gas explorer Gulf Keystone Petroleum Ltd is considering legal action to protect the company from rumours on the Internet, the latest resources firm to fire a warning shot at online gossips.
The Kurdistan-focused driller, a favourite of retail investors, on Thursday denied rumours on bulletin boards and social media sites that it was planning to raise money.
The rebuttal was a factor behind a 14 percent jump in the company's share price, which has been volatile in recent months.
'We will not tolerate malicious attempts to damage the company's reputation and share price. We have instructed the company's lawyers to use all means necessary to protect our shareholders from this malicious and unfounded attack,' Chief Executive Todd Kozel said in a statement.
Small-cap oil explorers Nighthawk Energy, Nostra Terra and others also threatened legal action after finding themselves the target of abusive comments on bulletin boards in 2010.
However, successful litigation is hard to achieve. Companies may need a court order to force message board owners to reveal writers' identities, and some people use multiple aliases, making identifying them difficult and expensive.
Regulators say internet-based market manipulation is difficult to prosecute, as making a direct link between share price moves and online chatter is hard.
'Today's announcement has been a long time coming as the share price has been negatively impacted by bulletin board speculation several times already this year,' said analysts at Seymour Pierce.
Gulf Keystone has been one of the most popular topics on the message boards of British retail investor websites such as Interactive Investor and ADVFN, and is often the subject of feverish speculation about its drilling in Iraq's Kurdistan region and possible takeover bids.
Its volatile and heavy share trade has seen the stock rise from 134 pence in October, to hit 440 pence in February, before dropping back to close on Wednesday at 188 pence.
A Gulf Keystone spokesman said the speculation that had prompted its rebuttal appeared to relate to one individual and a specific incident, rather than general discussions about the company. He declined to name the websites where the comments were made.
Gulf Keystone, which holds production-sharing contracts for four exploration blocks in Kurdistan, also said on Thursday that it continued to talk to several interested bidders for the sale of its 20 percent stake in the Akri-Bijeel block.
Seymour Pierce said it valued the asset at around $200 million, but that this could rise given appetite for investing in the region, and that such a level of cash injection would negate the need for an equity fundraising in the short term.
(Additional reporting by Karen Rebelo in Bangalore; Editing by Erica Billingham) Keywords: GULFKEYSTONE/
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