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Is There Central European Appetite For Gulf Keystone?



As January came to a close, we reported on the IntelliNews news service that Gulf Keystone Petroleum (GUKYF, GFKSY), the London AIM listed exploration and production company, could be taken over by listed Hungarian oil concern MOL Hungarian Oil and Gas Public and Limited Company.

Since there is so little here on Seeking Alpha about Gulf Keystone, I thought I would add selections from our bit of reporting to the thin gruel heretofore on offer.

Our story was based on interviews with company officials at a conference in Vienna. Here are some highlights:

  • A MOL director said that Gulf Keystone, which has major oil production sites in Iraqi Kurdistan, is looking for both a "cash-in" and an "exit" and that MOL could look at making a bid for the company.
  • On January 10, MOL's upstream executive Alexander Dodds said that the company is considering "inorganic options" to grow the company's E&P and indicated the company has a war chest of over USD 1bn for such buys.
  • Gulf Keystone is viewed as a likely target for MOL as the company already has a 20% working interest in the Shaikan field operated by Gulf Keystone, financial sources said.
  • While high-level Iraqi government officials said they would bitterly oppose any major acquiring a independent in Kurdistan, the same officials expressed significantly less opposition when asked if the would oppose a purchase by a Central and Eastern European player such as MOL or PKN Orlen.

The market has not reacted so, caveat lector. We'll be watching though.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Stocks: GUKYF