I wonder if your figures apply to Genel ? They seem to be doing pretty well.you may be right I sold about 9 months ago at 2.70 but am considering buying back . You have rather put me off. It's the political situation that worries me most and of course the CC which I do think could be a major issue. Anyway good post probably if your figures are correct.
AIM listed Gulf Keystone Petroleum (GKP) is the darling of many private investors in the UK and further afield. Todd Kozel the colourful CEO and Chairman of Gulf is one of, it not the highest paid bosses on AIM. But does this whole enterprise stack up? Look beyond the headline numbers. The most widely accepted fact about Gulf is that it owns vast amounts of crude oil located in the autonomous Kurdish region of Northern Iraq. The jewel in the crown of Gulf’s portfolio is the Shaikan reservoir. Gulf’s own figures for Shaikan have grown dramatically since it was discovered in 2009. 10/2009 7/7/2010 14/9/2011 28/5/2012 12/9/2012 P10 5.2bn 7.4bn 10.8bn 13.4bn 15.0bn P90 956m 1.9bn 4.9bn 8.0bn 12.4bn
Currently Gulf states that the Shaikan field has a 10% chance of containing 15.0 billion barrels of oil. The uncertainty of the estimates is reduced as P10 and P90 converge.
So the Shaikan field has a high ‘Oil in Place’ figure, which is something that Gulf has done a fantastic job of broadcasting loud and clear. However you do not need to scratch very deep before the reality of this particular asset begins to emerge.
Let’s begin with the Oil in Place figure, for the sake of a fair and unbiased analysis I will take the latest P10 figure (the most bullish data there is), and use this to estimate the value of Shaikan to Gulf, or anyone for that matter.
The average recovery factor for Iraq is 28%, historically John Gerstenlauer has used a figure of 30% or 1/3rd, but recently Gulf has stated that it will be using 20% as a starting point when considering recovery factors. So for the sake of a fair and unbiased analysis I will take Gerstenlauers figure of 1/3rd (the most bullish data there is). I am generous.
This means that… of the 15 billion barrels of ‘Oil in Place’ in Shaikan 33% is recoverable, which gives us a recoverable volume of 5 billion barrels.
It is widely assumed that Gulf owns 75% or 51% of this oil, however in Kurdistan the oilfields are operated under a production sharing contract and these can vary from asset to asset.
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