Broker snap: Much already priced in at Gulf Keystone, says Evolution

14th Sep 2011 10:57

Evolution Securities has confirmed an add rating on Iraq-focused oil and gas group Gulf Keystone after the firm announced a significant increase in oil-in-place reserves in its half-year report. The company announced a 150% increase in proven reserves (P90) and a 45% increase in possible reserves (P10) for the Shaikan discovery, meaning that the range of reserves is now between 4.9bn - 10.8bn barrels (P90 - P10). By 10:55 on Wednesday, shares were 9.25% higher at 171.25p. The share price is now 35% higher over the last month, with speculation that it was putting itself up for sale pressuring up shares in late August. However, on 30 August, the firm denied reports that it was looking to set up a deal that could value the firm at up to £1.4bn. "Progress has been swift and numbers look very encouraging, but the recent rapid rise in the share price suggests much has already been priced in," said analyst Richard Griffith.Evolution maintains its target price of 200p.BC