TIDMGKP
RNS Number : 6219I
Gulf Keystone Petroleum Ltd.
15 December 2020
15 December 2020
Gulf Keystone Petroleum Ltd. (LSE: GKP)
("Gulf Keystone", "GKP" or "the Company")
Operational & Corporate Update
Shaikan production currently c.42,000 bopd
80 MMstb cumulative production achieved
Gulf Keystone Petroleum, a leading independent operator and
producer in the Kurdistan Region of Iraq, today provides an
operational and corporate update.
Jón Ferrier, Gulf Keystone's Chief Executive Officer, said:
"We have made significant operational strides in recent months,
ensuring we remain on-track to achieve our revised targets for the
year. I am pleased to update stakeholders on further success in
executing the previously reported, low-cost, high-impact
investments that have so far increased gross production to 42,000
bopd, in excess of the initially targeted increase of 5,000
bopd.
The Shaikan Field recently achieved an important milestone of
cumulative production of 80 million stock tank barrels. This is a
clear testament to not only the quality of the asset, from which
there remains significant untapped potential, but also the
professionalism and dedication of the team. We look forward to
updating the market on further progress early in 2021."
Operational
-- Following on from the successful work over of the SH-12 well,
the Company has progressed the previously announced low-cost,
high-impact investments to further increase field production.
-- The SH-9 well, on which activity was suspended in March 2020
due to COVID-19, has now been successfully tied-in to PF-1 and is
on production. PF-1 is now operating at its current maximum
processing capacity of c.27,500 bopd. Debottlenecking activities at
PF-1 remain on-track to further increase production capacity to
over 30,000 bopd during Q1 2021.
-- Gross Shaikan production is currently at c.42,000 bopd, c.20%
above the November 2020 average rate.
-- Average gross production for the year is expected to be at,
or slightly above, 36,000 bopd, the top end of the guidance
range.
Financial
-- The Company remains on track to achieve targeted G&A and
Opex savings of at least 20% compared to 2019 and 30% on a run-rate
basis.
-- Net capex for 2020 is expected to be at or slightly exceed
the top end of the guidance range of $48 million, following the $3
million investment in high-impact projects.
-- The Kurdistan Regional Government ("KRG") has maintained
regular payments for eight months, including the recent October
receipt.
-- The Company has extended its hedging programme, establishing
a H1 2021 floor price of $35/bbl on c.60% of production, based on
current production levels.
-- As at 14 December 2020, the Company had a cash balance of $142 million.
Outlook
-- With completion of the debottlenecking of PF-1, GKP is
expected to deliver a further increase in production in Q1
2021.
-- In line with the KRG's commitment to review the outstanding
November 2019 to February 2020 invoices totalling $73.3m (net) when
oil prices reached $50/bbl, we are pleased to confirm receipt of a
proposal to repay the arrears. We look forward to further engaging
with the KRG on this matter and will provide an update in due
course.
-- GKP is well positioned to restart its drilling programme to
achieve 55,000 bopd when circumstances permit.
-- The Company remains committed to maintaining its strong
financial position and aims to return to a balance of production
growth and shareholder distributions, as conditions continue to
improve.
-- The search process to identify a successor for CEO, Jón Ferrier, is ongoing.
AGM Update
In accordance with the 2018 UK Corporate Governance Code, the
Company can confirm that following the Annual General Meeting held
on 19 June 2020, where three of the proposed Resolutions did not
attain the support of 80% of the votes, members of the Board and
executive management team have consulted with several of the
Company's large shareholders. Mr Garrett Soden has been reappointed
to the Board of GKP as a Non-Independent Non-Executive Director
representing funds managed by Lansdowne Partners Austria, GKP's
largest shareholder. The Company continues to actively engage with
its shareholders.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
Enquiries:
Celicourt Communications: + 44(0) 20 8434 2754
Mark Antelme
Jimmy Lea
or visit: www.gulfkeystone.com
Notes to Editors:
Gulf Keystone Petroleum Ltd. (LSE: GKP) is a leading independent
operator and producer in the Kurdistan Region of Iraq. Further
information on Gulf Keystone is available on its website
www.gulfkeystone.com
Disclaimer
This announcement contains certain forward-looking statements
that are subject to the risks and uncertainties associated with the
oil & gas exploration and production business. These statements
are made by the Company and its Directors in good faith based on
the information available to them up to the time of their approval
of this announcement but such statements should be treated with
caution due to inherent risks and uncertainties, including both
economic and business factors and/or factors beyond the Company's
control or within the Company's control where, for example, the
Company decides on a change of plan or strategy. This announcement
has been prepared solely to provide additional information to
shareholders to assess the Group's strategies and the potential for
those strategies to succeed. This announcement should not be relied
on by any other party or for any other purpose.
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END
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