Gulf Keystone takes out injunction against Excalibur

11th Apr 2011 16:05

There has been another twist in the spat between oil explorer Gulf Keystone and Excalibur Ventures, with Gulf taking out an injunction against the advisory services firm.Gulf has obtained an injunction in the English Commercial Court restraining Excalibur from pursuing the International Chamber of Commerce (ICC) arbitration proceedings instituted against Gulf Keystone and two of its subsidiaries on 17 December 2010 in New York.The dispute relates to Excalibur's claim that it introduced Gulf Keystone's management to opportunities in the Kurdistan region of Iran, and that it had a contract with Gulf to jointly develop the area. The English court will determine whether Excalibur's claim to a 30% share in Gulf Keystone's assets in Kurdistan will be upheld. According to broking house Matrix Group: "In a worst-case scenario, if GKP [Gulf Keystone Petroleum] loses this case, our valuation of the stock could be reduced by 50p. This would reduce our total valuation from 190p to 140p. However, this case is likely to drag on for some time, and we think that a risked 10-20p of negativity could be built into the stock medium term."The announcement of the injunction accompanied full year results for 2010 in which Gulf saw losses before tax narrow sharply to $26m from $96.3m in 2009.After a series of fund raising exercises in 2010 the company finished the year with cash and equivalents plus liquid investments $211.4m, up from $19.2m at the end of 2009.As of 5 April 2011 the company had $171.9m of cash and cash equivalents.Matrix said the figures were "not particularly significant for an early stage exploration/appraisal company like GKP," while broker Daniel Stewart calculated that the company should have sufficient financial resources to see it through 2011, a view corroborated by Gulf Keystone's executive chairman and chief executive officer Todd Kozel."With a strengthened balance sheet we are fully funded for the current work programme and are highly confident of continuing to create value for our shareholders and to help the Kurdistan Region of Iraq develop its natural energy resources," Kozell said.---jh