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Shares of Gulf Keystone Petroleum (LSE:GKP) were up 12.62% today to 29.00, just one day after hitting a new 52-week low of 24.77. Actually, its a six-year low – going all the way back to July 2009. At its current 29.00 pence, GKP shares are at 32% of its 52-week high of 89.75 and at 6.9% of its all-time high of 417.00, which it reached on 13 February 2012.
It’s Not Easy
Kermit the Frog has always said that “It’s not easy being green.” He should be an oil company drilling in the Kurdistan region of Iraq. He’s soon be singing another song. With the price of oil as it has been recently, it’s not easy being any oil company, but the adversities that Gulf Keystone has had to continually face are extraordinary.
GKP’s overall strategy is to “move to the large-scale staged development of the Shaikan field with the goal of achieving 100,000 bopd in the course of Phase 1 of the development and full plateau production thereafter. The phased development approach to the implementation of the Shaikan Field Development Plan will enable GKP to achieve a significant ramp up of production, whilst ensuring the company retains flexibility in financing the development of the giant field, bringing them closer to the goal of fully financing our activities from production cash flows.”
The company’s priorities for 2015 are to “maintain stable Shaikan production rates of 40,000 bopd, establish a regular payment cycle for past and future Shaikan crude oil export sales, and finalize and implement a pipeline access solution for Shaikan crude.”
It’s Easier Said Than Done
Anyone can have a vision, a strategy, and a plan, but not everyone can pull it off. For GKP (and others) operating in the desolate, politically-unstable, war-torn region of northern Iraq, not day is easy. About the best that can be said is that some days are better than others, although probably not many.
But GKP Is Getting It Done
In its most recent operational report (that would be today), the company reported that “all production and truck loading operations currently continue without interruption at both Shaikan production facilities (PF-1 and PF-2) in a safe and secure manner,” and that production goals are still being met.
Company officials seem to be making progress with cash flow issues caused primarily by issues between the Kurdish Regional Government and the Iraq national government.
GKP has spent months attempting to establish the pipeline access that is part of its 2015 strategic plan. Doing so would reduce costs, time, and risk associated with transporting the crude by truck to Turkey. But, as GKP’s luck would have it, the pipeline carrying Kurdish crude to port in Turkey was damaged by an apparent terrorist attack on 29 July, during the conflict against ISIS just 18 kilometers inside the Turkish border.
On the bright side, GKP has fairly ready access to the trucks it has been using all along to keep the recovered crude moving to market. Once the pipeline is repaired, deliveries to it and through it will resume.
Call it what you will: intestinal fortitude, persistence, a stiff upper lip, or a passion to succeed, GKP continues to prove that it is capable of achieving its corporate goals even when the odds are stacked against them. Not an investment for the weak at heart, GKP continues to display all the right stuff that will ultimately drive its share price well beyond its once lofty 417.00
Only positive objective article written by anyone regarding the company in a long time! A lot of other articles written about the company show a lot of ignorance regarding its workings and the politics of the area in which it operates!