Shaikan Production and Sales Update

RNS Number : 0929T

Gulf Keystone Petroleum Ltd.

01 October 2014

 



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.

1 October 2014

Gulf Keystone Petroleum Ltd. (LSE: GKP)

Shaikan Production and Sales Update

Gulf Keystone Petroleum Limited, an exploration and production company with operations in the Kurdistan Region of Iraq, today provides an update on the Company's operations at Shaikan, its key producing asset.  

The Company remains focused on achieving the target of 40,000 barrels of oil per day ("bopd") of production capacity from the Shaikan production facilities ("PF-1" and "PF-2") in line with our Half Year Report schedule published on 28 August 2014. The Company's staffing levels in the Kurdistan Region, including all key international contractors, returned to normal in the first half of September.

In the period since 28 August 2014, Shaikan PF-1 and PF-2 production has been achieving stable rates of approximately 23,000 gross bopd from three wells at PF-1 and two wells at PF-2. The work on the flowlines to connect additional production wells, Shaikan-7, -8 and -10 later in 2014 is on-going.

Trucking operations from PF-1 and PF-2 continue with approximately 70% of the current production trucked as export crude oil to the Turkish port of Dortyol and sold to the international market by Powertrans, an authorised transportation and marketing agent of the Kurdistan Regional Government's Ministry of Natural Resources ("KRG" and "MNR"). Seventeen cargoes totalling approximately 4.0 million gross barrels of Shaikan crude oil have been sold to the international market since the Shaikan crude oil export sales began from Dortyol in January 2014.

As previously announced, constructive discussions surrounding a payment cycle for past and future Shaikan export crude oil sales are progressing with the MNR, while the Company is awaiting further payments for export sales.

Approximately 30% of the current Shaikan production is being sold to domestic buyers in the Kurdistan Region. Since the publication of the Half Year Report, the domestic market has been providing steady revenue with approximately 220,000 barrels gross sold since 28 August 2014 generating US$9.4 million in gross revenues. The cash receipts associated with these sales as at 30 September were US$5.9 million.

The Company's Q3 2014 Interim Management Statement will be published on 30 October 2014.

John Gerstenlauer, Gulf Keystone's Chief Executive Officer commented: 

"Receiving steady revenues from our domestic sales is positive as we continue our constructive discussions regarding a stable payment cycle for past and future export sales. With all personnel now back in country, we are making good progress and look forward to reaching our target of 40,000 gross barrels of oil per day. We continue to manage our expenditure in a prudent manner in order to maximise production, whilst actively pursuing options regarding the Company's 20% working interest in the Akri-Bijeel Block."

Enquiries:

Gulf Keystone Petroleum:	[phone]
John Gerstenlauer, Chief Executive Officer
Anastasia Vvedenskaya, Head of Investor Relations
Bell Pottinger	[phone]
Mark Antelme / Henry Lerwill

or visit: www.gulfkeystone.com 

Notes to Editors:

·           Gulf Keystone Petroleum Ltd. (LSE: GKP) is an independent oil and gas exploration, development and production company focused on exploration 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.  Texas Keystone Inc. holds its interest in trust for Gulf Keystone, pending transfer of its interest to the Company.

·           Gulf Keystone is moving into the large-scale phased development of the Shaikan field targeting 100,000 bopd of production capacity during Phase 1 of the Shaikan Field Development Plan following its approval in June 2013.

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.

This communication and the information contained herein is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States unless they are registered or are exempt from registration. Any public offering of securities to be made in the United States would be made by means of a prospectus that would contain detailed information about the company and its management, as well as financial statements. The company does not intend to register any portion of this offering in the United States or to conduct a public offering in the United States or any other jurisdiction. Any public offering of securities to be made in the United States would be made by means of a prospectus that would contain detailed information about the Company and its management, as well as financial statements. Copies of this communication are not being, and should not be, distributed in or sent into the United States.

 

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