Bloomberg News

Gulf Keystone Jumps on Report Exxon Considering Making Offer

December 20, 2011

(Updates with company comments in fifth paragraph.)

Dec. 19 (Bloomberg) -- Gulf Keystone Petroleum Ltd. rose to a record in London trading after a report that Exxon Mobil Corp. is considering a 7 billion-pound ($11 billion) takeover offer for the oil producer that’s active in Iraq’s Kurdistan region.

Gulf Keystone surged as much as 33 percent to 219.75 pence, the highest since the company listed in 2004. The shares were at 197 pence as of 9:15 a.m. local time, giving the Bermuda-based company a market value of 1.7 billion pounds.

Exxon, the world’s largest oil company, is weighing a bid that would value Gulf Keystone at about eight pounds a share, the Independent on Sunday reported, without saying where it got the information.

Last month, Exxon became the latest explorer to join the hunt for oil and gas in Iraq’s semi-autonomous Kurdish region, home to about 40 percent of Iraq’s estimated 115 billion barrels of reserves. Gulf Keystone has announced the discovery of as much as 10 billion barrels of oil in northern Iraq’s Shaikan field.

Henry Lerwill, a spokesman for Gulf Keystone in London, declined to comment. Emma Heywood, a U.K.-based spokeswoman for Exxon, referred questions to company headquarters in Irving, Texas.

Kurdistan has attracted interest from small- and mid-sized foreign explorers since the fall of Saddam Hussein in 2003 opened the region for the first time in decades.

The Iraqi central government in Baghdad said this month it will uphold agreements with Exxon “for now” after the company signed energy contracts the government considers illegal with the Kurdish region. Kurdistan and Iraq have yet to determine how oil revenues will be split.

--Editors: Stephen Cunningham, Tony Barrett.

To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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