By John Lee.
Gulf Keystone Petroleum (GKP) has given an update on its production operations at Shaikan in Iraqi Kurdistan, its key producing asset. The company's shares closed up 1.9 percent on Friday.
- Development plans to increase Shaikan production capacity to 40,000 gross barrels of oil per day ("bopd") by year-end 2014 are on track
- Shaikan PF-1 production continues at stable rates of 16,000 gross bopd from three wells, Shaikan-1, -3 and -4 and will increase to 20,000 gross bopd later in 2014
- Shaikan PF-2 has been fully commissioned and production operations commenced from two wells, Shaikan-5 and -2
- Shaikan-5 is producing at an average rate of 5,000 gross bopd, having achieved maximum daily rate to date of over 8,000 gross bopd
- Shaikan-2 is expected to contribute additional production in the near future, having already achieved maximum daily rate to date of nearly 3,000 gross bopd
- To boost production rates and provide spare well capacity, further wells will come online in 2014, including Shaikan-7, -8 and -10, and a work-over of Shaikan-1 and -3 will be carried out
- Two additional production wells, Shaikan-9 and -11 are planned to be drilled later in 2014
- Trucking operations from PF-1 continue and PF-2 production is being processed and flowed into two storage tanks at the facility with trucking operations from PF-2 anticipated to commence by the end of June
- The majority of Shaikan production is being trucked to the Turkish port of Dortyol and sold to the international market, while some sales into the domestic market continue
- Eight cargoes totalling approximately 1.85 million gross barrels of Shaikan crude have been sold to the international market to date
- In June to date, the Company received its second and third payments of US$6.85 million and US$6.88 million respectively for the Shaikan crude oil export sales, as well as a further payment of US$1.5 million for the domestic sales
Todd Kozel (pictured), Gulf Keystone's Chief Executive Officer commented:
"Our operations in the Kurdistan Region of Iraq are progressing in line with our previous guidance, whilst we remain alert to the current security situation in Iraq, which has recently escalated outside the Kurdistan Region.
"We projected that Gulf Keystone would reach 20,000 gross bopd of production by the end of Q2 2014 and, with the combined production from PF-1 and PF-2, we are now very much on schedule. On 4 June, Shaikan cumulative production reached our record maximum daily rate to date of 25,000 gross bopd. We look forward to exiting 2014 with 40,000 gross bopd of production.
"Our crude oil export sales have now surpassed our historic sales into the domestic market, and our revenues are expected to increase significantly in the second half of 2014 with the establishment of a steady payment cycle for the Shaikan exports sales."