Broker snap: Gulf Keystone could be "taken-out", WH Ireland says

20th Sep 2012 12:59

Analysts at WH Ireland have issued a bullish note on Gulf Keystone Petroleum this morning. The broker highlights the recent positive news-flow on the company -including the apparent resolution of the stand-off between authorities in Baghdad and Erbil and the construction of a new pipeline through Turkey- along with several other factors as possibly heralding a move by the company into the main FTSE index, from AIM. As regards the latter factors WH Ireland highlights the fact that: "The company is on track to achieve 150,000bpd by 2015 and importantly has an array of funding options at its disposal to fund development including the sale of its 20% working interest in the Akri-Bijeel block, debt options and with early production from Shaikan set to reach 40k barrels per day by the first half of 2013 and this could provide valuable cash flows (assuming Baghdad continues payments).As well, these analysts hold out the possibility that the company might yet be "taken-out.""With a hearing on the outstanding Excalibur Ventures litigation set for October 8 in the Commercial Court in London this could mark a watershed in terms of being able to move to the main FTSE index from AIM, and also increases the probability of being taken out," they explain. We maintain our BUY recommendation and target price of 315p which implies a healthy 26% upside from here and reiterate our 450p take-out target, they conclude. AB