Gulf Keystone Petroleum Ltd (GKP) Operational & Corporate
Update 27-Apr-2023 / 07:00 GMT/BST
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27 April 2023
Gulf Keystone Petroleum Ltd. (LSE: GKP)
("Gulf Keystone", "GKP" or "the Company")
Operational & Corporate Update
Gulf Keystone, a leading independent operator and producer in
the Kurdistan Region of Iraq ("KRI" or "Kurdistan"), is today
providing an update on operational and corporate activity and 2023
guidance following the shut-in of the Iraq-Turkey pipeline on 25
March 2023.
Jon Harris, Gulf Keystone's Chief Executive Officer, said:
"Gulf Keystone was on track to deliver another year of strong
profitable production growth and robust cash flow generation until
the Iraq-Turkey pipeline arbitration award resulted in the
suspension of pipeline exports. March production prior to the
pipeline suspension averaged c.53,700 bopd with plans to bring on
SH-18 in Q2 2023 and ongoing facilities expansion activities.
The lack of crude oil exports for a month has further
exacerbated delays in KRG payments to international oil companies
with uncertainty on when consistent monthly payments will resume
and when the current overdue amount of USD102 million net to GKP
will be paid.
While we continue to believe that the pipeline shut-in is
temporary and the KRG will resume more normalised payments, we are
prudently taking action to preserve liquidity by targeting a
reduction of costs across the business. We are closely monitoring
the situation and will take further appropriate action as
required."
Operational
-- Up to the Iraq-Turkey pipeline shut-in on 25 March 2023,
gross average production in 2023 of c.49,200bopd and in March 2023
of c.53,700 bopd, including five days in excess of 55,000 bopd
-- Following the suspension of exports, GKP produced at reduced
rates into storage facilities prior toshutting in production at
PF-1 on 31 March 2023 and at PF-2 on 13 April 2023
-- The suspension has resulted in a gross production deferment
to date of around 1.6 million barrels, orapproximately 4,400 bopd
on a full-year basis
-- The Company continues to believe that the suspension of
exports will be temporary and is ready to resumeproduction
immediately, although no official timeline to restart pipeline
operations has been publicly announced bythe Kurdistan Regional
Government ("KRG")? The Company understands that discussions
between the KRG and the Iraqi Ministry of Oil are ongoing
toimplement the framework agreement announced on 4 April 2023
-- Upon the resumption of exports, production will be gradually
ramped up with the objective of safelyreturning to full export
capacity? The drilling of SH-18 was recently completed and the well
is now being hooked-up. We expect the wellto be available for
start-up in Q2 2023, in line with prior guidance
Financial
-- The Company continues to engage with the KRG regarding the
delays to oil sales payments? While the Company has received USD66
million net from the KRG in 2023 for August and September 2022
oilsales, overdue receivables for the months of October 2022 to
January 2023 total USD102 million net on the basisof the KBT
pricing mechanism
-- Net capital expenditures to the end of April 2023 are
estimated at USD45 million net, including completionof SH-17 and
SH-18, well workovers, well pad preparation, long lead items and
expansion of production facilities
-- Cash balance of USD99 million at 26 April 2023
Outlook
-- Given the ongoing suspension of exports and continued delays
to KRG payments, the Company is focussed onpreserving liquidity and
is targeting a reduction of costs across the business, while
maintaining a strong focus onsafety and long-term asset
reliability
-- Consequently, the Company is significantly reducing planned
net capital expenditures to focus on onlysafety critical and
unavoidable contractual commitments? While our review is ongoing,
we currently expect May to December 2023 net capital expenditures
ofUSD35-40 million ? Full year 2023 net capital of expenditures are
currently estimated at USD80-85 million (prior
guidance:USD160-USD175 million)
-- The Company is implementing initiatives to reduce Opex and
G&A. However, until pipeline operations resumeand the overall
production impact from the export suspension is known, the Board is
suspending production and grossOpex per barrel guidance
-- As part of its ongoing review, the Board is considering the
previously declared final 2022 ordinaryannual dividend of USD25
million
-- The Board continues to review the implications of the current
situation and is considering necessaryoperational, financial and
legal measures to protect the Company's interests during this
period
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) no. 596/2014 (as it forms part of
domestic law by virtue of the European Union (Withdrawal) Act
2018).
Enquiries:
Gulf Keystone: +44 (0) 20 7514 1400
Aaron Clark, Head of Investor Relations aclark@gulfkeystone.com
FTI Consulting +44 (0) 20 3727 1000
Ben Brewerton
GKP@fticonsulting.com
Nick Hennis
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.
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Dissemination of a Regulatory Announcement, transmitted by EQS
Group. The issuer is solely responsible for the content of this
announcement.
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ISIN: BMG4209G2077
Category Code: MSCM
TIDM: GKP
LEI Code: 213800QTAQOSSTNTPO15
Sequence No.: 239838
EQS News ID: 1618379
End of Announcement EQS News Service
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