GeoGlobal GSPC Jean Paul Roy Modi Dispute

Yesterday that was a comprehensive article in India's Economic Times about GeoGlobal Resources (GGR) problems in India with GSPC, the Gujarat State Petroleum Corp, and Jean Paul Roy, GGR's former CEO.   The way things are in India, I've reposted most of the article below in the event it "vanishes."

GeoGlobal’s Jean Paul Roy, who part-owns GSPC blocks, has a history of controversies

AHMEDABAD: Jean Paul Roy, a Canadian geologist who lives in Guatemala and drives around in a Scorpio, has been a bee in Narendra Modi's bonnet long before Arvind Kejriwal discovered him and alleged the scientist made billions overnight thanks to sweetheart oil and gas deals with the Gujarat government.

Actually, Roy has been embroiled in several disputes with state authorities, particularly after he publicly questioned Modi's dramatic announcement in 2005 that Gujarat State Petroleum Corp's (GSPC) field in the KG Basin held an astonishing 20 trillion cubic feet (tcf) of gas. Roy, a 10% partner in the block and a seasoned geologist who has explored hydrocarbons in 30 countries, quickly responded saying Modi's claim was premature.

Relations between the two partners have been troubled since then, and GSPC wrote to the oil ministry two years ago saying it wants to terminate the partnership with GeoGlobal.

Roy's company has questioned some costly drilling by the state firm, which has spent $2.5 billion but is five years behind schedule in developing the field.

"Roy impressed GSPC, and the company decided to partner with his consulting venture that was to be listed later in America. Like CairnBSE 0.17 %, Roy also had ambitions to list his venture in India. But everything changed in 2005," says a senior GSPC official who did not want to be named.

Roy, who speaks French, Spanish and English, is regarded by friends as a man with an eagle eye for discovering oil as well as people who matter. Former ONGCBSE 0.28 % chief Subir Raha was on GeoGlobal's board till his death two years ago. Earlier, the company had appointed Avinash Chandra, former director-general of hydrocarbons, a director.

Roy's innings in India began as a technical advisor to Canadian company Niko Resources, which was exploring the Hazira offshore field in partnership with GSPC. He also advised, say his associates, Niko during the discovery of the D6 Block, now controlled by Reliance IndustriesBSE 1.29 % and BP.

But his luck seems to have suddenly run out. He has diluted his majority stake in GeoGlobal Resources, although he still holds 5% interest in the KG Basin block.

It is no wonder the stock hit 5¢ today before rebounding 60% as I type!!

More GGR Charts and Quote

Jim Cramer Recommends Gold and Gold Corp.

Update 7/29/13:

• Jim Cramer's "Action Alerts Plus" Charitable Trust Performance: 2013

Today on CNBC's "Street Signs" at about 11:30AM PST Amanda Drury interviewed Jim Cramer for their regular "stop trading" segment.  Gold (Quote and Chart) closed at $1,410.90 per ounce near its all time high.

Jim Cramer was very excited about Gold.  Cramer said

• "I've been a gold bug since 'Mad Money" began.
• EVERYONE should have ten to twenty percent of their portfolios in gold.
• Gold is "extraordinarily poised to go up better than ANY OTHER ASSET in the world."
• Gold "could see $1,550 very quickly"
• Gold "could" see $2,000 per ounce within 18 months.
• "They can't find the stuff."
• EVERYONE must own gold!
• "Gold is your antidote to what is going on.... Chaos in Washington.  Chaos in the Middle East."

Today Gold closed at $1,410.90 per ounce near its all time high.

When asked what he liked for a stock pick, Jim recommended Goldcorp (GG).  Jim said he likes GG because of their low p[roduction costs and "ability to find the stuff."

Today GG closed at $49.34, slightly below its all time high

I wonder how many people will add Gold or Goldcorp to their portfolios now near all time record highs based on Jim's advice.

Questions:

1. Can anyone verify that Cramer has been a gold bug since his Mad Money show began?  
2. Has Cramer had Gold in his action alerts portfolio for 10 to 20% from the start? 
3. Was it a small position that grew with the large gain in gold? 
   Or 
4. did he add Gold recently?

Personally, I own a very small amount of gold hidden in the house for bribes if we see Armageddon, but I own "treasury inflation protected securities" (TIPS) mutual funds (like the ETF TIP or managed funds FINPX, VIPSX) and Series I-Bonds, as well as individual TIPS. I also believe it is a good time to own equities, including SPY, the exchange traded fund for the S&P500, for both inflation protection and income.

The individual 30-yr TIPS I said I was buying in "How to Play Expected Inflation From the TIPS Spread" are up about 6% in just two weeks already. I am not making any predictions for the price of Gold, but individual TIPS bought directly from the US Treasury are safe since they won't lose money if the price of gold crashes.

More Information:

• Gold Charts and Quote
• TIPS Funds: FINPX and VIPSX  
• Amanda Drury Fan Club

More pictures of Mandy Drury

GeoGlobal GSPC Carried Interest Dispute Update

This is an update on the "carried interest dispute" between GeoGlobal Resources (GGR Charts and current Quote) and the Gujarat State Petroleum Corporation.

Background: 

GeoGlobal Resources (Ticker GGR) is a Canadian based oil and natural gas exploration company listed on the American Stock Exchange.

GSPC  is Gujarat State Petroleum Corporation, a state owned oil company in India that had to put its planned IPO on hold, possibly due to the way it treats its partners.

GGR has a 10% "carried interest" in the KG exploration block in the deep waters off the shores of India.  This means it pays none of the costs of exploration until there is cash flow from the discovery to pay its share of the costs.  This "carried interest" was payment for GGR's expertise in finding hydrocarbons.  GGR will only see revenue after its share is fully repaid to the major "operating" partner, GSPC.  Some time ago, GSPC got political pressure for "giving away too much" to GGR but this was well after the KG discovery was declared a "major discovery."

Here is the latest via email from indianpetro.com and my thoughts.  The links to "details" require a paid subscription to read which I do not have.  Since GGR is listed on the American Stock Exchange, I rely of formal SEC filings mostly.

Fracas continues at KG-OSN-2001/3

Part-I: GeoGlobal complains about being kept out of the loop by GSPC

Nov 8: The fracas over multiple issues at the KG-OSN-2001/3 block is showing no signs of abating. GeoGlobal Resources (GGR) -- technical partner and 10% stakeholder in the block -- has written a strongly worded letter to the management committee (MC) for the block, accusing GSPC (Gujarat State Petroleum Corporation) of going ahead with operations in the block without due intimation to its partner.

Webster: intimation- 

#1 to make known especially publicly or formally

#2  to communicate delicately and indirectly

GSPC had asked GGR to participate in the MC meeting for the block, but only to discuss a single item on the agenda, dealing with cessation of the Canadian E&P major's participating interest (PI) in the block. The Indian PSU wants GGR's stake to be terminated due to alleged inaccuracies in the technical studies conducted by the latter on the block.

GGR opined that as a member of the operating committee (OC) for the block, it had full rights to be intimated about all agenda points and provide its opinion on the same. Not adhering to this implied that GSPC's actions were in "complete derogation" of the provisions in Article 6.7 of the production sharing contract (PSC) for the block, which states that "...the Secretary shall forward the agenda to the members at least nine days prior to the date fixed for the meeting..."

The company also pointed out that Jubilant -- the other 10% stakeholder at the block -- had no(t) received any intimation about the agenda point on cessation of GGR's stake. This reinforced the fact that the item had never been placed before the OC for its approval, contrary to PSC stipulations.

GGR said that GSPC's assumption that the former was a "defaulter" was presumptuous at best and could even be proved completely wrong.

In view of this GGR has proposed a specific agenda point for the MC meeting. The item reads, "to discuss and decide on the purported action of GSPC taken vide its letter dated August 18, 2010, to GGR". GGR has further requested that the scheduled date of the MC meeting should be pushed back to a more suitable date, allowing time for GGR to present its case on all the agenda items in the meeting.   (Click on Details for more information) Details

Fracas continues at KG-OSN-2001/3

Part-II: GSPC claims it has followed PSC provisions to the letter

Nov 8: Gujarat State Petroleum Corporation (GSPC) has refuted the claims put forward by GeoGlobal Resources (GGR) saying that it was in no way violating the provisions of the PSC (production sharing contract) and JOA (joint operating agreement) signed for the KG-OSN-2001/3 block.

GSPC pointed out that article 5.6 of the JOA stipulates that approval of the OC (operating committee) requires a minimum affirmative vote of only 70% while GSPC itself held 80% stake at the block. Such decisions are final and binding on all parties. Therefore, no separate approval would be required from the other parties (Jubilant or GGR) for passing an OC resolution.

Moreover, the state-run oil major said that it had notified the government regarding the cessation of GGR's participating interest (PI) at the block, in strict adherence to PSC provisions. GSPC also claimed that Jubilant had also been informed of the move through a copy of the letter sent to the government.

GSPC also claimed that according to article 6.16 of the PSC, the management committee (excluding GGR representatives) had full rights to decide on the participation of the "defaulting party", that is, GeoGlobal, but only after hearing out GGR's views on the matter.

GSPC said that GGR would be given ample opportunity to present its case before the MC. However, the scheduled date for the MC meeting should not be postponed keeping in mind that GGR was informed about the issue well in advance and further delays would unnecessarily hamper work progress in this block.  (Click on Details for more information) Details

Fracas continues at KG-OSN-2001/3
Part-III: DGH says exploration period cannot be extended without definite work programme and budget

Nov 8: Not only is GSPC finding it difficult to push through the proposed cessation of GeoGlobal's 10% stake in the KG-OSN-2001/3 block, but it is also facing flak from the DGH (Directorate General of Hydrocarbons) on extending the exploration period at the block for integrated appraisal of five discoveries in the block.

The DGH has said that the terms of the PSC (production sharing contract) stipulate that the contractor has to submit a detailed programme (including a work programme and budget) for carrying out integrated appraisal of the discoveries.

Without this, the upstream regulator said that it could not recommend extension of the exploration period, no matter how many requests were put in by the operator. Therefore, it is imperative for GSPC to immediately submit the requisite work programme and budget if the request for extension was to be considered favorably by the DGH.

Readers will recall that GSPC has been persistently requesting for a 30-month extension in the exploration period in order to appraise the discoveries that have been made in the block. The operator has made five discoveries in this block, including the "KG-16" in DeenDayal East (DDE), the "KG-22" in DeenDayal North (DDN), the "KG-21" in DeenDayal West DownThrown (DDW-DT) and the "KG-19" and "KG-20SS" in the Base Raghavpuram Unit (BRU) structure.

It is difficult to appraise the data without the help from GGR. Reports I've read elsewhere say GGR stopped helping GSPC find hydrocarbons and won't help until this carried interest dispute is resolved.  That is GGR won't work for free.

GSPC has recently proposed that the appraisal, declaration of commerciality (DoC) and field development plan (FDP) for all these discoveries should be carried out in an integrated and cost-effective manner in order to conceptualise and implement the optimal development strategy for the block. 

Pertinently, the KG-20SS well is an additional well, that is, it was drilled over and above the minimum work programme (MWP) that was specified for the block. (Click on Details for more information) Details 

Disclaimers:

#1   I have made a lot of money for myself and my newsletter subscribers over the years with GeoGlobal Resources stock (GGR Charts and current Quote).  I bought shares as low as 20¢ a decade ago (Nov. 22, 2000).   I have been on "house money" since 2005. I added shares at 90¢ on 12/31/04 tax loss selling to reach 9,000 shares.  By my final sale in 2005 at $13.42, my position was only 2,400 shares with $32,415 in profits taken out from selling.  Since then, I have traded around this core position to run it up to 8,900 shares now with $25,810 cash taken out as I am now loading up for the next run.

#2  As of 08/26/10 I have a $25,810 cash, all pure profit! Plus I currently have 8,900 shares. GGR could drop to zero overnight and I'd still have the cash profits!

#3 I started with a negative $10,005 balance and held 3,330 shares with a cost basis of $3.00 per share back in 1999 when the company was an internet stock with the ticker BOWG.
#4 I took massive profits in 2005 to lock in nice gains. 
#5 Now GGR has joined the ranks of stocks like LRCX that are more like ATM machines - all on house money where I try to continue to grow the total dollars taken out using share price volatility.

For commentary and my current outlook for GGR, read "Kirk's Investment Newsletter"

 More GGR Charts

GGR: GeoGlobal Resources Inc. - Technical Analysis: Golden Cross & Rounding Bottom Patterns

GeoGlobal Resources Inc. (GGR Charts) is about to make a "Golden Cross" chart pattern. This is where its 50-day moving average crosses above its 200-day moving average.

Click chart courtesy of stockcharts.com for full size image

I show the 50 and 200 DMA now at $1.06. With GGR trading now at $1.18, the 50 DMA should be higher tomorrow (or very soon) for an official crossing.

A Golden Crossing should show up on all sorts of trader charts so I expect money could surge into the stock. Grab your stocks and pull up your socks.....

As you can see from this longer term chart, GeoGlobal is also making a beautiful rounding bottom pattern. Also bullish is GGR appears to have successfully tested its 50 DMA which has switched from resistance to support.

Click chart courtesy of stockcharts.com for full size image

I added shares of GGR to my personal and newsletter portfolios under a buck in August (80¢ in my newsletter and ROTH portfolios) so I'm ready to go higher. I am pleased those August lows held (so far) in this recent correction.

More information

• Definition of Golden Cross pattern
  
  
• More GGR Charts

GeoGlobal Trading Success: This is a good money maker stock if you have the patience to buy when cheap and sell when very high. In my newsletter portfolio I have generated $18,276 cash, all pure profit from GGR plus I have 7,900 shares on "house money." GGR could drop to zero overnight and I'd still have profits of $18,276! I first started writing about and trading GeoGlobal about 10 years ago when it was Suite101.com/BOWG.

11/21/09 Update. GGR Closed Friday at $2.72. I took profits in my newsletter and personal portfolios at $2.75.

As of Nov. 11, 2009, "Kirk's Newsletter Explore Portfolio" is up 29.1% YTD vs. DJIA up 17.6% YTD

Subscribe NOW and get the November 2009 Issue for FREE! !
(Your 1 year, 12 issue subscription will start with next month's issue.)

Disclaimer: I am locked and loaded with shares added to personal and newsletter portfolios at 80¢. I have long-term shares purchased as low as 12¢ in my personal portfolio. I have plans in place to sell shares at preset, but significantly higher prices listed in my newsletter. If my outlook changes, I may sell sooner and announce it to my subscribers.

From 1/1/1999 Through 11/09/09

Kirk's 80:20 Aggressive Core Portfolio is up 50.9%
Kirk's 50:50 Conservative Core Portfolio is up 67.3%
Kirk's typically 70:30 Explore Portfolio is up 142.3%
80% Core Aggressive plus 20% Explore is up 69.1%
90% Core Conservative plus 10% Explore is up 74.8%

100% Total Stock Market (VTSMX) is up 18.2%
100% Total Bond Market (VBMFX) is up 77.7%
80% VTSMX and 20% VBMFX is up 30.1%
50% VTSMX and 50% VBMFX is up 47.9%

YTD through 11/09/09

Kirk's 80:20 Aggressive Core Portfolio is up 23.1%
Kirk's 50:50 Conservative Core Portfolio is up 16.5%
Kirk's typically 70:30 Explore Portfolio is up 24.8%

Subscribe to "Kirk Lindstrom's Investment Letter" and get the November issue for free today!

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GeoGlobal Exploration Activities Update

PRESS RELEASE: (KirkLindstrom.blogspot.com Sept. 1, 2009) - GeoGlobal Resources Inc. (GeoGlobal or the Company) (NYSE Amex: GGR Charts) disclosed today an update of certain of our exploration activities conducted during the quarter ended June 30, 2009 and through August 31, 2009.

For commentary and my current outlook for GGR, read "Kirk's Investment Newsletter"

Exploration Highlights:

- Production Commences at Tarapur and Proven Reserves announced

- Drilling to Commence on KG Onshore Block in the First Quarter 2010

- KG Offshore Block Field Development Plan submitted on Deen Dayal West

- Testing completed on KG#21, KG#33 and KG#19 on the KG Offshore Block

- KG#20-SS to commence drilling on KG Offshore Block

- Drilling continues on Ankleshwar Block

Tarapur Block

Tarapur 1 Discovery Area

As previously reported, first production in Tarapur commenced on different dates throughout the month of May 2009 from the three discovery wells (Tarapur 1, Tarapur P and Tarapur 5). Total gross production from these three wells for the second quarter ending June 30, 2009 amounted to 22,125 Bbls of oil. In addition to the oil production, a total of 16.1 MMscf of natural gas was produced and flared off. Upon tie-in of additional wells, it is the intention that the natural gas will also be contained and sold. The Company's participating interest share of this production is 14%.

It is expected that three further development wells (TD-1, TD-2 and TD-3) will come on stream during the third quarter of 2009. As previously reported an independent engineering report which covers the three currently producing wells along with the three development wells that are expected to come on stream during the third quarter, reported that the Company's share of total proved reserves for these six wells is 0.245 million stock tank barrels (MMSTB).

There are eleven additional wells which are drilled, tested and awaiting tie-in to the oil tank storage facilities. GSPC as operator is currently in the process of preparing and filing the necessary declarations of commerciality and field development plans pursuant to the provisions of the PSC in order to bring these additional eleven wells within the Tarapur 1 Discovery Area onto production before the end of the fourth quarter of 2009.

Krishna Godavari Onshore Block

In a recent Technical Committee meeting held July 8, 2009, it was agreed among the parties to pursue the 3D seismic and the drilling commitments simultaneously, by identifying prospects and locations based upon the available reprocessed 2D seismic data and related geoscientific information allowing us the ability to meet our Minimum Work Program commitment for Phase I within the necessary timelines, being February 15, 2012.

Three priority locations have been proposed by us to the operator, Oil India Ltd. These locations have been reviewed by and agreed to by Oil India Ltd, as well as a third party engineering firm. All of these locations have multiple prospects in both the shallower (Eocene - Miocene) and the deeper (Cretaceous - Jurassic) zones.

All necessary steps are currently being undertaken by Oil India Ltd. in an effort to commence the drilling of the first of twelve exploration wells by the first quarter of 2010.

Krishna Godavari Offshore Block

Deen Dayal West Field Development Plan

On June 18, 2009 GSPC submitted the Deen Dayal West field development plan in accordance with the provisions of the PSC to the Management Committee for approval. The Deen Dayal West field development plan currently encompasses fifteen wells, which includes recompleting four wells already drilled (KG#8, KG#15, KG#17 and KG#28) along with eleven development wells yet to be drilled.

Six wells (KG#16, KG#19, KG#21, KG#22, KG#32 and KG#33) are awaiting further appraisal before the preparation and submission of a declaration of commerciality pursuant to the PSC can be supported.

KG#21 Well

The KG#21 exploratory well commenced drilling on September 22, 2008 using the Perro Negro 3 (PN-3) jack-up drilling rig. The well is located approximately 1.36 kilometers northwest of the KG#8 discovery in approximately 60 meters of water depth in the southwestern portion of the KG Offshore Block in the Deen Dayal North-west fault block. The well was slightly deviated and was drilled to a depth of 5,656 meters being a total vertical depth of 5,467 meters. The objective of the KG#21 location is two main targets with the primary target being the Lower Cretaceous sequence which was unable to be tested in the KG#31 exploratory well due to mechanical problems and the secondary target being the Upper Cretaceous fan deposits.

GSPC as operator originally planned a total of seven drill stem tests on the KG#21 well in the Lower Cretaceous sequence over the 722 gross meter interval of 4,920.5 to 5,642.5 meters. GSPC subsequently settled on four drill stem tests over the sequence in the Lower Cretaceous and one drill stem test over the sequence in the Upper Cretaceous, the results of which are as follows:

- DST-1, the first drill stem test was conducted by perforating 37.5 net meters over the gross interval 5,593.7 to 5,642 meters. This successful DST-1flowed during clean-up, on a 36/64 inch choke at a stabilised rate of 20 MMscfd gas and 2,600 barrels per day water with 4,670 psi (pounds per square inch) flowing well head pressure. During the main flow, on a 20/64 inch choke, the well flowed at a stabilised rate of 10 MMscfd gas and 1,200 barrels per day water with 7,220 pounds per square inch flowing well head pressure.

- DST-2, the second drill stem test was conducted by perforating 25 net meters over the gross interval 5,517 to 5,567 meters. DST-2 flowed during clean-up, on a 24/64 inch choke at a stabilised rate of 1.5 MMscfd gas and 500 barrels per day water with 1,000 psi flowing well head pressure.

- DST-3 was conducted by perforating 20 net meters over the gross interval 5,425 to 5,474 meters. DST-3 flowed during clean-up at a stabilised rate of 0.65 MMscfd of gas with 270 psi flowing well head pressure.

- DST-4 was conducted by perforating 56 net meters over the gross interval 5,193 to 5,321 meters. DST-4 flowed during clean-up at a stabilised rate of 1.0 MMscfd of gas with 530 psi flowing well head pressure.

- DST-5 was conducted in the Upper Cretaceous by perforating 15 net meters over the gross interval 3,592.5 to 3,630 meters. DST-5 flowed during clean-up at a stabilised rate of 6.5 MMscfd gas and 600 barrels per day condensate with 2,530 psi flowing well head pressure.

With the successful completion of these drill stem tests, the well has been suspended and the Perro Negro 3 (PN-3) jack-up drilling rig has been de-hired.

KG#33 Well

The KG#33 appraisal well commenced drilling on November 4, 2008 using the Atwood Beacon jack-up drilling rig. The well is located approximately 6.5 kilometers northeast of the KG#8 discovery in approximately 109 meters of water depth in the southeastern portion of the KG Offshore Block in the Deen Dayal East fault block. The well was directionally drilled to a total depth of 5,126 meters being a total vertical depth of 4,596 meters. The objective of the KG#33 location is to explore the hydrocarbon potential of the Lower Cretaceous sequence in the Deen Dayal East fault block and correlate to the KG#16 discovery well.

GSPC as operator conducted three drill stem tests on the KG#33 well over the 313 gross meter interval of 4,555 to 4,868 meters, the results of which are as follows:

- DST-1, the first drill stem test was conducted by perforating 5.0 net meters over the gross interval 4,828 to 4,868 meters. This DST-1 flowed during clean-up, on a 20/64 inch choke, at a stabilised rate of 0.7 MMscfd gas with 800 pounds per square inch flowing well head pressure. DST-1 was subsequently stopped and the operator performed a hydraulic fracture over the same 5 meter interval. The result was DST-1A which had an increase in flow through a 16/64 inch choke to a stabilized rate of 6.3 MMscfd gas with 5,500 psi flowing will head pressure.

- DST-2 was conducted by perforating a net interval of 34.5 meters over a gross interval from 4,692 to 4,752 meters. DST-2 recorded flow during clean-up, on a 16/64 inch choke at a stabilised rate of 0.9 MMscfd with a 700 psi flowing well head pressure.

- DST-3 was conducted by perforating a 5 meter interval from 4,596 to 4,601 meters. A hydraulic fracture job was conducted over this interval resulting in a stabilised flow during clean-up through a 24/64 inch choke of 4.8 MMscfd with a 1,730 flowing well head pressure.

With the successful completion of these drill stem tests, the KG#33 well has been suspended and the Atwood Beacon jack-up drilling rig has been de-hired.

KG#19 Well

The KG#19 exploratory well is located approximately 11 kilometers northeast of the KG#8 discovery in approximately 198 meters of water depth in the southeastern portion of the KG Offshore Block in the Deen Dayal East fault block. The KG#19 well commenced drilling on May 2, 2008 using the Essar Wildcat self propelled semi-submersible drilling rig. The well was suspended after setting the casing at 889 meters so that the Essar Wildcat rig could be repaired with a new 15,000 psi blow out preventer. The Essar Wildcat rig resumed drilling the KG#19 well on January 1, 2009. The well was vertically drilled to a total depth of 5,357 meters being a total vertical depth of 5,351 meters. The objective of the KG#19 location is to explore and probe the hydrocarbon potential of the Lower Cretaceous sequence in the Deen Dayal East fault block.

The KG#19 well was successfully logged and a seven inch liner was run to total depth. GSPC had originally identified two zones for testing covering the intervals 4,440 to 4,535 meters and 4,800 to 4,960 meters. GSPC subsequently chose to conduct only one drill stem test. DST-1 was conducted by perforating 33 net meters over the gross interval 4,455 to 4,530 meters. DST-1 successfully flowed during clean-up at a stabilized flow rate of 3.8 MMscfd gas and 70 barrels per day of condensate with a 2,440 psi flowing well head pressure.

GSPC, as operator has elected to suspend the KG#19 well and move the Essar Wildcat to a new location, the KG#20-SS.

KG#20-SS Well

The KG-20-SS is expected to commence drilling in early September, 2009 using the Essar Wildcat self propelled semi-submersible drilling rig. The KG#20-SS is located approximately 5.22 kilometers to the northeast of the KG#19 well in approximately 480 meters of water. The well is planned to be drilled vertically to a depth of approximately 5,275 meters. The objective of the KG#20-SS is to explore four targets with a strong amplitude signature on seismic in the Lower Cretaceous Sequence in glauconitic sands similar to that which was encountered in the KG#19 well.

Carried Interest Dispute on the KG Offshore Block

GeoGlobal and GSPC continue to have discussions to seek to resolve the previously announced dispute between them relating to GSPC's claim under the terms of the Carried Interest Agreement. As at August 31, 2009, no definitive settlement agreement has been entered into.

Ankleshwar Block

On February 26, 2009, GSPC as operator applied for a six month extension of Phase I to September 30, 2009 to complete the exploratory drilling commitment of fourteen wells, which approval has been granted.

Drilling of the three exploratory wells (Ank-34, Ank-36 and Ank-37) which commenced during the second quarter of 2009 is now complete and two of those wells are currently testing. Two exploratory wells (Ank-35 and Ank-38) which commenced drilling in August 2009 continue to drill.

As at August 31, 2009, ten wells have been or are being drilled on this block. Of those ten wells, two are currently drilling, one (Ank-21) is suspended awaiting the submission of the oil discovery appraisal plan, two are testing (Ank-34 and Ank-36) and five are to be abandoned. Four exploratory wells remain to be drilled under the Phase I Minimum Work Program.

About GeoGlobal

GeoGlobal Resources Inc., headquartered in Calgary, Alberta, Canada, is a US publicly traded oil and gas company, which through its subsidiaries, is engaged primarily in the pursuit of petroleum and natural gas through exploration and development in India. Since inception, the Company's efforts have been devoted to the pursuit of Production Sharing Contracts with the Government of India. Currently, the Company is focused on the development of high potential exploration targets in the Krishna Godavari, Cambay, Deccan Syneclise, and Rajasthan basin areas.

Cautionary Statement to Investors and more disclaimers read the full press release here

For commentary and my current outlook for GGR, read "Kirk's Investment Newsletter"

• 7/16/2009: GeoGloblal Announces Tarapur Reserves
  
  
• 6/16/2009: GeoGlobal Exploration Activities Update

GGR: AMEX

Last $0.8099
Change = +$0.0399
% Change = 5.18%

GM Retains Bankruptcy Counsel, GeoGlobal Awarded Two Onshore Blocks

Hello from Baja Mexico. It was 83F when I arrived at La Paz airport Monday afternoon and I've been in shorts ever since. Good windsurfing Tue, Wed and today.

News from GM and GGR:

From the WSJ: GM Retains Bankruptcy Counsel; Tentative Pact Reached on Bailout

General Motors Corp. has hired lawyers and bankers to consider whether to file for bankruptcy protection, said several people familiar with the matter, while Senate lawmakers neared a tentative agreement on an emergency auto-bailout package that could see a vote Thursday night.

Thought question to discuss in the comments: How much does the government collect in taxes from the people employed by GM each month when you add up Social Security, Medicare and income taxes? It may make financial sense to make the loan so they don't fire everyone and collect zero taxes while paying unemployment benefits.

From RIGZONE: GeoGlobal Snags 2 NELP-VII Blocks Onshore India

The Government of India has awarded GeoGlobal a 100% participating interest in two new onshore Exploration Blocks in India under the Seventh round of the New Exploration Licensing Policy (NELP-VII) bidding which closed on June 30, 2008.

These onshore blocks include Exploration Blocks VN-ONN-2005/1 (VN-01) and VN-ONN-2005/2 (VN-02). These adjacent exploration blocks cover an area of approximately 3,776 and 4,908 square kilometers, respectively, onshore in the eastern portion of the Vindhyan Basin which is located in the north eastern portion of the State of Madhya Pradesh in central India. GeoGlobal will be the operator for both of these blocks.

La Ventana Wind chart for today from iwindsurf.com
Click for full size image.

We are in El Sargento, just up the beach from La Ventana.

My Workstation with "Sea of Cortez" view.

My Room with a View.

New Web Pages to Bookmark:

• US Treasury Rates at a Glance
  
  
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GGR: GeoGlobal Resources Inc. News, Charts and Discussion

GeoGlobal Resources Inc. (Ticker GGR charts) is an oil and gas company based in Canada and listed on the American Stock Exchange. Through its subsidiaries, GGR is engaged primarily in the pursuit of petroleum and natural gas through exploration and development in India. GGR and its partner, GSPC , have discovered what could be the largest natural gas (NG) field in the Indian Ocean. Since GGR showed it could successfully find hydrocarbons, they have made similar partnerships with other Indian oil companies.

From the December 2008 issue of "Kirk Lindstrom's Investment Letter:"

GGR has no revenue and will not for some time so this is highly speculative! If we continue to buy shares when very low and take profits when up, it is a safe (but VOLATILE) way to invest in a key emerging market, India.

If we continue to buy shares when very low and take profits when up, it is a safe (but VOLATILE) way to invest in a key emerging market, India. As of 11/20/08, I have $26,308 cash profits taken plus 5,900 shares from buying and selling GGR. This is all profit. GGR could go to zero tomorrow and I would still have the cash. My goal is to use GGR as an ATM to generate more cash trading its volatility.

News =>

GGR: Geoglobal Resources Up on Major New Natural Gas Discovery in Krishna-Godavari Basin

GSPC or Gujarat State Petroleum Corporation is planning a $6B listing and IPO on the Bombay Stock Exchange.

Use the comments section to post news about GGR or discuss it as an investment or trading vehicle.

• More GGR Charts

Disclaimer: I am on "house money" with GGR. I purchased GGR for my newsletter portfolio between $0.94 and 2.25 in 2004 and I have shares purchased as low as 12¢ in my personal portfolio. I took a TON of profits when the stock was high, including twice in the $13s in late 2005, so I have huge profits in this already which may allow me to trade this more aggressively.

12/3/08 Udpate: Prior to today, my last trade was to sell shaers at $3.81 on 7/30/08. I took most of my money out when it was higher but have started to purchse shares again to trade including my last, personal buy today at $1.24. I will list an auto sell target (a limit order you set at your broker ahead of time) in the next newsletter for the shares I bought today for my explore portfolio. For my specific buy and sell targets, you need to Subscribe to Kirk's Investment Newsletter.

Post News and Read Comments Here

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GGR: GeoGlobal up on Ankleshwar Oil Discovery

GeoGlobal's stock (GGR charts) more than doubled in the past week. Now we know one reason why. GeoGlobal's partner, the Gujarat State Petroleum Corporation (GSPC), struck oil in its onshore Ankleshwar well number 21 at a depth of 2,200 meters. Several sources say the well is yielding 200 barrels a day.

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The Business Standard of India reported:

• Gujarat State Petroleum Corporation (GSPC) has struck oil in one of its onshore wells in Ankleshwar, said sources close to the development.
  
  
• "Oil was struck at Ankleshwar Well No. 21 at a depth of 2,200 metres and it has begun yielding 200 barrels a day. GSPC has drilled five wells from May to August this year. “The testing in the well, where oil has been found, is yet to be completed. Meanwhile, testing in other wells is also on,” sources added. "
  

In GeoGlobal's November 18 report titled "September 2008 Quarterly Exploration Activities Update and Report" says the following:

Ankleshwar Block

As at November 17, 2008, five exploratory wells have been or are being drilled on this block.

The Ank-1 and Ank-8 wells were drilled to total depths of approximately 2,600 and 2,100 meters respectively. Both wells have been tested and are currently suspended awaiting further evaluation.

The Ank-10 and Ank-21 well have been drilled to a total depth of approximately 1,400 and 2,200 meters, respectively. The Ank-10 has been tested and is awaiting further evaluation, while the Ank-21 is currently being tested.

Map of India

Map of Ankleshwar


CB-ONN-2003/2 Ankleshwar block

GeoGlobal has a 10% interest in this Ankleshwar blockThe other partners are:

• Gujarat State Petroleum Company = 50% (operator)
• Jubilant Offshore Drilling Pvt. Ltd. = 20%
• GAIL (India) Ltd. = 20%

More information

• GeoGlobal Operations List
  
  
• GGR Stock Charts

Disclaimer #1: I am on "house money" with GGR. I purchased GGR for my newsletter explore portfolio between $0.94 and 2.25 in 2004 and I have shares purchased as low as 12¢ in my personal portfolio. I took a TON of profits when the stock was high, including twice in the $13s in late 2005, so I have huge profits in this already which may allow me to trade this more aggressively.

Disclaimer #2: I added 2,000 shares to my newsletter "explore" portfolio last week at $1.30 when it reached my "Auto Buy" target, a limit order set ahead of time at our brokers. As luck would have it, I got 1,000 shares put into my ROTH at $1.24 via my limit order as someone was in a huge hurry to sell into the panic last week where my net was out to catch some shares.

Video of KG-22 Natural Gas Flare in Krishna Godavari Basin

KG-22: GSPC Gas Discovery at Krishna Godavari Basin Block - 22

Video of KG-22 Natural Gas flare


Gujarat government-owned Gujarat State Petroleum Corporation (GSPC) is the operator and holds an 80% stake in the block, awarded for exploration to GSPC along with its partners Jubilant Enpro and Canada's GeoGlobal Resourcea (GGR) in 2003. GGR has a 5% carried interest in the discovery.

Narendra Modi, Gujarat Chief Minister, on Thursday July 17 said the Gujarat State Petroleum Corporation discovered approximately three trillion cubic feet (tcf) gas from the KG-22 well in the Deendayal Upadhyay block off the coast of Andhra Pradesh. Modi addressed the media through video conferencing to say:

• This discovery substantiates the huge reserve potential of the Deendayal block. Based on the drilling reports test results analysed by GSPC and feedback received from various independent consultants abroad, we are confident that reserves in the Krishna Godavari basin will be more than 20 Tcf."
• "The discovery of KG-22 will make it one of the highest gas generating well in the country."
  
• "It was a challenge for the state-run GSPC, since the gas was discovered at high pressure."
• "Earlier find of the KG-8 well, Deendayal west, was a success with a gas flow of 10 MMCF per day. Last month we have submitted the declaraton of commerciality report to the Director General of Hydro Carbon for Deendayal west."

More Long-term and Intraday GGR Charts

Disclaimer: I purchased GGR for my newsletter portfolio between $0.94 and 2.25 in 2004 and I have shares purchased as low as 12¢ in my personal portfolio. I took a TON of profits when the stock was high, including twice in the $13s in late 2005, so I have huge profits in this already which may allow me to trade this more aggressively including my most recent purchase at $2.65. For my specific buy and sell targets, you need to Subscribe to Kirk's Investment Newsletter.

Geoglobal Resources Up 24% on Major New Discovery in Krishna-Godavari Basin

Geoglobal Resources (GGR Charts) was up 24% today on good news from the Krishna-Godavari basin, a major natural gas field off the east coast of India in the Bay of Bengal. Testing of the KG-22 well has indicated a major new natural gas discovery. After making a low at $1.76, GGR was up significantly in the past week as it appears news of the discovery leaked out to drive the stock to $2.40 before the news was announced.

Geoglobal has a 5% carried interest in the discovery while the Gujarat government-owned Gujarat State Petroleum Corporation (GSPC) has the majority stake in the discovery. Jubilant Anpro also has a share.

Geoglobal and GSPC found a large natural gas field in the Krishna-Godavari basin in 2005 but delays in getting the gas out caused the stock to return to levels lower than before the natural gas was discovered! Now there are two large discoveries in the KG basin which could drive the stock back to prior highs, if not higher.

More GGR Charts

Excerpts from News reports coming over the wires:

Financial Express: Major GSPC gas find in K-G basin

“Given the huge size of the discovery, Gujarat chief minister Narendra Modi is visiting the well site on Thursday to make a formal announcement,” said a senior company official.

This is the sixth gas discovery by GSPC in its K-G basin block so far. Given the flow of gas, estimated at the rate of 27.3 million cubic feet a day, the discovery is being considered a gigantic one.

The Times of India: Huge gas discovery by GSPC

There was a buzz of excitement all around Sachivalaya on Wednesday as the news of the discovery spread. Officials said the GSPC's success is bigger than any other wells it dug so far. Officials said the GSPC's success is bigger than any other wells it dug so far.

So far, the GSPC has drilled 10 wells in a 120 sq km off-shore area, called Deen Dayal. Gas has been struck in six of these wells. The discovery in KG-22 is believed to be the biggest so far and drilling had taken up at a depth of 6,000 metres — the deepest so far.

Press Trust of India: GSPC strikes gas field off AP coast

"During initial testing gas flowed at the rate of 23-27 million cubic feet per day...It is a good reservoir," he said.

Reuters: India's GSPC finds more gas in east coast block

A GSPC official confirmed the find. "We have found gas in the KG-22 well. Initial flow has been 27.3 mmscfd (million cubic feet a day) through a choke size of 28/64 inches," GSPC General Manager M.Y. Farooqui told Reuters.

Disclaimer: I purchased GGR for my newsletter portfolio between $0.94 and 2.25 in 2004 and I have shares purchased as low as 12¢ in my personal portfolio. I took a TON of profits when the stock was high, including twice in the $13s in late 2005, so I have huge profits in this already which may allow me to trade this more aggressively. For my specific buy and sell targets, you need to Subscribe to Kirk's Investment Newsletter

7/19/08 Update: GGR has more than doubled since making a low on July 2.


We are posting related news stories about GGR at Facebook's "Investing for the Long Term" discussion board titled "GGR - GeoGlobal Resources."

Stock Market Returns After Oil Prices Double in a Year or less

As of Friday's close, oil prices are up 103% in the last year. Investments that have done well with rising oil prices were correctly predicted in the book "The Oil Factor."

==> More Oil Price Charts <==

I was given the book, "The Oil Factor" back in Feb 2004 to review and perhaps add it to my recommended reading list. I liked the book so I had it on my recommended reading list for several years and I recommended it in my writing.

In "The Oil Factor," authors Stephen and Donna Leeb said if oil doubles in any 12 month period, then the best the markets have done 18 months later is a 4% gain and the worst is a 27% loss. Here are more 18 month S&P500 market returns over the next 18 months after the specified oil price changes:

Oil prices (red)& the S&P500 (1973-2003)
12 month price change: S&P500 18 months later
Oil up >100%: -27% to +4%
+50 to 100%: -11% to +17%
*25 to 50%: -7 to +25%
0 to +25%: -3 to +21%

The Leebs predicted higher oil prices and inflation were in our future, suggested the overall stock market could see trouble making large gains and suggested some investments they thought would do well with oil prices going higher and higher. They even suggested that gold could reach $1000 from its then price in the low $400s! (See Ch 12: "We even think it could reach $2,000)


"The Oil Factor: Protect Yourself AND PROFIT from the Coming Energy Crisis"
by Stephen and Donna Leeb
(Feb 2004)

Worth the price of the book for the historic data in a bar graph on pg 17, Ch2.

Their recommended assets included energy stocks, that included REITS for inflation and Warren Buffett's BRKA, have done quite well.

Obviously, the oil companies and gold have been great investements since their book was published in Feb. 2004.

I made good gains buying GeoGlobal Resources (GGR $3.27) in 2004 between $0.95 and $2.25. GeoGlobal is a Canadian natural gas driller operating in India. I took massive profits in 2005 selling most of my shares all the way up to the mid teens ($13.65) before GGR collapsed so I got my energy profits front-loaded (I took enough profits to buy a Prius or two) but the slow, steady gains in the energy stocks the Leebs recommended in their book have done great also.

Note: I have recently started to repurchase shares in GGR with the most recent newsletter and personal purchases on 4/2/08 at $2.65. (GeoGlobal discovered the largest natural gas field in deep water off the shores of India. The stock soard on the news. Delievery to customers was delayed significantly so the price collapsed back to prediscovery levels, where I hope it is an incredible bargain.)

I also own and have recommended REITS as a core position in "Kirk Lindstrom's Investment Newsletter" since early 2001. REITS have done very, very well as an inflation hedge. Vanguard shows $10,000 invested in their REIT index fund on 1/1/2001 is now worth about $30,000.

The above chart doesn't show the dividends reinvested. REITs currently pay an effective yield of 4.15%. For the last 5 years, VGSIX has averaged 18.17% a year through 4/30/08!

Now we should read:

The Coming Economic Collapse: How You Can Thrive When Oil Costs $200 a Barrel
by Stephen Leeb and Glen Strathy
(February 21, 2007)

Product Description: Stephen Leeb shows how hard times can be a boon for smart investors. As the world faces an energy crisis of unprecedented scope, renowed economist Stephen Leeb shows how surging oil prices will contribute to an economic collapse. With meticulous research and analysis, Leeb shows that due to strong competition from India and China, prices could soon double, a cost for which most countries and investors are ill-prepared. Now, in this groundbreaking book, Leeb not only shows how this crisis will affect consumers, but how savvy investing can turn these dire times into financial gain.

He was right, oil prices did double and the S&P500 has struggled.

Click to view the full sized chart showing the price of oil plotted against the S&P500 from 1990 through Friday May 23, 2008.

To find out how I've profited greatly from these difficult market conditions, subscribe to "Kirk Lindstrom's Investment Newsletter" today!

• Since 1/1/1999 through 6/30/08 my "explore" portfolio is up 175% while the S&P500 is only up 20% and Warren Buffett's Berkshire Hathaway is only up 71%
  
  
• Subscribe TODAY and get the September 2008 issue for FREE!
  
  
• Newsletter (pdf) Story about my success

Don't delay!

Geoglobal Surges on GSPC's Good News from Krishna-Godavari Basin

Today canadian driller Geoglobal Resources (GGR Charts) surged on news from the Krishna-Godavari (KG) Basin. Livemint.com reported GSPC, the Gujarat government-owned hydrocarbon company Gujarat State Petroleum Corp., struck natural gas at two more wells in its Krishna Godavari field in eastern coast of India off Andhra Pradesh. This area is also known as Deendayal block.

Click chart to see full sized version courtesy of stockcharts.com

GSPC has informed the director general of hydrocarbons (DGH), an upstream advisory and technical regulatory body, about the new gas find last week. GSPC managing director D.J. Pandian couldn’t be reached for comment.

The natural gas from KG basin is important for GSPC as it is forced to buy natural gas for its customers from liquefied natural gas (LNG) market at a price of $12-14 (Rs473-552) per million British thermal unit (mBtu) equivalent.

Its existing gas source at Hazira is depleting and GSPC requires its own natural gas source to keep its customer base and grow.

It (GSPC) had announced its biggest ever discovery of 20 trillion cubic feet (tcf) of natural gas from this field at the Deendayal block in mid-2005 but DGH had officially put the reserves figure at 3.6tcf—less than 20% of what GSPC had claimed. Instead of challenging the claim, DGH had asked the corporation to drill more wells to prove its claim of the field having 20 tcf of natural gas.

“Striking gas in these two wells would help GSPC prove its claim of higher quantity of natural gas in this field, which it was struggling to do for long,” said a ministry of petroleum and natural gas official who also didn’t want to be named.

GGR has a 5% carried interest in the KG/Deendayal offshore block. GSPC holds 80% of equity in the Deendayal block with 10% held by Jubilant Enpro Ltd, which is part of the Jubilant Corp. (Members of the family that owns Jubilant also have a significant stake in HT Media Ltd, the publisher of Mint where this article came from.)

Disclaimer: I purchased GGR for my newsletter portfolio between $0.94 and $2.25 in 2004 and I have shares purchased as low as 12¢ in my personal portfolio I took quite a bit of profits all the way into the mid teens. I have huge profits in this already. I have been trading the volatility around this core position to generate more gains and may buy or sell at any time. This is a HIGHLY SPECULATIVE stock with no income.