Gulf Keystone Petroleum (GKP) has announced its audited results for the full year ended 31 December 2020.
Jon Harris, Gulf Keystone's Chief Executive Officer, said:
"Against the backdrop of extraordinary global challenges in 2020, GKP acted decisively to successfully manage the impact of COVID-19 on our staff, contractors and production operations. We achieved all of our cost reduction targets and annual average production of 36,625 bopd, 11% higher than 2019.
"We have had a strong start to 2021. The updated independent Competent Person 's Report reaffirmed the significant upside production potential of the field with gross 2P reserves + 2C contingent resources of c.800 MMstb. Average gross production from Shaikan in 2021 to 29 March is 43,190 bopd, up c. 13% from the corresponding period in 2020.
"Recently, we resumed the 55,000 bopd investment programme and today we are pleased to be announcing the reinstatement of at least a $25 million annual dividend, in keeping with our commitment to balance investment in growth and returns to shareholders."
Highlights to 31 December 2020 and post reporting period
- Effectively managing the impact of COVID-19 on production operations and continue to prioritise the welfare of workforce and contractors whilst maintaining production momentum.
- Continued strong safety performance, with no Lost Time Incident ("LTI") recorded for over 450 days.
- 2020 a verage gross production of 36,625 bopd, exceeding revised guidance and the highest annual average production rate to date from the field.
- Gross average production from the field in 2021 to date of 43,190 bopd, in line with guidance of 40,000 - 44,000 bopd for the year.
- Updated Competent Person's Report ("CPR") published with c.800 MMstb gross 2P+2C reserves and resources volumes, which was in line with the 2016 CPR, after adjusting for production over the period, supporting GKP's view of the geological model.
- GKP achieved its 2020 cost reduction targets, reducing Opex and G&A by more than 20% compared to 2019 and delivering gross unit Opex of $2.6/bbl, below the low end of the guidance range and down over 30% versus 2019.
- Net Capex was $45.9 million net (FY 2019: $90 .0 million) within the $40-48 million revised guidance range despite the addition of low-cost, high impact investments during the fourth quarter that contributed to record 2020 annual average production.
- Loss after tax of $47.3 million (FY 2019: $43.5 million profit) and reduced revenue of $108.4 million (FY 2019: $206.7 million) were driven by a decline in Brent oil prices that averaged $42/bbl in 2020 compared to $64/bbl in 2019.
- Consistent payments from the Kurdistan Regional Government ("KRG") for the last eleven months. Repayment mechanism in place to recover outstanding arrears of $73.3 million net for the period November 2019 - February 2020 with the first payment of $2.6 million net recently received.
- Cash balance of $147.8 million at year end (FY 2019: $190.8 million). Cash balance of $161.0 million at 30 March 2021.
- The Company has hedged c.60% of Q2 and Q3 2021 forecast net production at a floor price of $35/bbl and $40/bbl respectively, while retaining full upside exposure.
- Resumption of expansion activity with drilling operations expected to begin in Q3 resulting in an increase in gross production towards 55,000 bopd in Q1 2022.
- Reinstatement of at least a $25 million annual dividend . A $25 million dividend is subject to shareholder approval at the Annual General Meeting ("AGM") scheduled for 18 June 2021 and is expected to be paid in full on 2 July 2021 based on a record date of 25 June 2021 .
- With continuing strong oil prices, there may be opportunities to consider further distributions to shareholders this year.
- Guidance for 2021 of average gross production of 40,000 to 44,000 bopd, net Capex of $55-$65 million and gross unit Opex of $2.5 to $2.9/bbl.
(Source: GKP)The post GKP claims "Strong Start to 2021" first appeared on Iraq Business News.