Shares surge as Gulf Keystone admits sale talks
SHARES in oil firm Gulf Keystone (GKP) rocketed by almost 55 per cent yesterday, after the firm announced that it is in talks about a possible sale.
The firm stated that it has “recently engaged in discussions with a number of parties in relation to possible asset transactions or a sale of the company”. It added that “in view of strategic discussions and its current liquidity position, and with the intention of meeting its existing debt payment obligations”, it is undertaking a review of its financing options and engaging in discussions with its key stakeholders.
As of yesterday, GKP’s cash balance is $69.3m (£44.7m), and it also recently received a $26m gross payment for crude oil sales from its Shaikan field in the Kurdistan region of Iraq, following months of negotiations with the Kurdistan Regional Government (KRG). Negative sentiment in the region driven by IS fighting has impacted GKP and rivals in the area, like Genel and Afren.
Daniel Slater, analyst at Arden Partners, commented: “There was always likely to be a shake out of the sector on the back of the collapse in oil prices and Gulf Keystone may prove to be the latest casualty. Any deal may take some time, however, as acquirers wait for oil prices to further stabilise and for cash constrained companies to fall into deeper trouble.”
Meanwhile, Malcolm Graham-Wood, at HydroCarbon Capital, said the news would be painful for “shareholders who have been through more grief than almost any other I can imagine”.