============
Gulf Keystone Petroleum Ltd (GKP)
2023 AGM, Operational & Corporate Update
16-Jun-2023 / 07:00 GMT/BST
══════════════════════════════════════════════════════════════════════════
16 June 2023
Gulf Keystone Petroleum Ltd. (LSE: GKP)
(“Gulf Keystone”, “GKP” or “the Company”)
2023 AGM, Operational & Corporate Update
Ahead of today's 2023 Annual General Meeting ("AGM"), Gulf Keystone, a
leading independent operator and producer in the Kurdistan Region of Iraq,
provides an operational and corporate update.
Jon Harris, Gulf Keystone's Chief Executive Officer, said:
“Gulf Keystone entered 2023 following a year of strong operational and
financial performance and continued delivery against the Company’s
disciplined strategy of investing in profitable production growth,
sustainable shareholder returns and maintaining a strong balance sheet.
Following the suspension of Kurdistan crude exports on 25 March 2023 and
continued delays to oil sales payments, our focus has shifted to
aggressively reducing all costs to preserve liquidity, while maintaining
safe operational readiness to quickly restart production. We are now
exploring potential options to sell our crude to local buyers.
While no timeline has been publicly announced, we continue to believe the
suspension of exports will be temporary and that the KRG will resume more
normalised payments. We are encouraged by the ongoing engagement between
the KRG, Iraq and Turkey and note the approval earlier this week of the
Iraqi Federal budget, which is a step in the right direction towards
formal recognition of Kurdistan production by Iraq and potentially paves
the way for monthly budget transfers from Iraq to the Kurdistan Regional
Government (“KRG”). We continue to closely monitor the situation.
Operational
• Production from the Shaikan Field remains shut-in following the
suspension of exports and closure of the Iraq-Turkey Pipeline on 25
March 2023
◦ The suspension has resulted in a gross production deferment to
date of around 4.3 million barrels, or approximately 11,800 bopd
on a full-year basis (2023 gross average production guidance
prior to suspension: 46,000 - 52,000 bopd)
• Almost all operational activity in the Shaikan Field has stopped since
the pipeline closure in order to preserve liquidity
◦ Production facilities currently ready to resume production
◦ All drilling and well workover activity halted, with the drilling
rig released following the completion and hook-up of SH-18
◦ All expansion activity suspended, including the installation of
water handling
◦ Progressing critical safety upgrades and maintenance activity
◦ No Lost Time Incidents for over 150 days
• Currently exploring opportunities to sell Shaikan Field crude to local
buyers
◦ Potential opportunities to initially sell a portion of PF-1
production at prices in line with the local market
◦ Logistics in place to quickly restart trucking operations
Financial
• The Company continues to engage with the KRG regarding outstanding
receivables for the months of October 2022 to March 2023 totalling
$151 million net on the basis of the KBT pricing mechanism
• Net capital expenditures to the end of May 2023 are estimated at $49
million, including completion of SH-17 and SH-18, well workovers, well
pad preparation, long lead items and expansion of production
facilities
• Cash balance of $93 million at 15 June 2023
Outlook
• The Company continues to believe that the suspension of exports will
be temporary and that the KRG will resume more normalised payments
◦ While no official timeline to restart pipeline operations has
been announced, the Company understands that discussions between
the KRG, the Iraqi Ministry of Oil and the Turkish authorities
remain ongoing
◦ The KRG announced that it had reached an agreement with the Iraqi
government on measures to allow the resumption of oil exports
through Turkey, and also reported that Iraq's State Oil Marketing
Organization (“SOMO”) had officially requested Turkish
authorities to allow Kurdistan’s oil exports via the country's
Ceyhan port
◦ Iraq’s parliament recently approved the 2023-2025 Federal Iraqi
budget, a step towards formal recognition of Kurdistan production
by Iraq and potentially paving the way for monthly budget
transfers from Iraq to Kurdistan
◦ The Company continues to monitor the situation and is currently
ready to resume production
• The Company remains focussed on preserving liquidity while proactively
managing existing accounts payable
• Lowering net capital expenditures, operating costs and G&A to a
monthly run rate of around $6 million net from July 2023
◦ 2023 net capex currently estimated at $70-$75 million (previously
revised guidance of $80-$85 million)
▪ Estimated $49m net capex Jan-May 2023; estimated $20-$25m of
safety critical and contractual commitments remaining for
Jun-Dec 2023
◦ 20% deferral of Executive Director salaries & Non-Executive
Director fees and reduced staffing and contractor levels
◦ Final 2022 ordinary annual dividend of $25 million cancelled, as
announced on 23 May 2023, with the reinstatement of distributions
to be considered once regular KRG payments resume
• Continuing to review additional liquidity options, including local
crude and inventory sales and further cost reductions
2023 AGM
Gulf Keystone is today hosting its 2023 AGM at 10am CET via webcast. It
will not be possible to attend the meeting in person but all registered
Gulf Keystone shareholders are invited to view the webcast at the
following link: 1 http://meetnow.global/gkpagm2023. Joining instructions
are available on Gulf Keystone's
website: 2 https://www.gulfkeystone.com/investors/agm/.
The AGM will be hosted by Jaap Huijskes, Non-Executive Chairman, and
Martin Angle, incoming Non-Executive Chairman and current Deputy Chairman
and Senior Independent Director. It will include a presentation by Jon
Harris, Chief Executive Officer, and Ian Weatherdon, Chief Financial
Officer. A copy of the presentation will be available to view on the
Investors section of Gulf Keystone's website
( 3 https://www.gulfkeystone.com/investors/presentations). A recording of
the presentation will also be available to view on the same page later in
the day following the conclusion of the AGM.
Enquiries:
Gulf Keystone: +44 (0) 20 7514 1400
Aaron Clark, Head of Investor Relations 4 aclark@gulfkeystone.com
FTI Consulting +44 (0) 20 3727 1000
Ben Brewerton
5 GKP@fticonsulting.com
Nick Hennis
or visit: 6 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 7 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.
══════════════════════════════════════════════════════════════════════════
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
══════════════════════════════════════════════════════════════════════════
ISIN: BMG4209G2077
Category Code: MSCM
TIDM: GKP
LEI Code: 213800QTAQOSSTNTPO15
Sequence No.: 251300
EQS News ID: 1658553
End of Announcement EQS News Service
══════════════════════════════════════════════════════════════════════════
8 fncls.ssp?fn=show_t_gif&application_id=1658553&application_name=news&site_id=refinitiv
References
Visible links
1. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=62140dbf62560135e0f124ec56b377a6&application_id=1658553&site_id=refinitiv&application_name=news
2. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=58c0cfff46265668d305b25996f8bbc9&application_id=1658553&site_id=refinitiv&application_name=news
3. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=a8056e6bc07906a9abbd913722991143&application_id=1658553&site_id=refinitiv&application_name=news
4. mailto:aclark@gulfkeystone.com
5. mailto:GKP@fticonsulting.com
6. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=8d526d3701dabe9a2ff9507b71394df8&application_id=1658553&site_id=refinitiv&application_name=news
7. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=6965f2bb1ddcf50ad2dd09b21a93cfc7&application_id=1658553&site_id=refinitiv&application_name=news
============