, 5 and 6. Production facilities have been enhanced. Other licence blocks drilled too. Any buyer making a bid today will certainly find the due diligence process and data much easier to conduct as the evidence is that much clearer a year on.
Furthermore, 12 months ago GKP were a year away from FDP submission. In fact – the declaration of commerciality on Shaikan only occurred in August of last year. Today, GKP are just 2 weeks away from the FDP submission deadline. MOL are just a couple of weeks from revealing the data and news on their extensive campaign on AB (GKP 20% interest). More super majors have entered the region including the french and russians.
In a nut shell – 12 months on and GKP looks in much better shape than they did back in Jan 2012. The uncertainty over the court case still looms to some extent but the spectators would have seen enough of the case by now to have a good idea of where it might be heading.
If any buyer was worried about the litigation in Jan 2012, they certainly won’t be as unsure right now. The picture is a lot clearer.
This time last year – GKP was 260p. Today it is 226p.
Quite remarkable really when you take into consideration the progress the company has made in the last year.
Perhaps the next rumour on buyers or takeovers might be more acceptable now. The odds seem to increase with every day.
Keep your eyes peeled for an ops update soon as the last one was a very long time ago (pre court case). Investors will want to know what’s happening with SA and BB blocks in 2013 as there’s more to GKP than just Shaikan.