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(Alliance News) - Oil & gas producer Gulf Keystone Petroleum Ltd affirmed its full-year production forecast and said it will reward its shareholders by launching a second USD25 million share buyback programme.
The firm, which operates the Shaikan project in the Kurdistan region of Iraq, said the project achieved an average gross production in for the year up to November 30 of 32,127 barrels of oil per day. In November alone, gross production averaged 40,582 barrels of per day.
The company added: "Gulf Keystone Petroleum is therefore on track to meet its original gross production guidance for 2019 of 32,000-38,000 barrels of oil per day."
The SH-12 well, which came into production on November 13, has had an output rate of 4,600 barrels of oil per day, in line with expectations.
Gulf Keystone encountered a fault in the second well of the drilling campaign, SH-9, forcing it to side-track the well and alter the drilling schedule.
As a result, the company pushed back its 55,000 barrels of oil per day production target to the third quarter of 2020. It initially had eyed achieving this milestone in the first half of 2020.
The firm said: "The well, which was spudded on 19 October, encountered a faulted section requiring the well to be side-tracked to the Jurassic reservoir target.
"The SH-9 side-track necessitates a revision to the drilling schedule. Assuming a duration of one month for the side-track, the company now expects to reach the 55,000 barrels of oil per day gross production target at Shaikan in the third quarter of 2020."
Turning to its new USD25 million share buyback programme, Gulf Keystone said an initial tranche of USD15 million will be initiated on Tuesday.
The second scheme, which follows a USD25 million buyback it began in July and closed in October, is due to Gulf Keystone's "robust cash position" and its confidence in the Shaikan project.
The July to October programme saw 8.3 million shares purchased at a volume-weighted average price of 232.62 pence apiece.
The company's stock was trading 6.1% higher at 210.00 pence each in London on Tuesday morning.
Chief Executive Jon Ferrier said: "We are pleased to confirm that we are on track to achieve our initial average production guidance for 2019, and whilst the need to side-track SH-9 has slightly impacted our timing guidance for delivering 55,000 barrels of oil, we remain on course to achieve further significant production growth in 2020.
"We are also pleased to announce the launch of a second USD25 million share buyback programme, which is in line with our focus on returning value to shareholders, whilst retaining the capital necessary to grow the business."
By Eric Cunha; ericcunha@alliancenews.com
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