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Legal brief from Gulf Keystone

Gulf Keystone Petroleum has delivered a legal update in relation to its dispute with Excalibur Ventures
February 18, 2013

The share price of Gulf Keystone Petroleum (GKP) has risen after the Kurdistan-focused driller updated the market on its long-running legal dispute with Excalibur Ventures - a US-based entity headed by former Green Beret Rex Wempen.

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The case centres on claims by Wempen that Excalibur is entitled to as much as 30 per cent of Gulf Keystone's assets in the Kurdistan region of northern Iraq, including those of the highly rated Shaikan field. Excalibur, it is claimed, entered into a "collaboration agreement" with Texas Keystone Inc in 2006, which gave it partial entitlement to any fields that were won in joint bids. Texas Keystone is controlled by family interests of Todd Kozel - Gulf Keystone's chairman & chief executive.

The English Commercial Court in London has ordered Excalibur to make a payment of £4.7m into court within 21 days as additional security for the costs of Gulf Keystone in defending the legal action, in addition to the payment of another £3.3m as security for the costs of Texas Keystone. The trial is scheduled to be completed at the end of February or in the early part of March, after which time the judge will deliver his decision through a written submission, although completion of the judgment may take in excess of three months. The payments are essentially sureties. Gulf Keystone has successfully moved to cover its increased legal costs in expectation that the Excalibur legal challenge will eventually prove baseless. Of course, the only certainty in these types of disputes is that the lawyers will walk away smiling.