Shaikan Payment Update

RNS Number : 7423H

Gulf Keystone Petroleum Ltd.

02 December 2015

 



Not for release, publication or distribution, directly or indirectly, in whole or in part in or into the United States or any jurisdiction other than the United Kingdom and Bermuda where to do so would constitute a contravention of the relevant laws or regulations of such jurisdiction.  This announcement (and the information contained herein) does not contain or constitute an offer to sell or the solicitation of an offer to purchase, nor shall there be any sale of securities in any jurisdiction where such offer, solicitation or sale would constitute a contravention of the relevant laws or regulations of such jurisdiction.

2 December 2015

Gulf Keystone Petroleum Ltd. (LSE: GKP)

("Gulf Keystone" or "the Company")

Shaikan Payment Update

Gulf Keystone Petroleum, a leading independent operator and producer in the Kurdistan Region of Iraq, is pleased to confirm that, further to the recent statement by the Kurdistan Regional Government ("KRG") regarding the November payment to the exporting international oil companies ("IOCs") in the region, a gross payment of US$15 million (US$12 million net to Gulf Keystone) has been received by the Company.

This payment satisfies the Company's invoice for the month of November 2015 which, at the request of the KRG's Ministry of Natural Resources, was submitted on 19 November 2015. Following the payment, the Company's current cash position will be US$54.6 million.

Since December 2014, when the first payment to the exporting IOCs in the region was authorised by the KRG, the Company has received payments, totalling US$86 million gross for Shaikan crude oil export sales, including three consecutive payments for September, October and November. These payments allowed the Company to meet its debt payment obligations in April and October.

In line with a number of public statements made by the KRG this year, Gulf Keystone expects that these payments will continue in a regular manner and also that all amounts owed in arrears, which as of 30 September 2015, and subject to audit, totalled US$298.4 million net to the Company, will be considered for payment in 2016.

The previously announced full year production guidance for the Shaikan field of 30,000-34,000 barrels of oil per day remains unchanged, while the Company continues to exercise a prudent approach to all expenditure, cutting the costs across the organisation.

Commenting on today's announcement, Jón Ferrier, CEO, said:

"We continue to drive the Company forward with three principal strategic objectives: safe and reliable operations, commercial sustainability of the business achieved through regular monthly payments and addressing of the arrears, and constructive relationships with our host government, shareholders and bondholders. We have made substantial progress on a number of fronts during 2015, including the 114% increase in the Company's 2P reserves, and maintained stable production levels throughout the year."

Enquiries:

Gulf Keystone Petroleum:	[phone]
Jón Ferrier, CEO
Sami Zouari, CFO
Anastasia Vvedenskaya, Head of Investor Relations	[phone]
Celicourt Communications:	[phone]
Mark Antelme Jimmy Lea

or visit: www.gulfkeystone.com

Notes to Editors:

·           Gulf Keystone Petroleum Ltd. (LSE: GKP) is an independent oil and gas exploration and production company with operations in the Kurdistan Region of Iraq.

·           Gulf Keystone Petroleum International (GKPI) holds Production Sharing Contracts for four exploration blocks in Kurdistan, the Shaikan, Sheikh Adi, Ber Bahr and Akri-Bijeel blocks.

·           GKPI is the operator of the Shaikan block, which is a major commercial discovery, with a working interest of 75% and is partnered with MOL Kalegran Limited (a 100% subsidiary of MOL Hungarian Oil and Gas plc.) and Texas Keystone Inc., which have working interests of 20% and 5% respectively. 

·           Following the establishment of a regular payment cycle for all oil sales and arrears, Gulf Keystone plans to move into the large-scale phased development of the Shaikan field targeting 110,000 bopd of production capacity during Phase 1 of the Shaikan Field Development Plan.

Disclaimer

This announcement contains certain forward-looking statements.  These statements are made by the Company's 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 uncertainties, including both economic and business factors, underlying such forward-looking information.  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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