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RNS Number : 4386Q
Gulf Keystone Petroleum Ltd.
19 June 2020
19 June 2020
Gulf Keystone Petroleum Ltd. (LSE: GKP)
("Gulf Keystone", "GKP" or "the Company")
Operational and Corporate Update
Gulf Keystone Petroleum, a leading independent operator and
producer in the Kurdistan Region of Iraq ("Kurdistan" or "Kurdistan
Region"), is providing an operational and corporate update in
advance of today's Annual General Meeting.
Jón Ferrier, Gulf Keystone's Chief Executive Officer, said:
"In response to the unprecedented COVID-19 pandemic and
macroeconomic conditions, we took decisive actions to preserve
liquidity and safeguard the long-term health of the business. We
are now well placed to weather the current environment and are able
to move quickly back to growth at the right time. Our cost
reduction initiatives have been thorough, and I am grateful to our
staff and contractors for their commitment and support. Whilst
uncertainty around the timing of the end of the crisis persists,
the partial oil price recovery gives us some grounds for optimism
about the future and our return to delivering the significant
untapped value in Shaikan."
Operational
Ø Maintaining strong focus on safety with zero LTIs recorded in
2020.
Ø In order to protect all personnel, the Company continues to
actively manage its working practices in light of the COVID-19
pandemic observing all of the appropriate protection measures.
Ø Despite the challenges presented by COVID-19, production
operations continue at c.36,000 bopd (gross). Average gross
production for the year to date is 37,232 bopd.
Ø DQE's Rig 40 has been stacked on site at zero cost, which will
aid the timely resumption of drilling activities, when
appropriate.
Ø During this period of reduced activity, the Company continues
to optimise its plans for a quick and effective restart of the
55,000 bopd expansion project.
Financial
Ø As a result of a continued rationalisation of the
organisation, expenditures, and contract renegotiations, the
Company remains on track to achieve its previously announced target
of Opex and G&A savings in excess of 20% in 2020 compared to
2019. On a run-rate basis, we are targeting to achieve savings of
c.30%.
o The Company is introducing 2020 guidance for Opex of $2.7 to
$3.1 per barrel (vs $3.9 per barrel in 2019).
o The workforce is in the process of being reduced by c.40%,
including over 60% of expatriates, due to the reduction in the work
programme.
Ø Capex for 2020 remains in the range $40 - $48 million (net), a
50% reduction compared to 2019, of which $30 million (net) had been
spent by the end of April 2020.
Ø Cash balance of $144 million as at 17 June 2020.
Ø Payments by the Kurdistan Regional Government to GKP are in
line with the peer group, with invoices from March 2020 onwards
being settled the following month. There is an ongoing dialogue
relating to the payment of invoices for November 2019 to February
2020, aggregating $73 million (net).
Corporate
Ø Garrett Soden is to be welcomed back to the Board of GKP as a
Non-Independent Non-Executive Director representing funds managed
by Lansdowne Partners Austria.
Ø Mr Soden will be formally appointed following completion of
the appointment process and will bring valuable financial and
industry experience. Mr Soden was a Non-Executive Director between
2016 and 2019 and he has undertaken to conform to UK corporate
governance standards in respect of external appointments.
Outlook
Ø With the Company's ongoing prudent approach to managing its
financial position and the decisive measures taken to reduce its
cost structure to preserve liquidity, GKP remains financially
resilient to manage through the current macro environment.
Ø Despite a partial recovery in oil price, the Company closely
monitors market dynamics and will continue to take the appropriate
actions to preserve value in Shaikan.
Ø GKP looks forward to resuming investment and shareholder
distributions when conditions allow.
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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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