Gulf Keystone Petroleum Launches $200 Million Convertible Bond Offer

LONDON -- Gulf Keystone Petroleum  (LSE: GKP.L  ) slipped 6 pence, or 3%, to 223 pence in early trade this morning after announcing the launch of a convertible bond offer.

The oil explorer -- a favorite among many private investors -- said the bonds would raise between $200 million and $250 million and mature during October 2017.

The firm also said the bonds were expected to carry a coupon of between 5.875% and 6.625% per annum, and have a conversion price set between 25% and 30% higher than the price seen during today's trading.

Todd Kozel, Gulf Keystone's chief executive, commented:

We welcome this important financing initiative, which, in addition to being an important milestone for the Company in support of our transition from the exploration and appraisal phase to the fully fledged development of the world-class Shaikan discovery, shows an increasing confidence of international markets in doing business in the Kurdistan Region of Iraq.

Gulf Keystone said the bonds, together with the company's existing cash resources of $137 million, would help fund a "large-scale staged development" at its Kurdistan oil discovery during 2013. The group's goal is to produce 150,000 barrels of oil a day by 2015.

Gulf Keystone's Shaikan block was declared a commercial discovery in August this year and is estimated to contain 13 billion barrels of oil.

The discovery currently underpins Gulf Keystone's £2 billion market cap and position as one of the largest companies traded on AIM.

The discovery has also supported a meteoric share price rise. Since March 2009, Gulf Keystone's shares have jumped from 5 pence to as high as 425 pence on the prospect of the Shaikan field becoming a cash flow bonanza.

Certainly an 85-fold return in less than four years shows the resources sector can produce wealth-changing gains to ambitious investors.

That's why The Motley Fool has published an exclusive free report to help you lock in such profits.

Download "How to Unearth Great Oil and Gas Shares" and we'll show you how to evaluate an explorer's prospects and what to look for before pressing the "buy" button. The special report also highlights an area of the industry that could expand rapidly in the years to come.

Investing is by no means easy in today's uncertain economy. That's why we've published "Three Top Sectors" -- our guide to three favorable industries for long-haul investors. This free report will be dispatched immediately to your inbox.

Further Motley Fool investment opportunities:

Maynard Paton does not own any share mentioned in this article. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2043763, ~/Articles/ArticleHandler.aspx, 8/31/2014 12:54:19 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement