GKP Transcript of CNN interview with TK

I took the time to make a transcript of the interview with Todd Kozel on CNN.
I did this because I wanted a quick and easy reference to the words he used, rather than having to watch the interview every time I wanted to confirm a quote. There were a few times that he mumbled, so I can't guarantee that everything is 100% correct, but I believe I got most of it.

Hopefully it will be of use to some of you. Here it is:

CNN – Todd Kozel Interview.

Reporter: One company that is leveraging on the back of Iraq’s energy resources is Gulf Keystone. Established a decade ago, the independent firm ventured into Northern Iraq in 2007. This week, it announced, it had found additional oil, expected to be between 10 and 15 billion barrels. Investors are bullish on the company’s future and share price has sky-rocketed from 4p to a high of 103p, within the past year. I sat down with the Executive Chairman, Todd Kozel and asked him about the company’s newfound success.

Todd Kozel:What we have discovered is something that is an oil man’s dream, you know, you read about these things from 1900, 1920s, 1930s; at 3000m onshore, to find what is a 2 to 5 billion barrel oilfield now, which has the potential on Shaikan number 1, to get in the 10 to 15 billion range, it’s just unheard of… it’s exciting stuff. It has taken our Market Cap, in the last three months, from £45million to almost £600million, and we’ve only drilled our first well.

Reporter:It’s fascinating, because even in the London Market, they’re talking about the Gulf Keystone Effect, because of the run-up of the stock and then the momentum investors coming behind it. How do you manage expectations from what was truly a micro-cap stock into something now that is part of the common vernacular in terms of trading?

Todd Kozel:We’ve had to be careful drilling this well. This well has encountered oil since 30 days after we started drilling. We’ve had to take a position early on, that newsflow is announced when possible, just the basic facts, manage people’s expectations, keep the Markets informed, and don’t let the story run away with itself. We brought in… We even brought in third parties to do reserve estimates and engineering reports, at a very early stage, which is not customary normally within our business, because… not because we needed to know that information, we need to accurately translate that information to the investing public.

Reporter:There’s a huge question, as you know. What is Kurdish oil? What is National Government oil for the government of Iraq? When you come to production, how are you going to manage the politics of what share goes to the National Government?

Todd Kozel:I do not see that there is a division of the view on who owns what oil. My view, and my understanding of the Kurdish position, is that this is Iraq’s oil and a percentage of the profits of the share of that oil, by agreement, will be sent to Kurdistan. Our oil, under Contract, will be sold by State Marketing and Baghdad; we shall receive our share under the Contract, the government of Kurdistan is happy to receive their share, the remaining shares are divided however the Central Government has their agreements, and so forth.

Reporter:You have a property in Algeria, you’ve got to development, in terms of natural gas, but you’re not going to stay in Algeria, you’re finding it too politically difficult?

Todd Kozel:As a small oil company, as any oil company, you high-grade your prospects, you know, where are my dollars best spent? Kurdistan, we have discovered just about 25million barrels of oil a day, for a $30million well. Our project in Algeria, or two projects combined in Algeria are 70million barrels to our interest. So for our shareholders money, we’re discovering a lot more oil, incurring a lot more value, in Kurdistan. So, therefore that’s where we need to focus.

Reporter:To actually produce this field then, you’re going to need a Capital Injection from a major oil company. You’re going to need about $120million over the next year.

Todd Kozel:We’re the most popular person at the dance right now.

Reporter:Meaning you’re getting a lot of attention?

Todd Kozel:Three months ago, six months ago, it was very difficult to get people talking about financing a company, not just Gulf Keystone, but any of the small-cap, mid-cap oil companies, exploration companies. We have all the attention we need, we’ve got our current shareholders, of which the management and the Board are an unusually large piece. Our Institutional shareholders are all very supportive and that’s probably where we’ll go to raise that Capital.

Reporter:You’re going to be an independent company in six months time?

Todd Kozel:Six months, YES! Indefinitely… erm! The amount of reserves we’ve got and what it’s going to take if we want to fast-track to full production from the four Licences and the potential from the Licences; it will be increasingly difficult to keep up with it financially, and with Human Resources, technology, engineering. It’s bigger than Gulf Keystone is now, but we’re growing into it quickly.