What a year for Gulf Keystone Petroleum. While the financial figures for 2011 might not suggest a major transformation, the Kurdistan-focused oil and gas company has been making huge strides developing its multi-billion-barrel Shaikan oil discovery - and management says Shaikan is just the beginning of its wider regional development programme.
Gulf Keystone remains on track to produce 40,000 barrels per day from Shaikan next year, by which time a large exploration and appraisal well drilling programme will have also determined initial resources for three other blocks the company has interests in. Importantly, all of them have billion-barrel potential. The most promising target is the Sheikh Adi block, immediately west of Shaikan, where a second exploration well spudded last week.
But many investors believe Gulf Keystone won't survive long enough to realise the long-term gains to be had from the blocks' development - the company is widely touted as a takeover target, especially should relations between Kurdistan's regional government and Iraq's central government improve enough to hammer out key oil production and export agreements. Broker Investec estimates Gulf Keystone's pre-tax profits will hit $300m (£191m) this year, producing EPS of 24¢, rising sharply to $478m and 38¢, respectively, in 2013.
GULF KEYSTONE PETROLEUM (GKP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 204p | MARKET VALUE: | £1.79bn | |
| TOUCH: | 204-205p | 12-MONTH HIGH: | 450p | LOW: 87p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 69¢* | NET CASH: | $238m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 5.4 | -29.5 | -10.8 | nil |
| 2008 | 1.0 | -59.3 | -18.6 | nil |
| 2009 | nil | -96.3 | -22.8 | nil |
| 2010 | 0.8 | -26.8 | -4.2 | nil |
| 2011 | 6.9 | -63.8 | -8.0 | nil |
| % change | +763 | - | - | - |
*Includes intangible assets of $360m, or 41¢ a share £1=$1.57 | ||||
