Gulf Keystone Petroleum Share Discussion Threads

[phillis] 20/11/2016 15:05

The restructuring is complete
It is dead
There is no conditionality
There is no lock up

As Roy Orbison once chortled " It's over"

[nestoframpers] 20/11/2016 14:47

Some ramp by USGS , Phillis will think it's good though .

[nestoframpers] 20/11/2016 14:44

There is much excitement at the USGS announcement of their discovery of vast shale oil resources in the Wolfcamp area of the Midland Basin in Texas. At 20 billion barrels it’s said to be the largest continuous field ever discovered. It most certainly has a value and we are all of us richer as a result of the discovery of this most useful material. However, this isn’t worth $900 billion, that’s just not how resource economics works. But that is the insistence at The Guardian:

A huge deposit of untapped oil, possibly the largest ever discovered in the US, has been identified by the US Geological Survey (USGS) in west Texas.

The USGS estimated that 20bn barrels of oil was contained within layers of shale in the Permian Basin, a vast geological formation that stretches across western Texas and an area of New Mexico. The discovery is three times larger than the Bakken oilfields of North Dakota and is worth around $900bn.

The enormous deposit, in the Midland Basin Wolfcamp shale area that includes the cities of Lubbock and Midland in Texas, is the largest continuous oilfield ever discovered by the USGS. The area also includes 16tn cubic feet of natural gas and 1.6bn barrel of natural gas liquids.

Everything except that valuation there is just fine. But that valuation is horribly wrong. Because what they’ve done is just look at the market price of oil, multiply by the volume and say that’s the worth of it, the value.

Except there are certain costs associated with getting that oil up out of the ground. Thus the value of an oil, or indeed any mineral, deposit in situ, in the ground, is very different from the value once extracted, processed and ready for use. Just because all of those things, extraction, processing, making ready for use, cost money. So much so that the actual net value of this deposit could be anything from $899 billion to nothing, possibly even negative.

As a scientific publication points out, no one has actually done this testing as yet:

Undiscovered resources are those that are estimated to exist based on geologic knowledge and theory, while technically recoverable resources are those that can be produced using currently available technology and industry practices. Whether or not it is profitable to produce these resources has not been evaluated.



And as USGS itself says:

USGS is the only provider of publicly available estimates of undiscovered technically recoverable oil and gas resources of onshore lands and offshore state waters. The USGS Wolfcamp shale assessment was undertaken as part of a nationwide project assessing domestic petroleum basins using standardized methodology and protocol.

I have actually written an entire, if short, book on this very subject. I used other minerals rather than fossil fuels but the point still stands. A deposit of something is not an economic asset. It is only once we have worked out whether we can extract that resource, using current technology, and at current prices, and make a profit, that we can call it a mineral reserve (a resource is where we’re pretty sure we can, a reserve is where we’re sure we can). And we can only properly apply a positive valuation to something which is a mineral reserve.

Currently, we could, and in fact probably should, apply a valuation of zero to this deposit. Just to invent some numbers as examples, although they’re not far from the current truth. Say the price of crude oil is $45 a barrel. And the cost of extracting from this shale field is $45 a barrel. Those numbers are actually pretty close to today’s numbers. Well, sure, there’s something that people will pay $900 billion for after we’ve got it out of the ground then. And it will cost us $900 billion to get it out of the ground. The value of the stuff sitting in the ground is thus zero, isn’t it?

Yes, we can get more complex about this, there might be some option value. Someone willing to bet that the oil price will rise, or extraction costs fall.

But we really do have to remember this about mineral and resource valuations. The only thing that matters is the net value here, that’s the value once processed minus the cost of processing. And there are vast, huge, resources out there which have no value whatsoever. It is said, for example, that the North Sea has $5 trillion of gold in it. But it would cost $20 trillion to extract it, which is why we don’t and we use it to grow cod in, not as a gold mine. Net value matters, gross value doesn’t.

[notout] 20/11/2016 12:29

Mean while

We have had an open offer that scuppered any hostile acquirer ?dno by demolishing stakes
A d4e that has remaining conditionality - clearly holders locked up still
Now a golden parachute that discourages a deal after July 2017 and encourages one pre July

Soon be Dec 15

When will conditionality outcome (e) be known??

Massive buy
Much love
👄👄👄👄8068;

[notout] 20/11/2016 12:25

'Hope dies last'

[amgul] 20/11/2016 11:15

hope hope and hope

[0il_1nvestor] 20/11/2016 10:35

Oh dear.

The poster notout seems to think it's amusing to mock my repetitive style.

pocopicu: you were informed a week ago that we would be maintaining a dignified silence to allow the uninformed some quiet time to reflect on the true meaning of the barrels.

Both of you appear to have shown disloyalty to myself, which leaves me no alternative: your *reliable* status is now revoked.

Back to my dossier.

[pocopicu] 20/11/2016 10:18

The Lonely, Loser, Liar responds within minutes ;-)Local farm produce???? PMSL!!!!! He clearly thinks that eating potato's and carrots straight from the field (probably with the soil still on) is indicative of a privileged existence. He fails to recognise that this is precisely what his peasant ancestors have done for centuries. That is why peasants like him will remain peasants. Call it a soil ceiling.Right....off to enjoy my Sunday. Good luck with refreshing this page all day LLL! PMSL!!!!! Local farm produce!!!!!

[phillis] 20/11/2016 10:15

Fake
Spot on

"They still don't get it"

[pocopicu] 20/11/2016 10:01

Good morning all genuines :-)Good morning the Lonely, Losers, Liars.Good morning the drunks, incontinent, copy cats.Good morning the sad pensioners with nothing better to occupy their desperate remaining years on this earth then to spend every minute of it on this completely irrelevant anonymous bb.Lovely morning here in beautiful Cheshire (the part of Cheshire that is only accessible to most of you as pizza delivery workers), if a little cold.The enlightened amongst us know that this is a gigantic, enormous buy :-)

[notout] 20/11/2016 09:37

the vcp latest nonsense translated :

A golden parachute consists of substantial benefits given to top executives if the company is taken over by another firm and the executives are terminated as a result of the merger or takeover. Golden parachutes are contracts given to key executives and can be used as a type of anti-takeover measure, often collectively referred to as poison pills, taken by a firm to discourage an unwanted takeover attempt. Benefits may include stock options, cash bonuses and generous severance pay.


A friendly deal pre July appears to be the go then.
Just 2% in the trough - seems reasonable
Post July a hostile one going to get rather pricier for unwanted acquisitors


Huge buy
Much love
👀👀👀👀8068;👄Ԁ68;👄👄;
All the best

[fake taxi] 20/11/2016 09:29

Idiot is on a wild goose chase again.

[notout] 20/11/2016 09:24

the vcp latest nonsense translated :

A golden parachute consists of substantial benefits given to top executives if the company is taken over by another firm and the executives are terminated as a result of the merger or takeover. Golden parachutes are contracts given to key executives and can be used as a type of anti-takeover measure, often collectively referred to as poison pills, taken by a firm to discourage an unwanted takeover attempt. Benefits may include stock options, cash bonuses and generous severance pay.


A friendly deal pre July appears to be the go then.
Just 2% in the trough - seems reasonable
Post July a hostile one going to get rather pricier for unwanted acquisitors


Huge buy
Much love
👀👀👀👀8068;👄Ԁ68;👄👄;
All the best

[hearts1] 20/11/2016 09:20

I think his writing skills are dependent on how much cider and weed he has consumed on that day.

[j0ck ewing] 20/11/2016 00:06

Has nestof had a wizened old hand shoved up his rectum for glove puppet purposes?

I think we should be told, for heavens sake, oh dear.

[lifeson] 19/11/2016 23:16

Anyway that's the nightshift in so I'll leave you all in the very capable hands of GKP's favourite son Terry.

[lifeson] 19/11/2016 23:13

I'm waiting on Aramco's listing. When that happens then it's safe to say that Ghawar will be in serious decline if it's not already.

[terry hardacre] 19/11/2016 23:08

Yep, definite crisis. Ha ha ha :0

[nestoframpers] 19/11/2016 23:03

POO could move very quickly , when are AMACO releasing their CPR prior to listing ?

[nestoframpers] 19/11/2016 23:02

2012 MKcap of £4.3 bill , were people buying blindly just as Todd said double digit bills ? I don't think people are that stupid.

What were the Co values in the Wempen case again ? think they wanted £1.3 bill ? So that means todays BOD reckon AB SA and BB were worth a £bill.

JFSZ sounds like one of those dodgy Soviet block vehicles, vehicle for what though?