UPDATE 4-Iraqi Kurdistan-focused oil shares hit by IS advance

Thu Aug 7, 2014 5:08pm EDT
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* Islamic State advance raises fears for Kurdistan oil fields

* DNO shares down as much as 24 percent

* Gulf Keystone Petroleum down as much as 13 percent (Adds comment from Marathon Oil)

By David Sheppard

Aug 7 (Reuters) - Shares of energy companies operating in Iraqi Kurdistan plunged on Thursday and two U.S. companies evacuated some staff as Islamic State militants advanced within 45 kilometers (28 miles) of Arbil, a key hub for oil producers.

Companies that produce oil in the semi-autonomous region, including Oslo-listed DNO ASA, as well as London-listed Gulf Keystone Petroleum Ltd and Genel Energy Plc saw double-digit declines in their share prices as the radical Sunni militants seized 15 towns.

While the companies said their oil fields continued to operate, there are growing concerns about the security risks faced by firms active in Iraqi Kurdistan, seen as a beacon of relative stability in the region.

"Investors are now taking into account the risk," ABG Sundal Collier analyst Oeyvind Hagen said, adding it remained difficult to judge how far into the Kurdish region the Islamists could penetrate.

Shares in DNO fell as much as 24 percent and Gulf Keystone Petroleum was down 13 percent at their lowest point, before paring losses. Genel shares were down over 10 percent.   Continued...