Gulf Keystone stock surges after denying report of Exxon takeover offer

By Brien Southward

Gulf Keystone’s stock has surged as much as 33% after denying reports released by The Independent on Sunday that Exxon was considering an $11 billion takeover bid.

Bermuda-based Gulf Keystone is extensively involved in exploring Iraq’s Kurdistan region, which has been an object of intense interest in recent years. Exxon, the world’s largest oil company, became the latest company to expand its operations into the region in November 2011.

Gulf Keystone’s stock, which is listed in the London Stock Exchange, surged as high as 219.75 pence, the highest it has reached since it was first listed in 2004, closing at 178.25 pence, nearly an 8% increase.

Kurdistan, which may hold as much as 40% of of Iraq’s oil reserves, has allured many smaller companies since the fall of Saddam Hussein’s regime in 2003. Now that the United States’ military involvement in Iraq has come to a close and the country has made progress towards political and economic stability, the involvement of a company the size of Exxon could be a strong sign of the region’s growing strategic importance.

For the time being, however, reports that Exxon is interested in a takeover bid of Gulf Keystone have been resolutely denied. In a report titled Response to Press Speculation, Gulf Keystone says that “Whilst there is clearly increasing interest in the region in which Gulf Keystone operates, the Board is not in discussions with regard to a sale of the Company.”

According to the report, the Board of Gulf Keystone “confirms that it remains committed to creating value for shareholders, via the continuing 2011/2012 exploration and appraisal programme on its world-class assets in the Kurdistan Region of Iraq.”

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