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Gulf Keystone - Tick Tock Tick Tock it is one minute to midnight

By Tom Winnifrith | Monday 13 June 2016

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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.

There is massive speculation about Gulf Keystone (GKP) on the Bulletin Boards and I see that the shares are ahead at 4.2p today. But there are only two facts and I remind you of both as the clock is ticking, it is 11.59 Pm and at midnight shares in this company are likely to go pop.

Fact one: Negotiations with bondholders regarding Gulf's default on interest payments and its clear inability to repay capital next year have been extended until 13 June. It is 13 June today. So expect an RNS soon.

Fact two: Gulf has already made it clear that it needs a massive capital reconstruction which means mega dilution for shareholders. The only issue is how much. That is IF talks succeed. If they fail then this is an exact re-run of Afren and it is 0p here we come. If they succeed then it is Afren part one so that makes it perhaps 1p. Some loons (tweeter Paul Curtis whose record in calling this wrong is almost perfect) reckon 2p. Others - Evil Banksta - reckon 0.5p.

It matters little whether Evil Banksta is correct, as he often is, or Curtis is correct for almost the first time in history. The point is that at 4.2p the shares remain a slam dunk sell but time is running out fast.

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