Oil explorer Gulf Keystone Petroleum has won a long running court case which could lead to takeover interest from major rivals.
A judge in London dismissed a claim by US-based Excalibur Ventures that it had the right to 30% of Gulf's assets in northern Iraq. The case has been overshadowing Gulf for three years, but now it has been resolved analysts believe it could be attractive to larger rivals wanting to increase their presence in the region.
Gulf's shares - which were suspended ahead of the judgement - are expected to jump from 187.75p to 224p when trading restarts.
Ahead of the judgement, analyst Sam Wahab at Cantor Fitzgerald said:
The company's share price has rallied in recent weeks in expectation of a positive outcome, which we do not feel is unwarranted given our long held view regarding the futility of Excalibur's claims. In our view, any decision that does not involve Gulf Keystone relinquishing 30% of its working interests in its Kurdish assets will be viewed as a positive by the market, in which case the current share price trend will likely continue.
Operationally, Gulf Keystone's flagship Shaikan field will soon ramp up to 20,000 barrels of oil a day with long term projections slated to be in the region of 100,000 barrels. This would place the company as a significant contributor to oil production in Kurdistan against a backdrop of an emerging strategic political relationship between Kurdistan and Turkey. We retain our buy recommendation and target price of 235p.
Update
Gulf Keystone's shares have returned from suspension and are now 27% higher at 239p, having opened at 235p.
