Gulf Keystone shares soar on takeover report

LONDON Mon Dec 19, 2011 9:12am GMT

Related Topics

Quotes

   

LONDON Dec 19 (Reuters) - Shares in Kurdistan-focused oil explorer Gulf Keystone Petroleum soared on Monday following a report that U.S. oil major Exxon Mobil Corp was mulling a takeover bid at five times the company's closing share price on Friday.

The Independent on Sunday newspaper reported that Exxon is considering making an estimated 800 pence per share bid for Britain's Gulf Keystone, which has made huge oil finds in the semi-autonomous Kurdistan region of Iraq. The reported bid values Gulf Keystone at around 7 billion pounds ($10.9 billion).

A source close to the situation downplayed the story, noting bidders rarely make offers at more than a 50 percent premium to targets' pre-bid share price.

Analysts dismissed the prospect of such a high bid from the notoriously financially disciplined Texas-based oil giant, which made headlines with its recent entry into the semi-autonomous Kurdish region of Iraq.

"We fear an element of yuletide wishful thinking may also be playing a part," said Richard Savage, oil analyst at brokerage Mirabaud.

Nonetheless, Gulf Keystone shares traded up 24 percent at 205.75 pence at 0851 GMT.

Exxon became the first major to move into the Kurdish region in mid-October when it signed with the Kurdistan Regional Government (KRG) for six exploration blocks, a move which has angered the Baghdad government.

Industry sources said that many big western oil companies have been mulling an entry into Kurdistan, by either buying existing players in the region, many of whom are small independents, or by buying new licencing blocks.

Gulf Keystone said in September it was seeking a buyer for its 20 percent interest in the Akri-Bijeel block in Kurdistan in order to help finance ongoing development of other assets.

Industry sources said the company has mulled a possible sale of others parts, or all, of its interests in Kurdistan. (Additional reporting by Sarah Young; Editing by Mike Nesbit)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.