March 13 (Bloomberg) -- Gulf Keystone Petroleum Ltd. fell the most in two years in London trading after the oil producer said its Kurdistan field is smaller than previously estimated.
Total oil in place at the Shaikan field is estimated at 9.2 billion barrels, the company said, after commissioning a so-called competent persons report from ERC Equipoise Ltd. That compares with an earlier estimate of 13.7 billion barrels.
The stock plummeted 16 percent to 120.25 pence, the biggest drop since March 2012, valuing the company at 1.1 billion pounds ($1.8 billion). Volumes traded were nine times the three-month daily average.
“The market is disappointed at the revised oil-in-place figure for Shaikan, which is 30 percent lower than the previous estimate,” said Charlie Sharp, an analyst at Canaccord Genuity Securities Ltd. in London. “The reserves and resources numbers are also substantially lower.”
Gulf Keystone is targeting production from the Shaikan field, its main asset, of 100,000 barrels of oil a day, the Bermuda-based company said. That’s lower than its previous forecast of 150,000 barrels within three years.
Kurdistan, a semi-autonomous region in northern Iraq where the economy has boomed with oil exploration since the fall of Saddam Hussein in 2003, estimates its reserves at 45 billion barrels, enough to meet U.S. needs for almost seven years.
A new pipeline to Turkey provides unhindered access to international markets for the first time after years of disputes with the government in Baghdad over export revenue.
Gulf Keystone, planning to move to London’s main stock exchange this month, is “making progress” in talks on funding the next stage of Shaikan, which will see an additional 60,000 barrels of oil pumped, taking it to its medium-term target of 100,000 barrels, it said today in a separate statement.
The company had to face angry shareholders and a lawsuit by an ex-soldier claiming 30 percent of its main asset, as well as being a possible takeover target last year.
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