Gulf Keystone Petroleum Ltd. isn't in talks regarding a
potential sale of the company, the Kurdistan-focused explorer said
Monday, describing as "unfounded" a U.K. newspaper report it was the
subject of a potential offer from Exxon Mobil Corp. that valued
the AIM-listed company at more than $10 billion.
"Whilst there is clearly increasing interest in the region in
which Gulf Keystone operates, the board is not in discussions with
regard to a sale of the company," said the company in a statement.
Gulf Keystone shares soared 22% in early trade after a report
in U.K. paper the Independent on Sunday said Exxon was considering an
800 pence a share offer for the firm, nearly five times last week's
closing share price. However, the stock shed some of these gains by
midday after a Gulf Keystone executive poured cold water on the rumors,
telling Dow Jones Newswires the Independent story "had no base."
Gulf Keystone shares ended the day up 13 pence, or 7.7%, at
178p. At 1726 GMT, Exxon shares were down 38 cents, or 0.4%, at $79.76.
Exxon said: "It isn't our practice to comment on media
reports, rumors or speculation."
The U.S. oil major last month signed an exploration deal with
the Kurdistan Regional Government, which led to some observers
suggesting a resolution to a long-standing dispute between Baghdad and
Erbil could be in the offing.
Interest in the semiautonomous region's oil fields has until
recently been limited to more prospective explorers like Gulf Keystone,
and Turkey's
Genel Enerji, which was recently bought by ex-BP PLC Chief Executive
Tony Hayward's investment vehicle Vallares. But some large discoveries
and more favorable contracting terms in the region have drawn the
attention of the majors, who have concentrated their efforts in the
country on the giant oil fields in the south.
Analysts and traders said they wouldn't be surprised if a bid
was to emerge for the Bermuda-based explorer, which says its Shaikan
discovery holds between 8 billion and 13.4 billion barrels of oil.
Investec analyst Angus McPhail said although news of a
potential deal was positive, he had his reservations about whether one
would be forthcoming, at least from Exxon.
"Given Exxon have already acquired acreage in Kurdistan it is
somewhat doubtful that they would want to acquire even more acreage
before assessing what they have just acquired," said McPhail.
Traders said talk of a bid highlighted the attractiveness of
Gulf Keystone as an acquisition target.
"A bid has always been on the cards," said a trader, who asked
not to be named. "With their already proven resources, Gulf Keystone
are a nice target for the big boys."