Shares in Gulf Keystone Petroleum (GKP), operator of the Shaikan Field in the Kurdistan Region of Iraq, closed up 1.7 percent on Wednesday followingn a trading and operational update.
This is in advance of the Company’s full year results for the period ended 31 December 2016 which will be announced on Thursday 6 April 2017. The information contained herein has not been audited and may be subject to further review and amendment.
- Average gross production for the year at 34,794 barrels of oil per day (“bopd”) – within the upper-end of our 31,000-35,000 bopd guidance
- Cumulative gross payments of $142.5 million received from the Kurdistan Regional Government’s Ministry of Natural Resources (“MNR”)
- Plant uptime (at PF-1 and PF-2) of over 98%, once adjusted for export constraints, and strong safety performance with no lost-time incidents
- The Company completed its financial restructuring on 13 October 2016 with a reinstated debt balance of $100 million and a $25 million equity raise through an Open Offer
- Average gross production during January 2017 was 37,196 bopd with only minor export disruptions, maximum daily production reached 38,384 bopd
- Production data from Shaikan continues to support the interpretations made in the most recent Competent Person’s Report (“CPR”) published 31 August 2016, which reported gross Shaikan 2P Reserves of 622 million barrels of oil (“MMbo”) and gross 2C resources of 239 MMbo as at 30 June 2016.
- The Company is progressing in its ongoing discussions with the MNR regarding commercial and contractual conditions, in particular those around a regular and timely payment cycle, and crude marketing arrangements. Subject to further clarity on these points, the Company looks forward to making further investments to achieve plateau production at nameplate capacity of 40,000 bopd. Accordingly, gross production guidance for 2017 is being set at 32,000-38,000 bopd. Without further investment in the field, beyond maintenance capital, we would expect to achieve the lower-end of our guidance range.
- Management team recently reinforced with the appointment of Stuart Catterall as Chief Operating Officer in January 2017
- Cash position of $104 million as at 31 January 2017
- All Gulf Keystone operations remain safe and secure
Jón Ferrier, Chief Executive Officer, said:
“I am very pleased to announce a strong operational performance during 2016, achieving average daily production at the top of our guidance range. We have an increasingly well understood field which continues to perform in line with expectations, a healthy balance sheet, and stand ready to further invest in the Shaikan Field.
“However, commercial and contractual clarity around payments and marketing remain key to achieving production growth and realising full value potential.”
(Sources: GKP, Yahoo!)