Investors need not pay much attention to these first-half figures from Kurdistan-focused oil explorer Gulf Keystone Petroleum - instead, more recent developments are of more importance.
Gulf Keystone Petroleum (GKP) continues to make significant progress advancing its giant-sized oil assets in the autonomous Kurdistan region of Iraq towards field development. In August, the company submitted a declaration of commercial discovery to the relevant authorities, meaning it has 180 days to submit a field development plan. Assuming a speedy approval process, this will allow GKP to begin large-scale staged development in 2013.
To do so, however, it will need to raise money - a lot of money. GKP's main Shaikan field is a highly fractured carbonate and will require a significant capital outlay, not to mention technical expertise, to unlock the production potential. While GKP has been producing small amounts of oil for some time now as part of the appraisal process, all production mysteriously stopped in May on orders from the regional government. However, GKP's plan remains on track to commission two early production facilities at Shaikan in order to increase production to around 30,000 to 40,000 barrels of oil per day by mid-2013.
Broker Investec forecasts full-year EPS of 24¢ (loss of 8¢ a share in 2011), rising to 38.2¢ in 2013..
GULF KEYSTONE PETROLEUM (GKP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 226p | MARKET VALUE: | £1.98bn | |
| TOUCH: | 225-226p | 12-MONTH HIGH: | 450p | LOW: 121p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 67¢* | NET CASH: | $130m | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 1.7 | -10.4 | -1.37 | nil |
| 2012 | 15.5 | -29.4 | -3.68 | nil |
| % change | +839 | - | - | - |
£1=$1.61 *Includes intangible assets of $455m, or 52¢ a share | ||||
