8 October
2024
Gulf Keystone Petroleum Ltd.
(LSE: GKP)
("Gulf
Keystone", "GKP", "the Group" or "the Company")
Update on shareholder
distributions
Declaration of $20 million
interim dividend
Launch of up to $10 million
share buyback programme
Gulf Keystone, a leading independent
operator and producer in the Kurdistan Region of Iraq, is pleased
to provide an update on its approach to shareholder distributions
in the current local sales environment.
Jon
Harris, Gulf Keystone's Chief Executive Officer,
said:
"We have long recognised the importance of distributions to
Gulf Keystone shareholders and we were pleased to be able to
restart returns of excess cash earlier in the year with free cash
flow generation from local sales. As our liquidity continues to
improve, we are today setting out an updated approach to
shareholder distributions in the current local sales environment,
which includes plans to review the
Company's capacity to declare an interim dividend on a semi-annual
basis around our Full Year and Half Year Results. In line with this
approach, we have decided to declare a $20 million interim dividend
and initiate a share buyback programme of up to $10
million."
Update on shareholder distributions
Gulf Keystone is today setting out
an updated approach to shareholder distributions in the current
local sales environment to enable investors to better evaluate the
prospect of future returns ahead of the
restart of Kurdistan exports. While local sales
remain difficult to predict beyond the near term (given market
demand dynamics or the upcoming PF-1 shutdown planned for
safety-critical upgrades and maintenance in November), demand for
Shaikan Field crude has continued to be robust. Gross average
production was c.48,500 bopd in September and c.45,900 bopd in
October to date - with realised prices stable at c.$27-28/bbl -
bringing 2024 year-to-date average production to c.42,300 bopd as
at 6 October 2024 and enabling free cash flow generation. The
Company's cash balance was $110 million as at 7 October
2024.
The Company is committed to
returning excess cash to shareholders. Looking ahead, the Board
plans to review the Company's capacity to declare an interim
dividend on a semi-annual basis around the time of the Full Year
Results and Half Year Results. Furthermore, share buybacks will be
considered opportunistically throughout the year.
In determining the level of
shareholder distributions, the Board will assess the Company's
liquidity needs to:
- fund essential investment in the
Shaikan Field focused on safety, reliability and maintaining and
optimising production levels, with a year of capital expenditures
and costs evaluated as the primary reference point
- ensure the Company is able to
transition successfully from local sales to the restart of
Kurdistan exports and normalisation of Kurdistan Regional
Government ("KRG") payments
The Board will also assess the
Company's operating environment, in particular the outlook for
local sales volumes and prices.
Following the reopening of the
export pipeline and normalisation of payments by the KRG, the Board
plans to provide an update on the Company's approach to
distributions.
$20
million interim dividend
Following the recent publication of
the Company's Half Year Results, Gulf Keystone today announces the
declaration of a $20 million interim dividend. The dividend is
equivalent to 9.216 US cents per Common Share based on the
Company's total issued share capital as at 7 October 2024 and will
be paid on 31 October 2024, based on a record date of 18 October
2024 and ex-dividend date of 17 October 2024. Shareholders will
have the option of being paid the dividend in either GBP or USD,
with the default currency GBP.
Launch of up to $10 million share buyback
In line with the Company's updated
approach to shareholder distributions, the Company has decided to
initiate a share buyback programme (the "Buyback Programme") of the
Company's Common Shares of $1.00 each ("Shares") for up to a
maximum aggregate consideration of $10 million (the "Maximum
Amount").
The Buyback Programme will be
executed in accordance with the Company's authority to make
on-market purchases of Shares which was approved by shareholders at
the Company's AGM on 21 June 2024.
The Company has entered into an
agreement with its brokers, Canaccord Genuity Limited ("Canaccord
Genuity") and Peel Hunt LLP ("Peel Hunt") (together the "Brokers"),
to carry out on-market purchases of Shares up to the Maximum Amount
within agreed parameters on an irrevocable and non-discretionary
basis. Purchases of Shares will be made on the Company's behalf in
accordance with the agreement with the Brokers and may continue
independently of and uninfluenced by the Company during any closed
period to which the Company is subject and/or if the Company comes
into possession of inside information. The Company has agreed the
Buyback Programme will commence immediately and will run to the
earlier of its completion or 31 December 2024.
So long as the Company is not in a
closed period to which it is subject nor in possession of inside
information (an "Open Period") the Company may elect to terminate
the non-discretionary nature of the mandate. The Company may
subsequently choose to reinstate
the non-discretionary mandate of the Buyback
Programme provided that the Company is in an Open Period at that
time.
The Buyback Programme will be
carried out on the London Stock Exchange and will be implemented
within certain agreed parameters, including the price parameters
under the relevant shareholder authority and, except as disclosed
in this announcement, the safe harbour provisions set out in the
Market Abuse Regulation (EU) 596/2014 (as it forms part of UK law
pursuant to the European Union (Withdrawal) Act 2018) (the
"Regulations") and the applicable laws and regulations of the
London Stock Exchange.
A buyback of Shares on any trading
day may represent a significant portion of the daily trading
volumes in the Shares and may exceed 25% of the average daily
trading volume specified in the safe harbour provisions of the
Regulations dealing with buyback programmes and accordingly the
Company may not benefit from the exemption in Article 5(1) of that
regulation.
The sole purpose of the Buyback
Programme is to reduce the capital of the Company. As such, all
Shares purchased under the Buyback Programme will be
cancelled.
The Company will make announcements
and publish on its website details of any Share
repurchases.
The information contained within
this announcement is deemed to constitute inside information as
stipulated under the Regulations. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain and the Company confirms that it currently has no
inside information.
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.
