GKP Shares Rally

Shares in Gulf Keystone Petroleum (GKP) were trading up 12 percent on Thursday following the announcement of its results for the six months ended 30 June 2015.

Operational highlights

Security situation and HSE performance

  • All operations in the Kurdistan Region of Iraq remain safe and secure with no significant HSE incidents during the period

Shaikan (75% working interest; Operator)


  • Strong production performance resulted in gross production of 4.7 million barrels in the period to 30 June 2015, an increase of 102% on H1 2014
  • A new daily production record of 45,000 barrels of oil per day (bopd) was established on 16 August 2015 with the current average daily production in excess of 40,000 bopd
  • Plant availability at the Shaikan production facilities (PF-1 and PF-2) for 2015 to mid-August has averaged 98.2%, which should allow the Company to achieve its previously announced daily production average target of 30,000-34,000 bopd for Full-Year ("FY") 2015 and 36,000-40,000 bopd for H2 2015, subject to offtake, which continues to be variable

Sales and payments

  • In line with the announced diversified marketing strategy aimed at achieving more flexibility, Shaikan production is currently being delivered to export markets through two principal routes.  Approximately 20,000 bopd is delivered to the Turkish coast by truck and 20,000 bopd is delivered into the export pipeline
  • Under a direct six month contract with a domestic off-taker established in mid-May 2015, the Shaikan crude oil delivered by truck to the Turkish coast has to date resulted in total cash receipts of US$19.3 million gross (US$15.4 million net to Gulf Keystone)
  • In July 2015, at the request of the Kurdistan Regional Government's ("KRG") Ministry of Natural Resources ("MNR"), the Company commenced trucking Shaikan crude oil a distance of 120 km to Fyshkhabour on the Turkish border for injection into the export pipeline to Ceyhan in Turkey
  • Further to the KRG statement on 3 August 2015 regarding expected regular payments from September 2015 for oil exports to the exporting international oil companies, Gulf Keystone anticipates regular payments for pipeline export sales to complement revenues from domestic offtake
  • Export deliveries against the pre-payment of US$26 million gross (US$20.8 million net to Gulf Keystone) received for Shaikan crude oil sales in February, were completed in May 2015

Sheikh Adi (80% working interest; Operator)

  • Appraisal report for the Sheikh Adi commercial discovery has been completed and work has commenced on a Field Development Plan

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