Shares in Gulf Keystone fell 30% on Wednesday as markets opened for the first time since last week, when Excalibur Ventures in New York issued a legal challenge. Three hours after the London market opened the share price has recovered somewhat, but still leaves a fall of around 10% at 167 pence.
Excalibur believes it is entitled to 30% of oil explorer Gulf Keystone’s blocks in the northern region of Kurdistan, according to Reuters. Excalibur called for an immediate freeze on all Gulf Keystone’s assets, but a UK court refused on the basis that the assets are not likely to dissipate.
Gulf Keystone is focused in Iraq with a share in four blocks. Todd Kozel, the chief executive, said “We believe we have very good grounds to vigorously challenge these claims in both the US and UK courts. We are confident of being able to defeat these claims in any legal jurisdiction.”
Undeterred by the claims, Gulf Keystone announced today that it is looking to be promoted from the small London AIM market to a full listing, which would move it into the top 250 companies listed in London by size.
However, to do this it will have to overcome the regulator’s concerns that it has no oil reserves, that it is not in profit, and that it has not yet pumped any oil. This may be difficult, as Dynamic Global Advisors, the assessors that estimated its reserves to be 1.9bn to 7.4bn barrels of oil, is virtually unknown, according to the Financial Times.
Kozel is looking to get 8,000 bpd in test production in January to encourage the regulators to approve the company’s move to the main market.
(Reuters, Growth Company Investor, Financial Times)