Operational and Corporate Update

RNS Number : 4624C

Gulf Keystone Petroleum Ltd.

22 January 2018

 

22 January 2018                                        

Gulf Keystone Petroleum Ltd. (LSE: GKP)

("Gulf Keystone", "GKP" or "the Company")

Operational & Corporate Update

Notification of Full Year Results

Gulf Keystone, operator of the Shaikan Field in the Kurdistan Region of Iraq ("Kurdistan"), is today providing an operational and corporate update. This is in advance of the Company's full year results for the period ended 31 December 2017 which are expected to be announced on Wednesday 11 April 2018. The information contained herein has not been audited and may be subject to further review and amendment. 

Operational Update

·      GKP has continued its strong safety performance in 2017 and into 2018 with no lost-time incidents at the Shaikan field. Operations in the area remain secure.

·      Plant uptime of 99% in 2017 helped contribute to an average gross production of 35,298 barrels of oil per day ("bopd"), in the middle of our guidance range of 32,000-38,000 bopd for the year.

·      Since 15 November 2017, the Kurdistan Regional Government's ("KRG") Ministry of Natural Resources ("MNR") has resumed exporting the Shaikan crude via the export pipeline to Turkey. The Company sees the latest export development as confirmation of the suitability of the Shaikan crude within the Kurdish blend.

·      The Company was encouraged by the signature of the crude oil sales agreement announced on 16 January 2018. The Company is also in dialogue with the MNR on the terms of a potential 2^nd PSC Amendment.

·      Subject to resolution of the commercial matters and the KRG continuing regular payment of monthly invoices, the Company currently intends on investing this year in wells and facilities to expand production capacity to 55,000 bopd.

·      Part of these investments would include the hook-up of a short (400m) spur pipeline from Production Facility 2 to the Atrush export line, which links to the main export oil line to Turkey.  This will reduce trucking requirements, HSE risk and improve netbacks.

·      Final investment plans for 2018 are under review and will be provided to the market in due course.

Corporate Update

·      Gross production guidance for 2018 is being set at 27,000-32,000 bopd. The lower range compared to 2017 is due to the need to install downhole pumps in some wells, which are part of the investment programme delayed into 2018.

·      Chairman Keith Lough has informed the board of his intention to step down.  Keith joined GKP as a non-executive Director in October 2015 and assumed the role of Chairman in July 2016.  Keith successfully steered the Company through its financial restructuring in 2016 and oversaw the strengthening of GKP's balance sheet and continued improvement of GKP's corporate governance.  He leaves the Company ahead of a new phase of its development where the focus is on operations and investment.  The Company thanks Keith for his wise counsel and commitment to the business.  A search is underway for Keith's successor as Independent Chairman and the Board will ensure a smooth and orderly transition.

·      The Company confirms that, after two and a half years' service, Nadhim Zahawi, the Chief Strategy Officer, left the Company in December 2017. The Company thanks Nadhim for his valuable contribution.

·      Cash position of $157 million as at 19 January 2018.

Commenting, Jón Ferrier, CEO, said:

"Following a further year of strong operational delivery where production guidance has been met, the Company is now focused on achieving the commercial framework to significantly increase investment in Kurdistan to step up gross production to 55,000 bopd in the near to medium term, a material step towards development of the full potential of the field and production around ca.100,000 bopd.

We are very pleased with the progress made to date on the commercial and operational matters to implement this and look forward to concluding commercial matters in the near future.  On behalf of all the Company we wish Keith Lough well and thank him for his valued and constructive contribution to the Company and the Board.  We will update the market in due course on our progress throughout 2018."

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

Enquiries:

Gulf Keystone Petroleum:	[phone]
Jón Ferrier, CEO
Sami Zouari, CFO
Celicourt Communications:	[phone]
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 and the operator of the Shaikan field with current production capacity of 40,000 barrels of oil per day

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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