How to Trade Oil & Gas p7

Gulf Keystone Petroleum (GKP)

Where next for GKP shares?

Heavily discounted GKP and fellow Iraqi Kurdistan-based peers are hardly a hot prospect for prowling oil majors given the instability in the region – not much chance of an M&A boost here.
However, GKP’s share price has suffered from a prolonged revenue sharing dispute, which now looks to be sorting itself out, so a move back towards pre-dispute levels could emerge as debts are repaid and production increases.

Will shares in Gulf Keystone Petroleum (GKP) rally towards the highs of 82p or fall towards lows of 20p?

Deposit requirement: 15%

A £45,000 long position (196,080 shares) can be secured for £7,500* with a CFD and the trader might only look for a re-test of 3 month resistance 35p, implying a 35% profit.

Going short at the current price, a potential target would be 5-year lows 20p on a generally bearish outlook for crude prices and M&A hopes being pinned elsewhere in the sector. In this case, a 23% return might be realised.

Broker Consensus: 40% Buy, 20% Hold, 40% Sell

Average 12-month broker target price: 54p

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This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.

Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance. Prepared by Michael van Dulken, Head of Research

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