13 Dec 2023 07:00
Gulf Keystone Petroleum Ltd (GKP) Operational & Corporate Update 13-Dec-2023 / 07:00 GMT/BST
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: www.gulfkeystone.com/investors/agm/.
Enquiries:
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. Dissemination of a Regulatory Announcement, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement. |
| ISIN: | BMG4209G2077 |
| Category Code: | MSCH |
| TIDM: | GKP |
| LEI Code: | 213800QTAQOSSTNTPO15 |
| Sequence No.: | 291537 |
| EQS News ID: | 1795511 |
| End of Announcement | EQS News Service |
UK Regulatory announcement transmitted by EQS Group AG. The issuer is solely responsible for the content of this announcement.
Gulf Keystone Petroleum (GKP)