Wednesday 25 February 2015

GKP puts itself up for sale

It's been a while since GKP left the AIM stock market for the main market. Sadly for the company thought, which had a fantastic run in 2009-2011, events have really caught up with it.

Drilling in Kurdistan was always risky but who knew ISIS would be threatening and the whole area would turn into a warzone. Worse, the Kurdish Government has never been able to come to a political settlement with the main Government of Iraq concerning oil funds; so there has been precious little money to pay the Oil companies whom they gave licences too in Kurdistan.

With the large debts built up from exploration, GKP has a hard time paying its debts. As such today the company has put itself up for sale. Moving the shareprice up 50% at time of writing, but still at fraction of where the shares once traded.

Afren, a fellow oil company in Kurdistan with huge problems. also struggling to sell its assets, it maybe a firesale of sorts - it is not like the Global market for Oil M&A is very hot right now.

I have been invested on an off in the company for a long time - it amazes me how much global politics and events have ended up defining one small oil play in end.


Steven_L said...

I still think the folk that run these oil drilling companies are nicking your money.

CityUnslicker said...

You could say that about any company that is listed though if you want to be cynical?

andrew said...

if the company makes lots of money the words are 'remuneration' and 'fair' and 'compensation'

if the company loses lots of money the words are 'theft' and 'fraud' and 'dodgy'

the gap that decides between the two is ever so small.

never mind that - I mis-read and thought you were talking about gkn

one letter is the difference between zzz and zomg, reach for my isa.

Budgie said...

CU, even with a 66% rise (currently) to 59p it does not compare well with my holdings at 188p. Well, it might make £1+ but not £2, I think.

CityUnslicker said...

Budgie, overall I am just about up on GKP, but have about £1000 worth now vs £40k in the heady days of 2011/12.

Not sure they will find a buyer easliy, if they do it might surprise and got for as much as 150.

Mark Wadsworth said...

"whom they gave licences too in Kurdistan."

"to whom" but never mind.

Somebody once told me that if you (i.e. an oil or gas company) is investing in a dodgy country, then what you do is fund the investment by borrowing from a bank in that country.

If the government topples or pulls the rug, you just walk away from the assets and the debt. All very annoying but not the end of the world.