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Gulf Keystone still a storming short

By Lucian Miers | Saturday 14 March 2015


Disclosure: The author has a short position in one or more of the shares mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


Gulf Keystone (GKP) reminded potential suitors on Thursday why there was no reason to pay top dollar for it with the news that permission was needed from the 13% bondholders to avert the exercise of a put option which has been triggered by a fall in its asset value.

Embedded in the statement was an admission that oil production had halted since mid-February and that an equity raise was amongst the options being considered to make good the intention to meet debt obligations.

As I have said repeatedly in the past, it is rarely good news for shareholders when debt holders are messed with, or asked to move the goal posts.

I have heard many convoluted theories of late as to why the KRG wants Gulf to be sold for a lot in order to set a good benchmark for it to sell more licences but I don't buy it. I wouldn't class Gulf in the same league of desperation as Afren but I am more than happy to stay short at 36p.

My fundamental target is close to 10p.

This article first appeared  on the Nifty Fifty website run by Tom Winnifrith, Steve Moore and Lucian Miers - sorry paying customers come first. To read Lucian's next shorting idea next week and to catch the next value investment share tip from Tom & Steve out shortly click HERE


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