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Gulf Keystone Petroleum Ltd (GKP)
Operational & Corporate Update
13-Dec-2023 / 07:00 GMT/BST
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13 December 2023
Gulf Keystone Petroleum Ltd. (LSE: GKP)
(“Gulf Keystone”, “GKP”, “the Group” or “the Company”)
Operational & Corporate Update
Gross average sales of c.28,800 bopd since last market update on 25
September
Local sales continuing to cover monthly costs despite fluctuation in
volumes
Gulf Keystone, a leading independent operator and producer in the
Kurdistan Region of Iraq, today provides an operational and corporate
update.
Jon Harris, Gulf Keystone’s Chief Executive Officer, said:
“We remain focused on preserving liquidity by maximising local sales,
maintaining strict cost control and proactively managing accounts payable.
We have continued to more than cover our monthly costs of around $6
million and while local market demand remains difficult to predict and we
have seen volumes fluctuate, we continue to pursue opportunities to
increase sales. There remains no official timeline for the reopening of
the Iraq-Turkey Pipeline but political and commercial negotiations between
the Kurdistan Regional Government and the Government of Iraq are
progressing and we believe the situation will be resolved. As an industry,
we are emphasising the importance of payment surety for past and future
oil exports and the preservation of our current Production Sharing
Contract economics.”
Operational
• Rigorous focus on safety maintained
◦ No lost time incidents for over 330 days
• Local sales of Shaikan Field crude continue in absence of pipeline
exports
◦ Gross average sales of c.28,800 bopd via trucking and pipeline
between the date of our last market update, 25 September, and 11
December, reflecting: c.30,000 bopd in September, c.37,200 bopd
in October, c.21,500 bopd in November and c.21,900 bopd between
1-11 December
◦ Fluctuation in volumes primarily reflects competition with
increased supply from other producers in the region, associated
refinery capacity constraints and seasonal effects on crude
demand
◦ Realised prices have continued to average around $30/bbl, in line
with local market pricing, while the Company is receiving advance
payments for its net entitlement of 36% of gross sales revenue
Financial
• Current local sales volumes and realised prices continue to enable GKP
to more than cover its estimated monthly costs of around $6 million in
H2 2023 (breakeven at gross sales of c.18,500 bopd and $30/bbl)
• Cash balance of $85 million at 12 December 2023 with no debt
Outlook
• The Company remains focused on preserving liquidity by maximising
local sales, maintaining strict cost control and proactively managing
accounts payable
• Opportunities to increase local sales continue to be pursued;
nonetheless, local market demand remains variable
• Estimated monthly net capex, operating costs and other G&A in H2 2023
remain around $6 million, in line with expectations
• Expect to maintain monthly capex and cost run rate of around $6
million into 2024
• The Company continues to believe that pipeline exports will restart:
◦ Political and commercial negotiations between the Government of
Iraq (“GOI”) and the Kurdistan Regional Government (“KRG”) are
ongoing
◦ The Association of the Petroleum Industry in Kurdistan
(“APIKUR”), of which GKP is a founding member, continues to
engage with the KRG and has recently met with the GOI
◦ We continue to emphasise the importance of payment surety for
past and future oil exports and that the current economics of the
Production Sharing Contracts (“PSCs”), which are governed by
English Law, must be preserved
Board composition
The Board remains committed to meeting the required targets on
independence and diversity under the 2018 UK Corporate Governance Code,
which the Company voluntarily adheres to, and UK Listing Rules. It is
currently engaged in an independent non-executive director search process
to ensure compliance. However, the pace of the process has been controlled
to reflect the Company’s current focus on cost reduction and liquidity
preservation.
2023 AGM shareholder consultation
The Company has conducted a shareholder consultation following the voting
at the 2023 AGM. The summary of the consultation is available on GKP’s
website: 1 www.gulfkeystone.com/investors/agm/.
Enquiries:
Gulf Keystone: +44 (0) 20 7514 1400
Aaron Clark, Head of Investor Relations
& Corporate Communications 2 aclark@gulfkeystone.com
FTI Consulting +44 (0) 20 3727 1000
Ben Brewerton
3 GKP@fticonsulting.com
Nick Hennis
or visit: 4 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 5 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.
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Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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ISIN: BMG4209G2077
Category Code: MSCH
TIDM: GKP
LEI Code: 213800QTAQOSSTNTPO15
Sequence No.: 291537
EQS News ID: 1795511
End of Announcement EQS News Service
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References
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2. mailto:aclark@gulfkeystone.com
3. mailto:GKP@fticonsulting.com
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