Last checked at 11 Mar 2019 07:00
11 March 2019
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 pleased to provide an operational and corporate update.
Operational
· Operational activity continues at the Shaikan Field to complete the debottlenecking programme in 2019, in order to achieve the near-term production target of 55,000 bopd in Q1 2020
· Progress is continuing with the export pipeline from PF-1 to the main export pipeline, which remains on schedule to become operational mid-year, at which point trucking of crude oil will be eliminated
· The SH-1 workover to replace the existing tubing with larger bore tubing, has now been successfully concluded. The result was positive with an increase in production from the well of approximately 50% to over 6,500 bopd
· The IOT Rig 1 has been demobilised. It will now complete a short workover for another operator nearby before returning to Shaikan for the remaining workovers in the 55,000 bopd expansion programme. This will include the SH-3 tubing change-out, along with installation of Electric Submersible Pumps ("ESPs") in wells SH-5, SH-10 and SH-11
· DQE's Rig 40 is currently being prepared ahead of the imminent Jurassic drilling campaign, which remains on schedule to be mobilised for the SH-H well later this month
Corporate
· A renewal of the crude oil sales agreement has been signed between Gulf Keystone Petroleum International Ltd and the Kurdistan Regional Government ("KRG")
o The KRG will purchase Shaikan crude oil directly injected at PF-2 into the Atrush export pipeline at the monthly average Dated Brent oil price minus a total discount of c.$21 per barrel for crude
o Until the PF-1 pipeline is completed, the KRG will continue to purchase crude oil delivered by truck at a discount of c.$22 per barrel
o The above discounts account for quality, domestic and international transportation costs
o The agreement is effective from 1 January 2019 until 31 December 2020
· The Company has received final clearance from Sonatrach in relation to the Ferkane Permit (Block 126). This officially marks Gulf Keystone's exit from its Algerian operations.
o This positive development will allow the Company to release $10 million of past liabilities
Outlook
· Despite Q1 production having been affected by SH-1 being offline for the workover, and the export system being shut-down for maintenance for a week earlier this month, the Company maintains its 2019 gross average production guidance in the range of 32,000 - 38,000 bopd
The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.
Enquiries:
Gulf Keystone Petroleum: | +44 (0) 20 7514 1400 |
Jón Ferrier, CEO |
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Sami Zouari, CFO |
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Celicourt Communications: | +44 (0) 20 7520 9266 |
Mark Antelme Jimmy Lea |
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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 and the operator of the Shaikan Field with current production capacity of 40,000 barrels of oil per day. 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.