Tag Archive | "Gulf Keystone"

The latest Gulf Keystone Business News – Kurdistan, oil finds / discoveries, Sheikh Adi near Erbil, Shaikan, share price rise – brought to you by Iraq Business News

Gulf Keystone KRG Operations Update


By John Lee.

Gulf Keystone (pictured: CEO John Gerstenlauer) an independent oil and gas exploration, development and production company with operations in the Kurdistan Region of Iraq (“Kurdistan Region”), today announces its results for the six months ended 30 June 2014.

Operational highlights

·           Gulf Keystone’s operations in the Kurdistan Region remain secure and production and crude oil sales from the Shaikan field have not been interrupted in any material way

·           Ramp-up of Shaikan production in H1 2014 from 10,000 gross barrels of oil per day (“bopd”) to rates of in excess of 20,000 gross bopd through the tie-in of an additional producing well to Shaikan PF-1 and the commencement of production operations from Shaikan PF-2

·           Crude oil export deliveries by truck to Turkey in H1 2014 totalled 2.2 million barrels gross with total gross production from Shaikan to date fast approaching 5.5 million barrels

·           Initial payments for the export crude oil sales received with the realised price at the Shaikan facility estimated as US$51-56/bbl. Through an ongoing dialogue with the Ministry of Natural Resources of the Kurdistan Regional Government (“MNR” and “KRG”), the Company is seeking to establish a regular  payment cycle for past and future Shaikan crude oil export sales

·           Gross domestic sales for H1 2014 of 0.1 million barrels with a realised price of US$42/bbl

·           Agreement of the Field Development Plan (“FDP”) for the Akri-Bijeel Block by the MNR in August with production from the Bijell and Bakrman discovery areas expected by MOL Kalegran Limited, the operator, to reach 35,000 gross bopd in 2015

Financial highlights

·      Revenues of US$18.7 million achieved for H1 2014 (1H13: $nil; FY13: $6.7 million); additional revenue in the region of US$35 million owed but not yet recognised for H1 2014 crude oil export sales

·      Loss after tax for H1 2014 of $29.8 million (1H13: $26.4 million; FY13: $32.0 million)

·      Net proceeds of US$240 million raised from the issue of debt securities and associated warrants in April 2014

·      Cash and cash equivalents at 26 August 2014 of US$177 million

Outlook

·           Company continues to target 40,000 bopd of Shaikan production by year end through the tie-in of three additional producing wells (Shaikan-7, -8 and -10), although certain consequences of the recent security situation, including the current short term limited availability of some international contractors, may cause this to move to Q1 2015

·           Conclude discussions with the MNR on the establishment of a regular and predictable payment cycle for past and future Shaikan crude oil export sales in order to generate steady revenues, which is of critical importance to Gulf Keystone’s funding position

·           Manage expenditure in a responsible and prudent manner, continuing to review and control capital commitments. Once a steady flow of revenues has been established, make decisions on investment in additional production facilities, development wells and infrastructure in order to increase Shaikan production in line with the approved  Shaikan Field Development Plan

·          Continue to review options regarding the Company’s 20% working interest in the Akri-Bijeel Block and explore other funding options available

·          Complete the appraisal of the Sheikh Adi discovery, submit the appraisal report and make a decision regarding early production and development

Simon Murray, Non-Executive Chairman of Gulf Keystone, said:

Despite the recent security crisis in Iraq, which clearly affected the lives of many people in the Kurdistan Region and refugees from elsewhere in Iraq, I strongly believe that Gulf Keystone’s footprint as one of the key oil producers in this strategically important area is assured. With the continued support of the Ministry of Natural Resources, we are positive about increasing our production to the stated goal of 40,000 bopd, receiving payment for all entitlement barrels produced to date and entering a new phase of value generation.”

John Gerstenlauer, Chief Executive Officer of Gulf Keystone, commented:

“Our operations in the Kurdistan Region, where we have been present since 2007, are progressing well with the two existing Shaikan production facilities producing in the range of 20,000 to 25,000 bopd and crude oil export deliveries continuing essentially uninterrupted since late November 2013 to date. We are currently discussing with our hosts and stakeholders in the Kurdistan Region the plan for monetizing all past and future Shaikan production through achieving a stable payment cycle to progress in line with the approved Shaikan Field Development Plan.”

Posted in Oil & GasComments (0)

Gulf Keystone CEO and Directors Resign


By John Lee.

Gulf Keystone Petroleum announced this morning that Non-Executive Director and Deputy Chairman Jeremy Asher and Non-Executive Director John Bell “have ceased to be Directors in accordance with the Company’s bye-laws”.

The Company will restart its previously announced search process, with the assistance of Odgers Berndtson, for two new independent non-executive directors, and a further announcement on that process will be made in due course.

The Company also announced that Todd Kozel (pictured) will retire from his current role of CEO at the Company’s upcoming Annual General Meeting on 17 July 2014 and that, subject to Mr. Kozel’s re-election to the Board of Directors by shareholders, he will take up a new role of Executive Director. A search for Mr Kozel’s replacement is underway with the assistance of an international executive search firm and potential candidates have been identified.

Hours later, the company said that Non-Executive Director Thomas Shull had resigned from the Board.

Simon Murray, Gulf Keystone’s Non-Executive Chairman commented:

The Company is strongly positioned to continue the successful development of our assets in close cooperation with our partners MOL and the Kurdistan Regional Government.

“We have already begun the process of bringing in additional top-quality talent at both the Executive and Non-Executive level to help take the Company through the next stage of its development.

Shares in the company closed down 2 percent on Wednesday.

(Sources: GKP, Yahoo!)

Posted in Oil & GasComments (0)

GKP Falls on Payment Delays


By John Lee.

Shares in Gulf Keystone Petroleum (GKP) closed 7 percent lower on Wednesday after the company warned of delays in receiving payments for exports.

The full text of the interim management statement for the period from 1 January 2014 to today is shown below:

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.

Posted in Oil & GasComments (0)

GKP Arranges $250m Debt Financing


By John Lee.

Gulf Keystone Petroleum (GKP) announced today that it has priced a debt offering of US$250 million.

The privately placed debt securities, offered in accordance with Reg S/144A to institutional investors in Europe, the US and Asia, consists of three-year senior unsecured notes carrying a coupon of 13% per annum and freely tradeable and detachable warrants relating to 40 million common shares in the Company.

Key terms of the notes and warrants can be viewed here.

(Source: GKP)

(Bonds image via Shutterstock)

Posted in Investment, Oil & GasComments (0)

GKP Investors Relax


By John Lee.

The Telegraph reports that an encouraging update on its fund-raising plans provided some much needed cheer for Gulf Keystone Petroleum (GKP) on the stock market. The Kurdistan-focused oil producer had slumped in recent weeks, amid speculation that the company’s key bond sale was running into trouble.

The company announced last month that it was meeting fixed income investors with a view to raising as much as $250 million from a bond sale to help it boost production at the Shaikan field.

However, the group caused alarm and its shares dropped sharply when it revealed a day later that, without the fund-raising, it was at risk of running out of cash by the end of next month.

Rumours that the international roadshow for the debt offering had encountered difficulties, as well as pressure from short-sellers, served to drag the shares even lower in the days that followed.

There was relief, then, when the company revealed late on Friday that the roadshow had finished and that the group would go-ahead with a private placement, which would include the sale of warrants linked to as many as 40m shares. As a result, GKP gained 8.2 percent on Monday, before giving up some of that gain on Tuesday.

(Source: Telegraph, Yahoo!)

Posted in Investment, Oil & GasComments (0)

Gulf Keystone to Raise $250m Debt


Gulf Keystone has announced that it has mandated Deutsche Bank and Pareto Securities to arrange a series of fixed income investor meetings in the US, Europe and Asia commencing 20 March 2014. A debt offering of up to US$250 million in accordance with Reg S/144A is expected to follow, subject to market conditions.

On 13 March 2014, Gulf Keystone released an Operational and Corporate Update and published the first third party audit of the Company’s reserves, contingent resources and prospective resources for its petroleum interests in the Kurdistan Region of Iraq comprising the Shaikan, Sheikh Adi, Ber Bahr and Akri-Bijeel blocks.

The Company continues to maintain current stable production and sales levels at an average of 10,000 barrels of oil per day (“bopd”) from the Company’s first Shaikan production facility (PF-1). In addition, Shaikan-4, the third production well, recently tied-in to PF-1, has been flowing at up to 6,000 bopd in the recent week.

The Company’s immediate focus remains on achieving its target of 40,000 bopd of production capacity from PF-1 and PF-2 in 2014, which will allow further expansion of export crude oil sales. The Company estimates that achieving this level of production capacity at Shaikan, as well as continuing planned expenditure at Sheikh Adi, Ber Bahr and Akri-Bijeel, will require capital expenditure of approximately US$210 million in 2014.

To complete this work programme, the Company expects to seek additional funding via a debt offering of up to US$250 million to enhance its existing cash resources, which totalled US$81.9 million as at 31 January 2014. Whilst there can be no certainty that a debt transaction will follow the Company’s investor meetings, any debt raised will support the completion of the Company’s move to 40,000 bopd of production capacity.

The Company expects to utilise cash generated from increasing oil sales, in addition to the funds remaining from the contemplated raising of up to US$250 million in debt financing, to initiate the next stage of the Shaikan project execution and increase production capacity from 40,000 bopd to 66,000 bopd by Q1 2016.

Posted in Banking & Finance, Oil & GasComments (2)

Gulf Keystone Update


Gulf Keystone Petroleum (GKP) has this morning provided an Operational and Corporate update, and released a third party audit of the Company’s reserves, contingent resources and prospective resources for its petroleum interests in the Kurdistan Region of Iraq.

Summary

The Company continues to maintain current stable production and sales levels of approximately 10,000 barrels of oil per day (“bopd”) from the Company’s first Shaikan production facility (“PF-1″) in the Kurdistan Region of Iraq, which is expected to increase in Q2 2014 as a result of the recently tied-in third production well, Shaikan-4, which is now flowing.

The second Shaikan production facility (“PF-2″) is being commissioned, with two wells (Shaikan-2 and Shaikan-5) already tied in and the first production from PF-2 expected in Q2 2014. The Company remains focused on achieving the target of 40,000 bopd of production capacity from PF-1 and PF-2 in 2014.

Since crude oil exports from the Shaikan field commenced in December 2013, in excess of 105,000 tonnes (690,000 barrels) of oil have been tendered and sold at international prices. The Company is expecting to receive payment, in line with the terms of the Shaikan Production Sharing Contract.

In order to move to the next stage of the Shaikan project execution, the Company is making progress in its discussions on the near term debt financing options.

Production and Development

Shaikan (75% working interest; Operator)

Stable production operations and sales from PF-1 continued in January, February and March 2014 at the level of approximately 10,000 bopd (gross). Total cumulative production from late 2010 to date from Shaikan has reached 2.1 million barrels.

Since crude oil exports from the Shaikan field commenced in December 2013, three cargoes totalling in excess of 105,000 tonnes (690,000 barrels) of oil have been delivered from PF-1. The fourth cargo of approximately 33,000 tonnes (215,000 barrels) of Shaikan crude is expected to be delivered later in March 2014.

Posted in Oil & GasComments (0)

GKP Shares Up Following Update


By John Lee.

Shares in Gulf Keystone Petroleum (GKP) were up 4 percent this morning after the company provided an operational and corporate update:

Significant progress has been made since the Field Development Plan (“FDP”) for the Shaikan field was approved in June 2013. In July 2013 the Company commenced commercial production, marking Gulf Keystone’s transition to an operator with revenue generation. In December 2013 crude oil exports from the Shaikan field commenced.

Shaikan (75% working interest; Operator)

Shaikan Production Update

Gulf Keystone is pleased to announce the commencement of crude oil exports from the Shaikan field.

In line with the Company’s marketing strategy, which is being developed in co-operation with the Ministry of Natural Resources of the Kurdistan Regional Government, the first tendered cargo of between 30,000 tonnes (198,300 barrels) and 33,000 tonnes (215,000 barrels) of Shaikan crude was trucked to Turkey in December and will be loading at the port of Dortyol this month.

A second tender is underway for two further cargoes of similar size of Shaikan crude, which are expected to be loaded later this month and during February. Sales realisations are expected to be in accordance with the terms of the Production Sharing Contract for the Shaikan Block (“Shaikan PSC”) and will reflect transportation and quality adjustments.

The first Shaikan production facility (“PF-1″) is in operation with two wells currently tied to the facility, namely Shaikan-1 and -3. The flowlines from Shaikan-4 to PF-1 are now complete and the well has been worked over as a Jurassic Sargelu producer prior to being tied to PF-1 in early 2014.

Work at the second Shaikan production facility (“PF-2″) is nearing completion with electrical and instrumentation work ongoing. The Shaikan-2, -5, and -10 wells have been completed as Jurassic Sargelu producers and the flowlines from these wells to PF-2 are currently being laid.

Current average oil sales from PF-1 stand at between 9,000 and 10,000 barrels per day of export quality crude. The Company will provide an update on well performance and combined production capacity of PF-1 and PF-2 as the additional four wells become operational.

Posted in Oil & GasComments (3)

IBN Newsletter 'FREE Weekly Subscription'