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RNS Number : 0576H
Gulf Keystone Petroleum Ltd.
14 May 2014
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indirectly, in whole or in part in or into the United States or any
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information contained herein) does not contain or constitute an
offer to sell or the solicitation of an offer to purchase, nor
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14 May 2014
Gulf Keystone Petroleum Ltd. (LSE: GKP)
Interim Management Statement
Gulf Keystone Petroleum Limited ("Gulf Keystone" or "the
Company") is pleased to present the Company's first Interim
Management Statement for the period from 1 January 2014 to
today.
Overview
On 25 March 2014, Gulf Keystone's common shares were admitted,
with a standard listing, to the Official List of the United Kingdom
Listing Authority and to trading on the London Stock Exchange plc's
("LSE") main market for listed securities ("Main Market"). The move
from AIM to the Main Market was a significant milestone in the
growth and transition of Gulf Keystone from an independent oil and
gas explorer to an established exploration and production
company.
On 17 April 2014, Gulf Keystone closed on a US$250 million debt
financing that will fully fund the Company and its development plan
into 2015. Under that plan, the Company expects to achieve an
increase of production from Shaikan PF-1 and PF-2 to 40,000 gross
barrels of oil per day ("bopd") by year-end 2014 from the current
level of 15,000-16,000 gross bopd. Currently, average Shaikan
production for the year to December 2014 is expected to be
equivalent to approximately 20,000-25,000 gross bopd.
Gulf Keystone commenced Shaikan crude oil exports by truck to
Turkey in December 2013 and the first export sales in late January
2014. In Q1 2014, gross export deliveries by truck totalled 836,205
barrels. Gross domestic sales in Q1 2014 totalled 24,767 barrels,
with sales realisations of US$42 per barrel and further 7,163
barrels of gross domestic sales in April 2014. Production revenues
are expected to increase significantly in H2 2014.
In May 2014, Gulf Keystone received a US$6.46 million gross
payment for the first Shaikan crude oil export sales. The Company
records revenue in its accounts on a cash received basis resulting
in a time lag between the physical production and shipment of crude
oil and payment. The time lag can be significant with an
approximate US$24 million net outstanding to the Company, after the
first payment of US$6.46 million gross received in May 2014, from
the commencement of oil sales in January 2014 to date. This
therefore gives rise to uncertainty in the timing of revenue
recognition and guidance for 2014. At this time, revenue guidance
for 2014 is in the range of US$150 million to US$180 million which
reflects the Company's current view on cash payment and current
production levels.
Production and Infrastructure
-- Shaikan PF-1 is currently producing from three wells, Shaikan-1, -3 and -4.
-- Hook-up of Shaikan-8 and Shaikan-7 to PF-1 is expected later
in 2014; flowlines are being ordered.
-- Shaikan PF-2 has been commissioned and the start-up process
has commenced with live oil flowing from Shaikan-5 to the
production facility, which will also be producing from Shaikan-2
and -10.
-- Flowlines are being ordered for an additional development
well to be drilled and hooked-up to Shaikan PF-2.
Exploration
-- Due to a number of mechanical failures in the course of the
drilling operations, the Shaikan-7 deep exploration well has not
been able to achieve its objective and will now be converted into a
Jurassic producer and tied into Shaikan PF-1. Based on well logs,
Shaikan-7 should become a prolific producing well and the full cost
of the well should be recovered within six months from first
production.
-- A new deep exploration well to test the previously undrilled
deep Triassic and potentially Permian horizons, which is a
commitment under the approved Shaikan Field Development Plan, will
be added to the drilling schedule.
Development and Appraisal
-- Appraisal of the Sheikh Adi discovery is ongoing with Sheikh
Adi-3 currently drilling ahead at 2,150 metres after having
experienced some mechanical difficulties.
-- Early production from the Bijell Extended Well Test Facility
on the Akri-Bijeel block commenced in March 2014 expected to
ramp-up to 10,000 bopd by the end of 2014.
-- Field Development Plan for the Bijell and Bakrman discoveries
on the Akri-Bijell block has been submitted to the Kurdistan
Regional Government's Ministry of Natural Resources by MOL
Hungarian Oil & Gas plc, the operator.
-- Appraisal of the Bijell and Bakrman discoveries is ongoing
with wells operating at Bijell-2, -4, -6 and Bakrman-2
respectively.
Finance
-- Successful debt offering of US$250 million in three-year
senior unsecured notes due April 2017, privately placed in
accordance with Reg S/144A with institutional investors in Europe,
the US and Asia.
-- As of 30 April 2014, cash, cash equivalents and liquid
investments of approximately US$270 million.
Corporate
-- Mr Chris Garrett retired from his position as the Company's
Vice President Operations after 10 years with Gulf Keystone. Mr
John Stafford, previously Geology and Geophysics Manager, has been
appointed Vice President Operations effective 3 May 2014.
-- Gulf Keystone's Annual General Meeting will be held on 17 July 2014 in Paris, France.
Enquiries:
Gulf Keystone Petroleum: +44 (0) 20 7514 1400
Simon Murray, Non-Executive Chairman
Todd Kozel, Chief Executive Officer
Anastasia Vvedenskaya,
Head of Investor Relations
The Dilenschneider Group +44 (0) 7795484387
Terence Franklin
or visit: www.gulfkeystone.com
Notes to Editors:
-- Gulf Keystone Petroleum Ltd. (LSE: GKP) is an independent oil
and gas exploration, development and production company focused on
exploration in the Kurdistan Region of Iraq.
-- Gulf Keystone Petroleum International (GKPI) holds Production
Sharing Contracts for four exploration blocks in Kurdistan, the
Shaikan, Sheikh Adi, Ber Bahr and Akri-Bijeel blocks.
-- GKPI is the Operator of the Shaikan Block, which is a major
commercial discovery, with a working interest of 75% and is
partnered with Kalegran Ltd. (a 100% subsidiary of MOL Hungarian
Oil and Gas plc.) and Texas Keystone Inc., which have working
interests of 20% and 5% respectively. Texas Keystone Inc. holds its
interest in trust for Gulf Keystone, pending transfer of its
interest to the Company.
-- Gulf Keystone is moving into the large-scale phased
development of the Shaikan field targeting 100,000 bopd of
production capacity during Phase 1 of the Shaikan Field Development
Plan following its approval in June 2013.
Disclaimer
This announcement contains certain forward-looking statements.
These statements are made by the Company's 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 uncertainties, including both economic
and business factors, underlying such forward-looking information.
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 communication and the information contained herein is not
an offer of securities for sale in the United States. Securities
may not be offered or sold in the United States unless they are
registered or are exempt from registration. Any public offering of
securities to be made in the United States would be made by means
of a prospectus that would contain detailed information about the
company and its management, as well as financial statements. The
company does not intend to register any portion of this offering in
the United States or to conduct a public offering in the United
States or any other jurisdiction. Any public offering of securities
to be made in the United States would be made by means of a
prospectus that would contain detailed information about the
Company and its management, as well as financial statements. Copies
of this communication are not being, and should not be, distributed
in or sent into the United States.
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outside the United Kingdom or (ii) persons who have professional
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The company news service from the London Stock Exchange
END
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