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:
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.