REG - Gulf Keystone Petrol - Update on shareholder distributions

Gulf Keystone PetroleumAnnouncement

08/10/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241008:nRSH2586Ha&default-theme=true

RNS Number : 2586H  Gulf Keystone Petroleum Ltd.  08 October 2024

 

8 October
2024

 

 

Gulf Keystone Petroleum Ltd. (LSE: GKP)

("Gulf Keystone", "GKP", "the Group" or "the Company")

 

Update on shareholder distributions

 

Declaration of $20 million interim dividend

Launch of up to $10 million share buyback programme

 

Gulf Keystone, a leading independent operator and producer in the Kurdistan
Region of Iraq, is pleased to provide an update on its approach to shareholder
distributions in the current local sales environment.

 

Jon Harris, Gulf Keystone's Chief Executive Officer, said:

 

"We have long recognised the importance of distributions to Gulf Keystone
shareholders and we were pleased to be able to restart returns of excess cash
earlier in the year with free cash flow generation from local sales. As our
liquidity continues to improve, we are today setting out an updated approach
to shareholder distributions in the current local sales environment, which
includes plans to review the Company's capacity to declare an interim dividend
on a semi-annual basis around our Full Year and Half Year Results. In line
with this approach, we have decided to declare a $20 million interim dividend
and initiate a share buyback programme of up to $10 million."

 

 

Update on shareholder distributions

 

Gulf Keystone is today setting out an updated approach to shareholder
distributions in the current local sales environment to enable investors to
better evaluate the prospect of future returns ahead of the restart of
Kurdistan exports. While local sales remain difficult to predict beyond the
near term (given market demand dynamics or the upcoming PF-1 shutdown planned
for safety-critical upgrades and maintenance in November), demand for Shaikan
Field crude has continued to be robust. Gross average production was c.48,500
bopd in September and c.45,900 bopd in October to date - with realised prices
stable at c.$27-28/bbl - bringing 2024 year-to-date average production to
c.42,300 bopd as at 6 October 2024 and enabling free cash flow generation. The
Company's cash balance was $110 million as at 7 October 2024.

 

The Company is committed to returning excess cash to shareholders. Looking
ahead, the Board plans to review the Company's capacity to declare an interim
dividend on a semi-annual basis around the time of the Full Year Results and
Half Year Results. Furthermore, share buybacks will be considered
opportunistically throughout the year.

 

In determining the level of shareholder distributions, the Board will assess
the Company's liquidity needs to:

 * fund essential investment in the Shaikan Field focused on safety, reliability
and maintaining and optimising production levels, with a year of capital
expenditures and costs evaluated as the primary reference point

 * ensure the Company is able to transition successfully from local sales to the
restart of Kurdistan exports and normalisation of Kurdistan Regional
Government ("KRG") payments

 

The Board will also assess the Company's operating environment, in particular
the outlook for local sales volumes and prices.

 

Following the reopening of the export pipeline and normalisation of payments
by the KRG, the Board plans to provide an update on the Company's approach to
distributions.

 

 

$20 million interim dividend

 

Following the recent publication of the Company's Half Year Results, Gulf
Keystone today announces the declaration of a $20 million interim dividend.
The dividend is equivalent to 9.216 US cents per Common Share based on the
Company's total issued share capital as at 7 October 2024 and will be paid on
31 October 2024, based on a record date of 18 October 2024 and ex-dividend
date of 17 October 2024. Shareholders will have the option of being paid the
dividend in either GBP or USD, with the default currency GBP.

 

 

Launch of up to $10 million share buyback

 

In line with the Company's updated approach to shareholder distributions, the
Company has decided to initiate a share buyback programme (the "Buyback
Programme") of the Company's Common Shares of $1.00 each ("Shares") for up to
a maximum aggregate consideration of $10 million (the "Maximum Amount").

 

The Buyback Programme will be executed in accordance with the Company's
authority to make on-market purchases of Shares which was approved by
shareholders at the Company's AGM on 21 June 2024.

 

The Company has entered into an agreement with its brokers, Canaccord Genuity
Limited ("Canaccord Genuity") and Peel Hunt LLP ("Peel Hunt") (together the
"Brokers"), to carry out on-market purchases of Shares up to the Maximum
Amount within agreed parameters on an irrevocable and non-discretionary basis.
Purchases of Shares will be made on the Company's behalf in accordance with
the agreement with the Brokers and may continue independently of and
uninfluenced by the Company during any closed period to which the Company is
subject and/or if the Company comes into possession of inside information. The
Company has agreed the Buyback Programme will commence immediately and will
run to the earlier of its completion or 31 December 2024.

 

So long as the Company is not in a closed period to which it is subject nor in
possession of inside information (an "Open Period") the Company may elect to
terminate the non-discretionary nature of the mandate. The Company may
subsequently choose to reinstate the non-discretionary mandate of the Buyback
Programme provided that the Company is in an Open Period at that time.

 

The Buyback Programme will be carried out on the London Stock Exchange and
will be implemented within certain agreed parameters, including the price
parameters under the relevant shareholder authority and, except as disclosed
in this announcement, the safe harbour provisions set out in the Market Abuse
Regulation (EU) 596/2014 (as it forms part of UK law pursuant to the European
Union (Withdrawal) Act 2018) (the "Regulations") and the applicable laws and
regulations of the London Stock Exchange.

 

A buyback of Shares on any trading day may represent a significant portion of
the daily trading volumes in the Shares and may exceed 25% of the average
daily trading volume specified in the safe harbour provisions of the
Regulations dealing with buyback programmes and accordingly the Company may
not benefit from the exemption in Article 5(1) of that regulation.

 

The sole purpose of the Buyback Programme is to reduce the capital of the
Company. As such, all Shares purchased under the Buyback Programme will be
cancelled.

The Company will make announcements and publish on its website details of any
Share repurchases.

 

 

 

The information contained within this announcement is deemed to constitute
inside information as stipulated under the Regulations. Upon the publication
of this announcement, this inside information is now considered to be in the
public domain and the Company confirms that it currently has no inside
information.

 

 

Enquiries:

 

 Gulf Keystone:                           +44 (0) 20 7514 1400
 Aaron Clark, Head of Investor Relations  aclark@gulfkeystone.com (mailto:aclark@gulfkeystone.com)

 & Corporate Communications

 FTI Consulting                           +44 (0) 20 3727 1000
 Ben Brewerton                            GKP@fticonsulting.com (mailto:GKP@fticonsulting.com)

 Nick Hennis

 

or visit: www.gulfkeystone.com (http://www.gulfkeystone.com)

 

Notes to Editors:

Gulf Keystone Petroleum Ltd. (LSE: GKP) is a leading independent operator and
producer in the Kurdistan Region of Iraq. Further information on Gulf Keystone
is available on its website www.gulfkeystone.com
(http://www.gulfkeystone.com/)

 

Disclaimer

 

This announcement contains certain forward-looking statements that are subject
to the risks and uncertainties associated with the oil & gas exploration
and production business. These statements are made by the Company and its
Directors in good faith based on the information available to them up to the
time of their approval of this announcement but such statements should be
treated with caution due to inherent risks and uncertainties, including both
economic and business factors and/or factors beyond the Company's control or
within the Company's control where, for example, the Company decides on a
change of plan or strategy. This announcement has been prepared solely to
provide additional information to shareholders to assess the Group's
strategies and the potential for those strategies to succeed. This
announcement should not be relied on by any other party or for any other
purpose.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDBRBDGBUGDGSR