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Pin to quick picksGulf Keystone Petroleum Regulatory News (GKP)

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Operational and Corporate Update

19 Jun 2020 07:00

RNS Number : 4386Q
Gulf Keystone Petroleum Ltd.
19 June 2020
 

 

19 June 2020

Gulf Keystone Petroleum Ltd. (LSE: GKP)

("Gulf Keystone", "GKP" or "the Company")

 

Operational and Corporate Update

 

Gulf Keystone Petroleum, a leading independent operator and producer in the Kurdistan Region of Iraq ("Kurdistan" or "Kurdistan Region"), is providing an operational and corporate update in advance of today's Annual General Meeting.

 

Jón Ferrier, Gulf Keystone's Chief Executive Officer, said:

 

"In response to the unprecedented COVID-19 pandemic and macroeconomic conditions, we took decisive actions to preserve liquidity and safeguard the long-term health of the business. We are now well placed to weather the current environment and are able to move quickly back to growth at the right time. Our cost reduction initiatives have been thorough, and I am grateful to our staff and contractors for their commitment and support. Whilst uncertainty around the timing of the end of the crisis persists, the partial oil price recovery gives us some grounds for optimism about the future and our return to delivering the significant untapped value in Shaikan."

 

Operational

Ø Maintaining strong focus on safety with zero LTIs recorded in 2020.

Ø In order to protect all personnel, the Company continues to actively manage its working practices in light of the COVID-19 pandemic observing all of the appropriate protection measures.

Ø Despite the challenges presented by COVID-19, production operations continue at c.36,000 bopd (gross). Average gross production for the year to date is 37,232 bopd.

Ø DQE's Rig 40 has been stacked on site at zero cost, which will aid the timely resumption of drilling activities, when appropriate.

Ø During this period of reduced activity, the Company continues to optimise its plans for a quick and effective restart of the 55,000 bopd expansion project.

 

Financial

Ø As a result of a continued rationalisation of the organisation, expenditures, and contract renegotiations, the Company remains on track to achieve its previously announced target of Opex and G&A savings in excess of 20% in 2020 compared to 2019. On a run-rate basis, we are targeting to achieve savings of c.30%.

o The Company is introducing 2020 guidance for Opex of $2.7 to $3.1 per barrel (vs $3.9 per barrel in 2019).

o The workforce is in the process of being reduced by c.40%, including over 60% of expatriates, due to the reduction in the work programme.

Ø Capex for 2020 remains in the range $40 - $48 million (net), a 50% reduction compared to 2019, of which $30 million (net) had been spent by the end of April 2020.

Ø Cash balance of $144 million as at 17 June 2020.

Ø Payments by the Kurdistan Regional Government to GKP are in line with the peer group, with invoices from March 2020 onwards being settled the following month. There is an ongoing dialogue relating to the payment of invoices for November 2019 to February 2020, aggregating $73 million (net).

 

Corporate

Ø Garrett Soden is to be welcomed back to the Board of GKP as a Non-Independent Non-Executive Director representing funds managed by Lansdowne Partners Austria.

Ø Mr Soden will be formally appointed following completion of the appointment process and will bring valuable financial and industry experience. Mr Soden was a Non-Executive Director between 2016 and 2019 and he has undertaken to conform to UK corporate governance standards in respect of external appointments.

 

Outlook

Ø With the Company's ongoing prudent approach to managing its financial position and the decisive measures taken to reduce its cost structure to preserve liquidity, GKP remains financially resilient to manage through the current macro environment.

Ø Despite a partial recovery in oil price, the Company closely monitors market dynamics and will continue to take the appropriate actions to preserve value in Shaikan.

Ø GKP looks forward to resuming investment and shareholder distributions when conditions allow.

 

 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

 

Enquiries:

 

Celicourt Communications:

+ 44(0) 20 8434 2754

Mark Antelme

Jimmy Lea

 

or visit: 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 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.

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
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Date   Source Headline
21st Aug 20207:00 amRNSTR-1: notification of major holdings
17th Aug 202012:07 pmRNSSecond Price Monitoring Extn
17th Aug 202012:02 pmRNSPrice Monitoring Extension
7th Aug 20207:00 amRNSNotice of Half Year Results
28th Jul 20207:00 amRNSShaikan Payment Update
15th Jul 20209:46 amRNSDirector/PDMR Shareholding
14th Jul 202012:03 pmRNSPrice Monitoring Extension
14th Jul 20207:00 amRNSAppointment of Non-Executive Director
30th Jun 20207:00 amRNSReport on Payments to Govts
26th Jun 20207:00 amRNSRetirement of CEO
19th Jun 20204:30 pmRNSShaikan Payment Update
19th Jun 20201:30 pmRNSResult of AGM
19th Jun 20207:00 amRNSOperational and Corporate Update
28th May 20207:03 amRNSShaikan Payment Update
22nd May 202010:00 amRNSPublication of Annual Report and Accounts
11th May 20207:00 amRNSTR-1: notification of major holdings
1st May 20202:11 pmRNSTR-1
1st May 20207:00 amRNSDirector/PDMR Shareholding
29th Apr 20202:51 pmRNSLong Term Incentive Plan and Deferred Bonus Plan
23rd Apr 20207:00 amRNS2019 Full Year Results
21st Apr 202012:30 pmRNSNotice of Full Year Results
17th Apr 20207:00 amRNSShaikan Payment Update
2nd Apr 20205:00 pmRNSTR-1: notification of major holdings
2nd Apr 20207:00 amRNSShaikan Payment Update
24th Mar 20207:00 amRNSOperational and Corporate Update
23rd Mar 20209:10 amRNSPostponement of 2019 Full Year Results
16th Mar 20207:02 amRNSCompletion of second US$25 million Buyback
16th Mar 20207:00 amRNSImpact of Coronavirus (COVID-19) on operations
13th Mar 20205:40 pmRNSTransaction in Own Shares
12th Mar 20205:19 pmRNSTransaction in Own Shares
12th Mar 20204:31 pmRNSTR-1: notification of major holdings
11th Mar 20206:01 pmRNSTransaction in Own Shares
10th Mar 20205:15 pmRNSTransaction in Own Shares
9th Mar 20205:31 pmRNSTransaction in Own Shares
6th Mar 20205:45 pmRNSTransaction in Own Shares
5th Mar 20205:45 pmRNSTransaction in Own Shares
4th Mar 20206:10 pmRNSTransaction in Own Shares
3rd Mar 20205:45 pmRNSTransaction in Own Shares
2nd Mar 20205:52 pmRNSTransaction in Own Shares
28th Feb 20205:35 pmRNSTransaction in Own Shares
27th Feb 20205:40 pmRNSTransaction in Own Shares
26th Feb 20206:12 pmRNSTransaction in Own Shares
25th Feb 20206:00 pmRNSTransaction in Own Shares
24th Feb 20205:30 pmRNSTransaction in Own Shares
21st Feb 20206:08 pmRNSTransaction in Own Shares
20th Feb 20205:45 pmRNSTransaction in Own Shares
19th Feb 20206:00 pmRNSTransaction in Own Shares
18th Feb 20206:20 pmRNSTransaction in Own Shares
17th Feb 20205:50 pmRNSTransaction in Own Shares
14th Feb 20206:10 pmRNSTransaction in Own Shares

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