Member Info for Victor384

Lets assume that NOTHING was given for any future upside at Shaikan but GKP got $6.16 for 272 m entitlement barrels made up from 81.5 mbo of 2P reserves already attributed to GKP by ERC added to the rest – 190.5 mbo currently classified in the CPR as contingent resources but with the potential after an increased drilling campaign of becoming 2P reserves. ERC make the point that they expect this translation to happen.

In this scenario all of these barrels are paid at $6.16.

To compensate for the difference in the current classification made in the CPR report between 2P and 2C…..

any exploration upside from SH7…..

any increased reserve numbers from the hanging and foot wall in the NW corner of Shaikan, …..

any upside from the 3.3 billion barrels not included in the report from the cretaceous, …..

the likely increases in the RF over time achieved by moving the Recovery Factor detailed in the report north from a lowly 12% towards a 20% + figure….

ALL of the 537 BCF of gas….

50% of the BIR….

the likely upgrading of the reserve numbers as the fracture system is understood ……

All these positives are included in the already predicted and signalled transfer of 191 mbo 2C Contingent resources (50% of GKPs allocation) into 2P reserves deemed as only needing an expanded drilling program to become a reality. In other words classifying 272m barrels as 2P reserves at $6.16 per barrel would pay for the considerable upside not dealt with in the CPR report.

This expanded production triggering the transfer of 2C Contingent resources to reserves would be accelerated as direct consequence of a Major taking over as Operator.

(Figs from Page 4 of the CPR presentation)

This adds up to $1.675m for GKPs 27%.

So nothing for 3P reserves, nothing for any future upside at Shaikan (SH7 etc).

There is lots of potential still there.

Returning to EV, this takes the valuation of the assets being sold less debts … but importantly it includes cash and near cash and debtors. Here this would be 272 m potential reserve barrels and EV adds on any debts owed to the company that would accrue to the buyer.

There is nothing in the ERC report as far as I can see for valuing Contingent Resources. I have assumed the conversion of 2C resources into 2P reserves takes place and that the status of the 2C resources as being near reserves are recognised by a major.

The inevitability of this translation was set out in the CPR report; something that Equipoise expects to happen over time.

GRH recently put out a post (largely ignored) that mentioned Enterprise Value.

He made the point that this is always the way that a predator approaches a corporate action like a farmin or a take over. It is quite simply the way they think.

Roughly this is a valuation methods based on a company’s assets.

From the CPR most of the 2P+2C assets are at Shaikan and they add up to approximately 545 m barrels of potential reserves (163 2P + 382 2C) when the 2C resources are translated into the 2P reserves category. The additional assets in particular the plant at PF1 and PF2 are dealt with later in this post.

Using the 54.7% entitlement conjectured above (Not GKPs entitlement but the % entitlement acquired by a Major in a possible farmin deal) all this would translate to approximately 554m barrels of reserves worth $6.16 each to a Major.

Using the $6.16/barrel figure put out by Equipoise to calculate the valuation of Shaikan to a Major this equates to $3.41 billion. Gas identified in the CPR as 537 bcf is thrown in for free.

Lets just pause there for a moment.

WHAT WOULD SUCH A FARMIN BE WORTH TO GKP?

Firstly their entitlement would be halved but they would receive a cash sum for the 27% of Shaikan sold to a major in a farmin deal.

Dalesmann: Stepping Forwards

Or What does the CPR Mean to a Major?

Lets enter the realms of conjecture for a moment and view the CPR from the point of view of a Major.

RESERVES RECLASSIFICATION

First of all there is no question in my mind that a major could take over as operator and very quickly ramp up the drilling program adding additional production facilities as they go and do so very quickly.

In effect what I’m saying is that a major – Chevron, Exxon, Total etc. could translate the 2C resources into reserves very quickly providing they took over as operator at Shaikan.

This is possible for a major because they have access to a level of capital which is not available to GKP and that allows a major to move from 2C to 2P much faster than can be done by GKP.

Equipoise referred to their 2C figures at Shaikan saying that with extra drilling these would move quickly from 2C to 2P.

MAJOR TO BECOME OPERATOR

The above demands that GKP gives up the role of operator at Shaikan.

Why and how would they do that?

Let’s look at this opportunity from a major’s point of view.

Let’s say that a major were to effect a farmin taking half of GKPs percentage. So the 54.4% fully diluted GKP entitlement becomes 27.2%. They buy the 15% backin rights from the KRG. They also buy MOLs 12.5% stake. These three figures add up to 54.7% and it would be logical that they then take over as operator.

I’m told by a friend who is employed in the industry that even a Major would need a minimum of 6 months to get the FDP updated, and begin developing the field as Operator.

WHAT WOULD A MAJOR GET FOR THEIR MONEY?

Slide 15: Top Jurassic TWT P90 (-784m TVDSS)

Slide 16: Top Jurassic TWT P50 (-1169m TVDSS)

Slide 17: Top Jurassic TWT P10 (-1500m TVDSS)

Slide 18: Top Jurassic TWT P1 (-2230m TVDSS)

Indeed, LKO at -1991m SS is closer to P1 than P10! If one assumed a linear extrapolation (strictly it is not), LKO at -1991m SS is roughly equivalent to P3.

Now keep in mind that the May 2010 Investor Presentation was made just a few months after the DGA Report which estimated the following volumes for Shaikan - just down to the 2950m TD depth of SH-1 (i.e. excluding the potential additional 5 billion barrels plus below 2950m):

P90 = 1.9 BBO

P50 = 4.2 BBO

P10 = 7.4 BBO

P1 = 13 BBO

As an aside, I would just comment that Todd's off-the-cuff remark about 13 BBO was probably just an in-memory number about P1 from the time of the 'old' DGA report. He obviously forgot that the old DGA report also mentioned a further additionally upside of over 5 BBO for the deeper Triassic and Permian. And his mind must have been on other matters (can't think what!) as he seems to have completely over-looked the latest DGA estimate of P90=4.86 BBO, P50=7.51 BBO, P10=10.8 BBO and P1=15 BBO - again, excluding any volumes for the deeper Triassic and Permian!

One last thing, you may notice from the above numbers that the 'old P10' has become the 'new P50' - based solely on the new data from the upper Jurassic in SH-2. It can therefore also be deduced from this that SH-2 must have proven up LKO down to around the old P10 depth of -1500m SS. And that's also why only the P1 slide is included in the latest June 2011 Investor Presentation - they have already gone past the old P10 LKO depth at -1500m SS just with the SH-2 upper Jurassic update, the future upside is now firmly focussing purely on P1 (i.e. filled to spill). You don't need to be a rocket scientist to realise what OIP numbers will out when the circa P3 LKO depth of -1991m SS from SA-1 is incorporated - just re-visit Todd's CNN interview - but please keep in mind that 10-15 billion barrels is only down to 2950m (excludes the deeper Triassic and Permian). Oh, and it excludes a 5% to 10% enlargement of the overall size of the Shaikan structure. Oh, and it does not include any volumes for Sheikh Adi, Ber Behr and Akri Bijeel. Bummer eh?

GLA,

BBBS

- Note that total Jurassic thickness is 994m (1561-567)

- Note that Top Butmah occurs at 32% below Top Jurassic ((886-567)/1561-567))

- Note that Butmah LKO occurs at 39% below Top Butmah ((1149-886)/(1561-886))

An estimation of the corresponding Tops for well SA-1 is shown below. A very reliable source familiar with the matter has informed me that the surface elevation at SA-1 is 930m. Since no information is available concerning well deviation (if any) it is presumed that the well is vertical and so MD depth is the same as TVD depth. Note that there is a constant 930m offset between TVD and SS depths:

Well SA-1:

Top or LKO / MD dept / TVD dep / SS depth

Top Sargelu / 2685 m. / 2685 m. / -1755 m.

Top Butmah / 1772 m. / 2880 m. / -1950 m.

LKO Butmah / 2035 m. / 2921 m. / -1991 m.

Top K.C.-A / 3293 m. / 3293 m. / -2363 m.

- Top Sargelu estimated at 2685m MD (RNS of 11th April: "Drilling operations have finally reached the Jurassic and well operations are on- going. At 7 April 2011 the well was at a depth of 2,685 metres.")

- Top Kurre Chine A estimated at 3293m MD (RNS of 23rd May: "The Sheikh Adi-1 exploration well has reached the Triassic and has cut a core in the Kurre Chine A at a depth of 3,293 meters.")

- Note that total Jurassic thickness is 608m (2363-1755). This is only about 60% of the Jurassic thickness at SH-1; it is presumed correct but there may be errors in both Top Sargelu and Top KCA estimates.

- Top Butmah estimated at 32% below Top Jurassic ((1950-1755)/2363-1755)). This is the same relative depth thickness as SH-1.

- LKO Butmah estimated at 10% below Top Butmah ((1991-1950)/(2363-1950)). The conservative 10% (as opposed to 39% in SH-1) has been applied due to the lower net pay reported at SA-1. There is definitely net pay within the SA-1 Butmah interval since the RNS of 23rd May reported "In addition, log data indicates moveable oil in the Sargelu/ Alan (obtained in sections deeper than the test zone), Mus and Butmah".

So, based on the above estimation, LKO at SA-1 may now have been proven down to -1991m SS. This does of course fall short of proving up the OWC which GKP have estimated from formation pressure data to be at around -2230m SS. However, it is important to realise that LKO at circa -1991m SS is in fact rapidly approaching the PI filled to spill volumes for the Jurassic. I refer again to slides 15 through 18 in the May 2010 Investor Presentation which present visualisations of the mapped volumes as follows:

APPROACHING FILLED TO SPILL: LKO IN SHAIKAN-SHEIKH ADI STRUCTURE

Well, fuch, fuch, fuchity fuch, where's Des when you need him? Still no sign of water in any of the wells drilled thus far. Why are we not pleased? Because water is a prerequisite for the OWC! Then again, perhaps the sp will plummet to 5p when GKP eventually mentions the 'w' word! But seriously, whilst the OWC itself is yet to be penetrated, this does not take away anything from the ever-increasing OIP volumes that follow from each increase in the LKO depth. Lowest known oil is interpreted from log responses recorded over the drilled interval, the primary criterion being evidence for moveable oil. There is some subjectivity inasmuch that different interpreters will apply different requirements for aspects such as minimum interval thickness and average hydrocarbon saturation values over this interval. I mention this only to explain why GKP, DGA and Ryder Scott all came up with different LKO depths in the Jurassic of SH-1. DGA was most optimistic (-1287m SS, Table 3 in January 2010 DGA Report), GKP was most pessimistic (-1127m SS, slide 10 in June 2011 Investor Presentation), and Ryder Scott was in between (-1149m SS, page 80 in RS report). For this reason, I base the following analysis on RS results.

Firstly a review of some key Jurassic depths from SH-1. All depths are sourced from the 'Well Log Data Sheet' table on page 80 in the Ryder Scott report. The surface elevation at SH-1 was 786m, and since there was some slight deviation in this well, I include MD (Measured Depth from surface), TVD (TVD Depth from surface) and SS (TVD depth referenced to sea level). Note that, as you would expect, there is a constant 786m offset between TVD and SS depths:

Well SH-1:

Top or LKO / MD depth / TVD depth / SS depth

Top Sargelu / 1448 m. / 1353 m. / -567 m.

Top Butmah / 1772 m. / 1672 m. / -886 m.

LKO Butmah / 2035 m. / 1935 m. / -1149 m.

Top K.C.-A / 2447 m. / 2347 m. / -1561 m.

Ok, so I've used 'IMO' a few times in my above explanations of how the 3D seismic shows - according to JG - that Shaikan and Sheikh Adi are most likely connected. But I'm not alone - as referenced in the title - Did S* spill the beans? No, I'm not relying on Sanddunes who previously claimed "SA filled to spill"! (although I do still stand by my previous post where I suggested that his source probably meant "SA and SH filled to spill" - more on this below). And I also don't mean Sharistani - although I really look forward to hearing it from him when he get's done with his latest exercise of compiling ICG + KRG resources! No, when I say 'Did S* spill the beans?' I mean Shamaran, check out page 9 in their latest Presentation:

http://www.shamaranpetroleum.com/i/pdf/InvestorPresentation-June-2011.pdf

Yes, they are showing that Shaikan has grown (by a tad more than 5%-10% I would say!) to encompass the Sheikh Adi-1 well location. Now where on earth would they get the idea that Shaikan and Sheikh Adi are connected - at least as far as the SA-1 well location?? Of course this is not the end of the story, it's fair enough that they honour the reverse fault just to the north of SA-1 since GKP have not (yet) drilled a well on the main SA structure. But a future well on the main SA structure - or even a clearer picture from the 3D seismic - will reveal whether this fault is continuous or not and define the final areal extent of the growing Shaikan baby - and, in time, whether it grows into full adulthood to encompass Ber Behar as well. Patience still required yes, but definitely worth waiting for. IMO.

Now of course connectivity between Shaikan and Sheikh Adi is one thing, and filled to spill is another. But IF there is connectivity between Shaikan and Sheikh Adi - as currently suggested by JG and supported pictorially by Shamaran - then some estimates can be made with regard to where we stand today with respect to the OWC, or at least the LKO in the Jurassic:

The above Q&A is highly pertinent to the Shaikan-Sheikh Adi connectivity discussion - the SH-4 well is at the extreme western boundary of the Shaikan block (it sits close to the the boundary between the Shaikan and Sheikh Adi blocks) and is also located very close to the main northern W-E fault that I have been discussing above and in previous posts. So when JG says "Indications from the 3-D are that the fault is not nearly as continuous as it appears on the 2D which augurs well for the probability of success for a northern well. It also means that there would not be much impact if the well did cross the fault", he is saying that it is likely that there is connectivity (communication) across the (non-continuous) northern fault in the vicinity of the SH-4 well location. In other words, it is likely that connectivity exists between the main Shaikan up-thrown structure and the down-thrown block that runs west/north-west into Al Qush and Sheikh Adi. IMO.

2. SHEIKH ADI: In my previous post I tried to help people visualise how the SA-1 well, having passed through a reverse fault, had ended up penetrating the down-thrown block that is common to both Shaikan and Sheikh Adi, ("If you're still with me, then you can picture the SA-1 well starting out in the upthrust SA structure, crossing a reverse fault at around base Cretaceous and then drilling down into the down-thrown side of the block to say hello to Shaikan (the down-thrown block is sandwiched between and common to both SA and Shaikan)"). And that this is exactly where GKP need to be if they want to get close to drilling through the OWC / spill point of the Shaikan structure (refer OWC schematic on page 10 of the June 2011 GKP Presentation). I'll even go one step further, and state that, IMO, SA-1 was DELIBERATELY converted from a Sheikh Adi Exploration well into a Shaikan Appraisal well - with the specific purpose of evaluating LKO (or perhaps even the OWC) at deeper depths in the Jurassic formations. The well became a Shaikan appraisal well as soon as it passed through the reverse fault. GKP had plenty of time to consider the situation as they were re-drilling 400-500 metres of Cretaceous formations after passing through the fault. But they CHOSE to keep on drilling rather than opening a window in the 13 3/8" casing further uphole and sidetracking northwards to remain in the main up-thrown Sheikh Adi structure. So why did they (deliberately IMO) convert SA-1 into a Shaikan appraisal well? The race against time of course. And more accurate pricing of Shaikan BIR that are due to be awarded ... very soon!

CONNECTIVITY BETWEEN SHAIKAN AND SHEIKH ADI

I have previously posted about the likelyhood of connection between the Shaikan and Sheikh Adi structures, "Seismic, Sheikh Adi and Sanddunes":

http://www.iii.co.uk/investment/detail?code=cotn%3AGKP.L&display=discussion&threshold=0&action=detail&id=8118898

I get bored with repetition, so please read through that post to follow my rationale for saying:

1. SEISMIC: The 3D seismic will have revealed whether GKP or DGA were correct with regard to closure at the western end of Shaikan. The issue concerns closure (DGA) or not (GKP) at the western end of the main northern W-E fault, i.e. GKP are interpreting that this fault peters out at the western end, thereby allowing connectivity from the Shaikan main structure (up-thrown block) into the down-thrown block that runs west/north-west into Al Qush and Sheikh Adi. Gramacho's recent Q&A with JG gives compelling evidence that the 3D seismic is showing that GKP's 2D interpretation is correct:

http://www.iii.co.uk/investment/detail?code=cotn%3AGKP.L&display=discussion&threshold=0&action=detail&id=8390330

"Shaikan-4

Q. The RNS of 27/5/11 indicated Shaikan-4 is being drilled 6 kilometres to the north-west of the Shaikan-1 discovery well. Looking at the maps it is not entirely clear if the well is being drilled to the south of the northern fault. Presumably the location was chosen from the 2-D? Has it been confirmed as being OK on the 3-D? How close is the northern fault? Are the geos absolutely convinced they will avoid it or is there a risk of crossing it and if so are we at risk of the SA-1 scenario where the Cretaceous is drilled twice?

A. The well is similar to Shaikan 1 in that it is just south of the northern fault. Indications from the 3-D are that the fault is not nearly as continuous as it appears on the 2D which augurs well for the probability of success for a northern well. It also means that there would not be much impact if the well did cross the fault (presumably because the fault throw would be small and potentially non sealing)."

Hello all, long time no see. I've been 'otherwise engaged' of late - have I missed anything? Well, after an intensive catch-up, it seems to me that one or two things have been missed - or perhaps some people just have difficulty with focus (for whatever reason!).

Where do I begin? Well, for me, the size of GKP's success is still all about whether the Jurassic is filled to spill, i.e. where is the OWC and/or how deep are we now concerning LKO (Lowest Known Oil) in the Jurassic. This does not mean that the Cretaceous, Triassic and Permian formations are irrelevant; just that the volumetric (OIP) consequences of a deep Jurassic OWC in Shaikan are overwhelming in the context of what will most likely be present in ALL of GKP's four blocks (Shaikan + Sheikh Adi + Ber Behar + Akri Bijeel). In other words, my focus is on the big picture for the Jurassic as shown in slides 15 through 18 in the May 2010 Investor Presentation. I have posted about this on several previous occasions ... it is the main driver behind the BBBS POTENTIAL button on spidey's NAV calculator.

So whilst I can understand the disappointment of some concerning the poor initial flow test results at Sheikh Adi, I am surprised that the focus has been mainly on this and not on the fact that the well is full of oil - moveable oil - throughout the Jurassic and into the Triassic (RNS of 23rd May "Prior to reaching the Triassic, logs and cores were obtained in the Jurassic sections, which show hydrocarbon saturations and where 45 meters of net pay have been calculated", "A core totaling almost 13 meters was recovered from the Barsarin/ Sargelu Jurassic section which had moderate oil shows", "A core of just over 12 meters was also obtained in the Butmah containing good oil shows", and "In addition, log data indicates moveable oil in the Sargelu/ Alan (obtained in sections deeper than the test zone), Mus and Butmah, all of which would be the target of a future potential test programme"). Ok, so there are less fractures in the down-thrown block, but (a) OIP resides predominantly in the matrix porosity - the 45 meters of net pay - and not in the fractures (fractures are great for providing a flow path from the matrix porosity into the well but the fracture porosity itself is almost inconsequential to the OIP volume - DGA did not even include any volumes for the fracture porosity), and (b), most importantly, there is NO WATER!

Think about how this fits into the big picture - in a massive structure the size of Shaikan-Sheikh Adi, there are bound to be some wells that encounter less fractures than others. And one has just been encountered, not unsurprisingly, in the down-thrown, less folded block, that sits between the main up-thrown blocks of Sheikh Adi and Shaikan. The most salient point is this: the down-thrown block between the Shaikan and Sheikh Adi main structures contains moveable oil, NOT WATER.

November 17, 2025

"Sources inside Baghdad say Iraq’s Hydrocarbon Law is already signed and held for a timed Q4 release — removing the last major legislative roadblock."

Interesting times ahead.

November 19, 2025.

"Masrour Barzani - The recent oil agreements and the resumption of exports are temporary and will remain so until Iraq passes a national oil and gas law.

HE EMPHASIZED THAT THE KRG INTENDS TO RE-EXPORT OIL INDEPENDENTLY ONCE A LEGAL FRAMEWORK IS FINALIZED."

Kanaa Ayoub☀️

@KanaaAyoub

·

Oct 16

🚨🚨Kurdistan is a buried treasure and now is the time to unearth it.

🚨Kurdistan has the largest gas and oil reserves in the world. 🚨

Sky News Arabia

@skynewsarabia

reports on the rich potential of Kurdistan in precious mineral resources and its possession of energy sources in terrifying quantities that attract huge investments. These resources were present but there was a decision not to disclose them until the appropriate time. Kurdistan has the largest oil reserves in the world at 45 billion barrels and the largest natural gas reserves in the world at 177 trillion cubic meters. It also has huge reserves of gold, iron, copper and zinc.

🚨🚨

Kurdistan has very fertile lands and has food security reserves of wheat and other crops.

🚨🚨

This is only the southern part of Kurdistan. Kurdistan in all its parts is the richest land in the Middle East.

* AND THAT IS EXACTLY WHY WE HAVE HAD TO ENDURE WHAT WE HAVE ENDURED OVER THE YEARS ! LET'S HOPE THE 'APPROPRIATE TIME' IS NOT THAT FAR OFF.............. I DON'T THINK IT IS !

Gulf Keystone is pleased to confirm that a first lifting of Kurdistan crude allocated to the Company and other International Oil Companies (“IOCs”) for pipeline exports during September and October 2025 has been completed by the nominated trader at the Ceyhan oil terminal in Türkiye.

Payment for the Company’s share of the first lifting is expected to be received within the next 30 days, in line with the interim exports agreements that were previously announced by the Company on 26 September 2025. A second lifting for IOC allocation of Kurdistan crude exported in October 2025 is planned for the end of November 2025, with subsequent liftings and payments anticipated thereafter.

The Company plans to provide a further update next month as part of its regular December Operational & Corporate Update.

If they are worth $1.4B - with debts of $808M - they cannot afford us - imo !

Sincerely hope you are right Jens ! It's been a very long haul and I for one just want to get what's due and get the hell away from the stock market !

Hope you are well. :-)

Re: this article from December 2011, when Exxon was reported to be mulling over a £7 Billion takeover of GKP ( which I remember well at the time ) - can anyone calculate what this could possibly equate to now - given the reduced number of shares etc etc ?

https://www.reuters.com/article/us-exxon-gulf-keystone-paper-idUSTRE7BH0FV20111218/

#BREAKING: Iraqi PM Mohammed Shia' al-Sudani holds a phone call with US Secretary of State Marco Rubio, discussing efforts to "finalize U.S. commercial deals in Iraq" - Statement

"The Secretary congratulated the Prime Minister for resuming oil exports via the Iraq-Türkiye Pipeline, which will benefit Iraq, Türkiye, and American businesses," the US State Department wrote

Rubio also "highlighted the urgency in disarming Iran-backed militias that undermine Iraq’s sovereignty, threaten the lives and businesses of Americans and Iraqis, and pilfer Iraqi resources for Iran"

And some sadly fell by the side of the road.............

Further south but not that far lol !

Sounds good Jimmee - but I don't live there anymore - lol !