Gulf Keystone Says In Preliminary Talks Over Potential Sale
Feb 25 (Reuters) - Oil producer Gulf Keystone Petroleum Ltd , battered by a slump in oil prices and delayed payments, said it was in talks with a number of parties about a possible sale of the company or some asset transactions.
The company's stock rose as much as 73 percent to 61.36 pence, making it the top percentage gainer on the London Stock Exchange.
Gulf Keystone, which operates mainly in Iraqi Kurdistan, said the discussions were preliminary and that it had appointed Deutsche Bank and Perella Weinberg Partners as financial advisers.
Macquarie Research analyst David Farrell said he did not expect the company to fetch much more than its current market value given oil prices and the current capex austerity environment.
Gulf Keystone was valued at about 317 million pounds ($492 million) at Tuesday's close. It had total debt of $575 million.
A steep slide in oil prices has made production more expensive, forcing many cash-strapped commodity companies to delay projects and consider strategic options.
Gulf Keystone's funding woes have been aggravated by a delay in receiving oil export payments from the Kurdistan government.
A lack of steady payments had prompted the company to suspend trucked exports of crude from the Shaikan block in northern Iraq.
Iraq's central government reinstated budget allocations to the autonomous authority late last year.
The company said on Wednesday that it expected a payment of $20.8 million related to crude oil sales from the Shaikan block shortly, which an industry source said was being made by the regional government.
Gulf Keystone said it had cash balances of $69.3 million.
Macquarie's Farrell named Hungarian oil company MOL Plc , Gulf Keystone's partner on the Shaikan and Akri-Bijeel blocks, as a likely bidder. Gulf Keystone has been reviewing options for its 20 percent stake in Akri-Bijeel since August.
However, a source close to the matter said MOL was not interested in buying Gulf Keystone.
State-owned oil companies could also be interested in purchasing the oil producer, two analysts said.
They added that even though large companies such as Chevron , Exxon Mobil and Total had the necessary firepower and regional exposure to make the buy, board approval would be difficult in the current oil market.
Exxon Mobil said it did not comment on market speculation. Chevron and Total did not immediately respond to requests for comment.
(1 dollar = 0.6445 pound)
(Editing by Ted Kerr and Maju Samuel)
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