The share price of Gulf Keystone Petroleum (LSE: GKP) (NASDAQOTH: GFKSY.US) — the oil & gas exploration and production company with operations in the troubled Kurdistan region of Iraq — is currently up 8%. The rise is a reaction to the news that Excalibur Ventures has confirmed that it does not propose to appeal the summary judgement of the English Commercial Court, which the court dismissed all of the claims asserted by Excalibur Ventures against Gulf Keystone. Furthermore, Excalibur has agreed to an interim payment towards Gulf Keystone’s legal costs, which amount to £17.5m in total.
Excalibur Ventures’ decision not to appeal brings to an end a very long period of uncertainty for Gulf Keystone and its shareholders, during which 30% of its interests in the Shaikan oil field — the world’s largest, onshore, independent oil field — was in jeopardy. Gulf Keystone can now focus on meeting its target of 150,000 barrels of oil per day (bopd) of production from the field to be reached within three years, which it announced following the approval of the Shaikan Field Development Plan, which happened at the end of June 2013.
The conclusion of the Excalibur Ventures litigation also finally clears the way for Gulf Keystone’s move to the main market of the London Stock Exchange, delayed from its earlier schedule of the end of this year, which the company says it expects to complete “as soon as practicable” in 2014.
Despite this morning’s jump, and some ups and downs along the way, Gulf Keystone’s share price remains the same as it was at the start of 2013. However, long-term shareholders have been amply rewarded by a gain in excess of 950% over the past five years.