(Alliance News) - Gulf Keystone Petroleum Ltd on Thursday reported a return to profit in the first half as the oil producer benefitted from production growth and a sharp rise in oil prices.
Shares in the oil operator and producer in the Kurdistan Region of Iraq were 11% higher in London on Thursday at 173.00 pence each.
In the six months to June 30, Gulf swung to a pretax profit of USD64.8 million compared to a USD32.6 million loss a year earlier.
Revenue surged to USD130.7 million from USD49.9 million.
"I am pleased to report strong operational and financial performance in the first half of 2021, despite the continuing challenges of the Covid-19 pandemic. Our leverage to the recovery in oil prices, combined with safe and reliable production towards the top end of our guidance range and a continued sharp focus on costs, has resulted in significant cash flow generation," Chief Executive Jon Harris said.
Average gross production in the first half was up 17% year on year to 43,516 barrels of oil per day from 37,159 and at the upper end of the company's guidance.
For 2021, Gulf is tightening its average gross production guidance range to 42,000 to 44,000 from 40,000 to 44,000.
Aiding the return to profit was a rise in oil prices, which more than doubled to USD43.7 per barrel from USD19.1.
"The early restart of the drilling campaign in June enables us to maintain production growth momentum and to drill an additional well, SH-G, in 2021 after completion of SH-14, the final well in the 55,000 bopd investment programme. SH-14 is expected to come onstream in the fourth quarter, while we expect SH-G to come onstream in the first quarter of 2022," Harris added.
By Paul McGowan; paulmcgowan@alliancenews.com
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Gulf Keystone Petroleum (GKP)