Fox-Davies Capital Daily Newsflash including Gulf Keystone Petroleum, Ascent Resources, Global Energy Development and Platinum Australia

Gulf Keystone (GKP) has negotiated with the Kurdistan Regional Government (KRG) to reorganise the Company's interest in Gulf Keystone Petroleum International (GKPI) following a material default by ETAMIC.
Under the agreement the 50% shareholding of GKPI held by ETAMIC reverts to GKP. GKPI will then be a 100% subsidiary of GKP. GKPI will pay $40m to the KRG which is an Infrastructure Support Payment due and owing by ETAMIC, in return for GKPI maintaining its 80% interest in Sheikh Adi and 40% interest in Ber Bahr. Gulf Keystone will make a termination payment of $12m to ETAMIC in full and final settlement of all of their rights. The KRG shall also be entitled to receive an Additional Infrastructure Support Payment to be allocated to social programs, amounting to 40% of GKPI's entitlement to Profit Petroleum derived from GKPI's share of profits in all four production sharing contracts.

Gulf Keystone also announced that Kalegran Ltd., a 100% subsidiary of MOL Hungarian Oil and Gas Plc. and the operator of the Akri Bijeel block in Kurdistan, concluded a successful oil test in the Bijeel-1 exploration well in the Akri Bijeel block. The tested zone is in the upper Jurassic and flowed at rates of up to 3,200 bopd with associated gas rates of 933,000scf/d. Oil gravity was 18oAPI and flowing wellhead pressure was 420 psi on a 48/64" choke. Drilling operations are still in line with previously announced plans, following completion of the full test cycle, drilling will resume from the current depth of 3831m to a final planned depth of approximately 4400m, pending actual well results.

Comment: The first announcement is a positive development for Gulf Keystone with a net value benefit that we estimate to be about US$225m. Another positive is that it removes Etamic, an unknown quantity, as a joint venture partner. Offsetting those positives is the requirement for additional funding to cover projects costs, those costs are fully recoverable once production starts under PSC terms but will necessitate a higher capital increase than initially anticipated. The second announcement is great news, despite the small fully diluted interest for the Company in the licence, as it de-risks the two other nearby licences of Sheikh Adi and Ber Bahr in which Gulf Keystone has a substantial interest. We estimate the risked contribution from Akri Bijeel to our risked NAV at 5p per share. Following those two events we remain extremely confident on the stock and retain our Buy rating and 200p price target.

Ascent Resources (AST) through its subsidiary PetroHungaria kft, has successfully tested and completed the PEN-101 well, in the Penészlek area of the Nyírség exploration permits in eastern Hungary. Once the rig has departed the site, the PEN-105 well will commence production to sales. Initial production rates achieved during preliminary testing exceeded 1mmscfd, and productivity is expected to be improved in the coming days by the use of small scale acid stimulation, similar to that used with good results on the PEN-105 well.

Comment: This result is in line with our expectation and we remain positive on the stock.

Global Energy Development (GED) announced that rig mobilisation has commenced to the Rio Verde 2 exploratory well within the Colombian Rio Verde contract. The well has a proposed total depth of approximately 12,500ft and will target three different formations - Mirador, Gatcheta and Ubaque - all being proved formations with other wells inside the contract area. The well is expected to be spudded late March and drilled, completed and tested prior to May 2010.

Platinum Australia (PLAA) announced that underground mining operations recommenced at the Smokey Hills Mine on Monday. This follows the mining contractor, Redpath Mining, completing the appeal process for approximately 70% of the employees, who have been re-employed and have recommenced work. These employees had been dismissed for participating in unprotected industrial action at the mine. The appeal process for the balance of the workforce should be completed by the end of the week. The crushing plant is now operating at full capacity and the Company anticipates restarting the milling and flotation plant today.

http://www.proactiveinvestors.co.uk/companies/news/14232/fox-davies-capital-daily-newsflash-including-gulf-keystone-petroleum-ascent-resources-global-energy-development-and-platinum-australia-14232.html