City underwhelmed by new Gulf Keystone CEO

After less than a year in the top job, chief executive John Gerstenlauer will leave Gulf Keystone Petroleum after next month's AGM. But news that he'll be replaced by Jón Ferrier, a relative unknown in the City, has left investors underwhelmed.

Gerstenlauer had spent six years as chief operating officer at Gulf, which operates the Shaikan oilfield in the Kurdistan region of Iraq, before taking over from highly-paid and controversial founder Todd Kozel. He'd supervised the drilling of every well since Gulf began drilling in Kurdistan in 2008. "Nobody knows this asset better, and there is no one better qualified to take up the role of CEO," said chairman at the time, Simon Murray, who subsequently left Gulf in March.

Admittedly, 2014 was an awful year for Gulf. It suffered from a plunge in oil prices, irregular payments from regional governments, fundraisings, a deal with bondholders and posted a $248 million loss. Despite that, Gerstenlauer did manage to build production to the targeted 40,000 barrels of oil per day (bopd) at the end of 2014.

And Ferrier joins at a time when Gulf is still looking to sell assets including its 20% stake in the Akri Bijeel field, or possibly the entire business.

But Gulf shares fell Monday, and they remain stuck firmly near a six-year low. Ferrier, a geologist by training, has spent three decades in the industry, most recently senior vice president business development, strategy & commercial at Maersk Oil in Copenhagen. He also has experience in Kurdistan and the Middle East.

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"Mr Ferrier has what looks like an admirable CV with experience in many companies and indeed time in Kurdistan with Maersk," says industry expert Malcolm Graham-Wood. "I have spoken to former colleagues who rate him very highly as an oilman and a 'people person' and if he lacks anything it will be a shortage of market experience, with the amount of noise around GKP on AIM he will need his wits about him."

"The best quote I have read is 'can he put lipstick on the pig and sell GKP, then yes' which, providing that is the plan will do the trick although at current prices, long suffering shareholders might prefer to hang on for the ride."

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