Gulf Keystone Petroleum Share Discussion Threads

[nestoframpers] 04/6/2018 10:47

SEE the tip I gave you last week is up 15 % today.

[oil_investor] 04/6/2018 10:03

masirah: Bigdog5 poses the following question.

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Bigdog5 - 03 Jun 2018 - 19:29:40 - 565640 of 565668 THE NEW GKP / Drilling for Super Giants (moderated) - GKP

Here's some maths for you all.

If it takes 8+ wells (and tons of money) and nine years to achieve 30k a day, how many wells, how much money and how many years will it take to reach 75k?

Do take into account JF's achievement in getting his "boring oil company":-)

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But the answer to the question was given by the company in the 2017 Annual Report which was published on 11 May 2018, which is less than four weeks ago. Doesn’t he read Annual Reports? Or is he simply trying to put a negative slant on the Shaikan asset?

GKP said in the 2017 Annual Report that the first stage of the planned work programme - which will follow the commissioning of the connection of Shaikan to the Atrush Feeder Pipeline, with Mark Antelme having confirmed in writing only the other day that the pipeline work is underway - involves the following:

* three Electric Submersible Pumps (ESPs) on existing Shaikan Jurassic production wells plus one additional production well complete with ESP. Installing an ESP with that new well is good practice because, even if it’s additional pressure contribution isn’t required at the start, it avoids the cost of installing one later. That work will take the total number of Shaikan Jurassic wells, on production, to 10

* whilst these 10 wells appear to be what is required subsurface to achieve a sustained 40,000 bopd, GKP have explained that the 10 wells should actually produce considerably more than that. The company have explained that the 10 wells are designed to support 55,000 bopd Shaikan Jurassic production. That gives an average, per well, of 5,500 bopd. It is therefore apparent that lifting the Shaikan Jurassic production from 55,000 bopd to 75,000 bopd would require, pro-rata, 4 more wells

* when we look closely at what GKP have said in the 2017 Annual Report we do see those four Jurassic wells (and their associated ESPs, good practice as noted above) shown explicitly on the timeline which is given at printed page #18

* what we also see are three further Jurassic production wells (and their associated ESPs) which GKP explain are in fact Full Field Development wells which have been brought forward in the planned Shaikan work programme. These three wells, GKP explains, are planned “to gain more reservoir understanding, assure a sustained increased plateau production and benefit from drilling efficiencies and cost savings from a single campaign”. With the company currently awash with cash, this seems a very sensible move to me. But I think we need to note that those wells are not really anything to do with 55,000 bopd or 75,000 bopd, but are actually from a Full Field Development stage beyond that (100,000 bopd, etc) but brought forward because of the reasons given by GKP

* GKP will of course gain considerable new information from drilling the additional Jurassic production well and the three “FFD brought forward” wells. The drilling will give all sorts of opportunities for logging, coring, pressure testing, downhole seismic, downhole visual imaging, neutron logging etc. which will significantly extend the logging etc. data which was obtained years ago at SH-1 and the subsequent Appraisal Programme wells.

So we see that the number of wells required to achieve 75,000 bopd, starting from the current situation as the baseline, is actually 5. That is the first well, plus the further four. The three “FFD brought forward” wells are clearly a separate issue.

So that’s the answer to the number of wells required to achieve 75,000 bopd, as taken directly from the 2017 Annual Report. The gross cost of achieving the 55,000 bopd level is given by GKP - who will pay 64% of it, in return for their 58% working interest, because of the carry. That work is funded, as GKP have clearly explained. The CPR gives the cost of Jurassic production wells as $21 million each. So the three “FFD brought forward” wells would on that metric be $63 million gross, with a GKP contribution to that of $40.3 million. Hardly a fortune is it, with GKP throwing off cash as enormous chinese takeaway reminds us?

Now let’s take a look at what the additional 20,000 bopd, from 55,000 bopd to 75,000 bopd, should generate in revenue. The full year effect of that increase is 7.3 million barrels. Assuming an oil price of say $73 a barrel, the gross revenue after making the agreed deduction to Brent for quality and transport (the latter soon to reduce somewhat because of the Atrush Feeder Pipeline connection) would be $365 million per annum. That’s right, one million dollars a day, gross. So where’s the problem for the MNR in getting the work funded and done? There clearly isn’t one. Are the cars for the Shaikan Grand Prix on the starting grid? Who knows...the MNR are the Bernie Ecclestone of Shaikan imo.

Or let us look at how much GKP are currently receiving per barrel, under the PSC terms. The payment to GKP for January 2018 production was $17.8 million, for +/- 0.95 million barrels of gross production. That’s roughly $18.5 per barrel...deduct some operating costs and its c. $15 a barrel. So using that as a very broad metric, GKP might potentially receive a full-year income, from the incremental 7.3 million barrels, of around $100 million. So where’s the problem with funding the wells?

In my opinion Jaap Huijskes needs to clearly set out his stall. With better communications - which GKP have been promising since late 2013, as was explicitly stated in the subsequently-removed first episode of GulfTV - shareholders might have a rather clearer idea of things. That said, the 2017 Annual Report is pretty clear to those who read it.

[gkphero] 04/6/2018 09:39

I'm the gaffer round here. The troll Kilt works or me........

[kiltless highlander] 04/6/2018 09:16

Almost 8 weeks on from ect's failed prediction of "Bang gone, April 11th, guaranteed takeover".....just like all his and others failed predictions of the last 8 years under varying aliases & Multi handles.

Utter bull, do not listen to these crooks.

[kiltless highlander] 04/6/2018 09:08

Going down like the Titanic now!

[xkeystone] 04/6/2018 09:01

501697 still there.

[oilman63] 04/6/2018 08:56

I can assure you it wasn't me.

[oilman63] 04/6/2018 08:32

Good Morning 😃

Early start today.

Just thought I would let you know that there wasn't one large buyer of the recent share sale and this is also confirmed by the lack of a TR1.

Ignoring the blog noise things out in Kurdistan not looking that great at the moment in general.

Enjoy the rest of your day because I will.