============
Gulf Keystone Petroleum Ltd (GKP)
Operational & Corporate Update
09-Aug-2023 / 07:00 GMT/BST
══════════════════════════════════════════════════════════════════════════
9 August 2023
Gulf Keystone Petroleum Ltd. (LSE: GKP)
(“Gulf Keystone”, “GKP” or “the Company”)
Operational & Corporate Update
In advance of the publication of its 2023 Half Year Results on 31 August
2023, Gulf Keystone, a leading independent operator and producer in the
Kurdistan Region of Iraq (“KRI” or “Kurdistan”), is today providing an
update on operational and corporate activity.
Jon Harris, Gulf Keystone’s Chief Executive Officer, said:
“While no official timeline has been announced, we continue to believe the
suspension of Kurdistan crude exports will be temporary and that the KRG
will resume oil sales payments in due course. As political negotiations
continue, we remain focused on what is within our control to preserve and
bolster liquidity. We are pleased to have commenced local sales in July
and partially restarted Shaikan Field production, increasing gross average
sales volumes to 11,700 bopd in August to date while receiving payments in
advance. We are actively pursuing additional local sales opportunities,
although pricing and volumes remain unpredictable. At the same time, we
are continuing to reduce our costs, pursue inventory sales and proactively
manage our accounts payable. We look forward to providing a further update
on progress at our half year results later this month.”
Following the shut-in of the Iraq-Turkey pipeline on 25 March 2023,
exports from the Shaikan Field remain suspended and no further oil sales
payments have been received from the Kurdistan Regional Government (“KRG”)
since the payment of the September 2022 invoice of $26.9 million net on 9
March 2023. Outstanding receivables of $151 million net are owed to the
Company for the months of October 2022 to March 2023 on the basis of the
KBT pricing mechanism.
While no official timeline has been announced, GKP continues to believe
that the suspension of exports will be temporary and that the KRG will
resume payments to GKP and other International Oil Companies (“IOCs”)
operating in Kurdistan in due course.
In particular, the Company notes that:
• Discussions between the KRG, the Iraqi Ministry of Oil and Turkish
authorities regarding the restart of pipeline operations remain
ongoing
• The approval of the 2023-2025 Iraqi budget marks significant progress
towards creating a new framework for KRG production that is recognised
by Baghdad in return for budget transfers
◦ While there is the potential for budget transfers to broadly
cover the KRG’s monthly expenditures, including ongoing IOC
receivables, certain aspects to fully implement the budget and
determine monthly transfer amounts remain unclear and are the
subject of ongoing negotiations between Kurdistan and Iraq
• The KRG Prime Minister Masrour Barzani has assured GKP and other IOCs
operating in Kurdistan that production sharing contracts will be
honoured and outstanding receivables will be repaid
In the interim, GKP remains focussed on preserving and bolstering its
liquidity by exploring opportunities to increase local crude sales,
further reduce costs, pursue inventory sales and proactively manage
accounts payable:
• On 19 July 2023, the Company commenced sales to the local market by
restarting production and trucking operations from PF-1. Crude sales
averaged around 4,900 bopd gross for the period from 19 July to 31
July. Since the beginning of August, volumes have increased, with
gross average sales of around 11,700 bopd. Volumes are sold at
realised prices in line with the local market, with advance payments
received in accordance with production sharing contract entitlements
• The Company is actively pursuing additional opportunities to increase
local sales further. While a number of parties have expressed interest
in purchasing Shaikan crude oil, the outlook for volumes and pricing
remains difficult to predict
• The Company continues to aggressively reduce all costs across the
business and remains focused on maintaining net capital expenditures,
operating costs and G&A expenses at a monthly run rate of around $6
million from July 2023, in line with previous guidance. The Company
continues to explore options to further reduce costs
• The Company’s cash balance as at 8 August 2023 was $80 million with no
outstanding debt
Enquiries:
Gulf Keystone: +44 (0) 20 7514 1400
Aaron Clark, Head of Investor Relations 1 aclark@gulfkeystone.com
FTI Consulting +44 (0) 20 3727 1000
Ben Brewerton
2 GKP@fticonsulting.com
Nick Hennis
or visit: 3 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 4 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.: 263256
EQS News ID: 1699005
End of Announcement EQS News Service
══════════════════════════════════════════════════════════════════════════
5 fncls.ssp?fn=show_t_gif&application_id=1699005&application_name=news&site_id=refinitiv
References
Visible links
1. mailto:aclark@gulfkeystone.com
2. mailto:GKP@fticonsulting.com
3. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=8d526d3701dabe9a2ff9507b71394df8&application_id=1699005&site_id=refinitiv&application_name=news
4. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=6965f2bb1ddcf50ad2dd09b21a93cfc7&application_id=1699005&site_id=refinitiv&application_name=news
============