Would A Martian Buy Gulf Keystone Petroleum Limited?

Would A Martian Buy Gulf Keystone Petroleum Limited?

Onshore oil installationFind me a more opinionated bunch of investors than Gulf Keystone Petroleum Limited (LON:GKP) shareholders (and their oppos in the ‘bargepole’ camp), and I’ll be amazed.

The company regularly tops the list of most active forums on the ADVFN website, and is also often one of the monthly most traded stocks at retail brokers like TD Direct.

The bull story is simple, if a little more protracted than usual: GKP has a whopper of an oil field, and sooner or later (preferably sooner) a big oil company will come along and write out a fat cheque, making all the GKP shareholders rich.

The problem is that there’s far too much historical framing and loss aversion going on, in my view. How many of today’s GKP shareholders would invest in the firm today, at today’s price?

Come to that, what would be a reasonable price?

In a new article for the Motley Fool, I’ve taken an initial stab at valuing GKP’s business using industry-standard metrics that enable comparisons to other comparable businesses.

I hope the results won’t surprise you too much, but they might — click here to read the full article.

Disclaimer: This article is provided for information only and is not intended as investment advice. The author may own shares in the companies mentioned in the article. Do your own research or seek qualified professional advice before making any purchase decisions.