GKP “on Track” to Meet Production Guidance

Gulf Keystone has provided an operational and corporate update:

Jon Harris, Gulf Keystone's Chief Executive Officer, said:

"We are pleased to announce that we have submitted a draft Field Development Plan to the Ministry of Natural Resources. While the timing of FDP approval is uncertain given the scale of the project, this is an important step forward to develop the significant potential of the Shaikan Field while more than halving CO2 per barrel by eliminating routine flaring.

"Production performance has been strong, reaching a record monthly average high in October, and we are on track to meet our tightened 2021 gross average production guidance. With our leverage to oil prices and low cost base, strong production has translated into robust cash flow generation. We have experienced operational challenges with SH-13 and SH-14 and, subject to well productivity, we are now targeting to increase gross production towards 55,000 bopd in January."

Shaikan Field Development Plan ("FDP")

  • Following extensive constructive engagement with the Ministry of Natural Resources ("MNR"), Gulf Keystone and its partner Kalegran B.V. (a subsidiary of MOL Hungarian Oil & Gas plc) ("MOL") have submitted a draft FDP to the MNR
  • The FDP includes the continued ramp-up of Jurassic oil production , an appraisal of the Triassic reservoir and a Gas Management Plan to more than halve CO2 per barrel by eliminating routine flaring
  • The FDP is subject to review and final approval by the MNR, the timing of which is uncertain given the scale of the project. Final investment decision ("FID") is also subject to approval of both Boards of Directors of Gulf Keystone and MOL, and the Company will provide an update at the appropriate time

Operational

  • Following over 660 days without a Lost Time Incident ("LTI"), we were disappointed to have an LTI during drilling operations in October. Following the incident, we have completed a full investigation and have put in place a number of remedial actions
  • Gross average production from the field in 2021 to date of c.43,300 bopd, in line with tightened 2021 guidance, with record gross average production in October of 45,654 bopd
  • SH-14 has been drilled, completed and is currently being hooked-up , following delays caused by equipment failures and wellbore issues in the subsequent side-track
  • Following the rig move from the SH-13/SH-14 well pad, an acid stimulation programme is now underway on SH-13 to access the broader fracture network in the reservoir after an area of low fracture connectivity was encountered. Acid stimulation is commonly used in carbonate reservoirs such as Shaikan
  • Activities are ongoing to start production from SH-13 and SH-14 and the increase in gross production towards 55,000 bopd, subject to well productivity, is now expected in January
  • Preparations are ongoing to spud SH-15 (formerly referred to as SH-G) which is now expected to be brought onstream in Q2 2022
  • Planned installation of two electric submersible pumps deferred to 2022 after successful trial of lower cost jet pump solution at SH-10 and stronger than expected SH-11 reservoir performance

Financial

  • $283.2 million ($221.7 million net to GKP) received from the Kurdistan Regional Government in 2021 to date for payments of crude oil sales and recovery of outstanding arrears. $32.4 million of the original total net arrears balance of $73.3 million has now been recovered
  • The delayed payment for September 2021 crude oil sales and arrears (gross: $37.8 million; net to GKP: $29.6 million) is expected to be paid shortly
  • Following the payment of the $50 million interim dividend on 8 October 2021, $100 million of dividends have been distributed to shareholders in 2021, in line with the Company's strategy of balancing investment in growth with shareholder returns
  • Robust balance sheet, with a cash balance of $176 million as at 16 December 2021

Outlook

  • On track to meet tightened 2021 average gross production guidance of 42,000 to 44,000 bopd
  • 2021 net Capex guidance lowered from $75-$85 million to approximately $55 million, principally due to the revised spud date of SH-15 and deferral of installation of SH-10 and SH-11 electric submersible pumps, partially offset by the higher cost of SH-14
  • 2021 gross Opex guidance of $2.5 to $2.9/bbl remains unchanged
  • With continuing strong oil prices and cash flow generation, there may be opportunities to consider further distributions to shareholders and to optimise the capital structure

AGM update

At the Company's Annual General Meeting ("AGM") held on 18 June 2021, all resolutions were successfully passed. However, resolutions 2 and 6, being the re-election of the Company's Chairman and Chief Financial Officer, failed to attain the support of 80% of the shareholders who voted. Voting turnout in general was low relative to prior years, with approximately 49% of the total shareholder register voting. The Company continues to look at ways to increase voting turnout at future general meetings.

Substantially all the votes against resolutions 2 and 6 were from a single major shareholder. In accordance with Provision 4 of the 2018 UK Corporate Governance Code, the Board has consulted with the single shareholder, and, as part of this exercise, also consulted with the Company's other major shareholders.

Feedback received from the single shareholder encompassed issues principally related to the Company's operational progress, organisational structure and capital allocation. The Company also received feedback from other major shareholders, all of which were supportive of resolutions 2 and 6. The Board has carefully considered the issues and has addressed them, to the extent possible or necessary. The independent members of the Board continue to hold every confidence in both the Chairman and Chief Financial Officer, recognising the value and contribution each bring to the Company.

The Company will continue to engage with the major shareholder in question and welcomes ongoing engagement and feedback from all shareholders.

(Source: GKP)

The post GKP "on Track" to Meet Production Guidance first appeared on Iraq Business News.

GKP Shares Rally on Half-Year Results

By John Lee.

Shares in Gulf Keystone Petroleum (GKP), a leading independent operator and producer in the Kurdistan Region of Iraq, were trading 12 percent higher today after the company announced its results for the half year ended 30 June 2021.

Jon Harris (pictured), Gulf Keystone's Chief Executive Officer, said:

"I am pleased to report strong operational and financial performance in the first half of 2021, despite the continuing challenges of the COVID-19 pandemic. Our leverage to the recovery in oil prices, combined with safe and reliable production towards the top end of our guidance range and a continued sharp focus on costs, has resulted in significant cash flow generation. With continued strong production performance from the Shaikan Field, we are tightening the 2021 production guidance range to 42,000 - 44,000 bopd.

"We continue to deliver against our commitment to balance investment in growth and returns to shareholders. Today, we are pleased to declare an interim dividend for 2021 of $50 million, bringing total dividends this year to $100 million.

"The early restart of the drilling campaign in June enables us to maintain production growth momentum and to drill an additional well, SH-G, in 2021 after completion of SH-14, the final well in the 55,000 bopd investment programme. SH-14 is expected to come onstream in Q4 2021, while we expect SH-G to come onstream in Q1 2022.

"We continue to work closely with the MNR and our partner on the preparation of the Shaikan FDP and expect to submit the FDP to the MNR in Q4 2021 for approval."

Highlights to 30 June 2021 and post reporting period

Operational

  • Remain focused on safe and reliable operations with No Lost Time Incident ("LTI") recorded for over 600 days and no recordable incidents for around 550 days
  • Continuing to manage the challenges presented by COVID-19 to protect the health of staff and contractors
  • Strong average gross 2021 production to 31 August 2021 of c.42,900 bopd, up 18% from the corresponding period in 2020 and towards the top end of 2021 guidance; gross production on 31 August 2021 was 42,842 bopd
  • Drilling activities progressing well following early restart in June; SH-13 expected to come onstream imminently ; drilling of SH-14 underway with completion and hook-up expected in Q4 2021
  • Capitalising on early restart of drilling and opportunity to maintain a continuous drilling programme, planning to spud SH-G in Q4 2021, after completion of SH-14. SH-G is expected to commence production in Q1 2022
  • SH-G, the first well after the 55,000 bopd expansion programme, is an opportunity to maintain growth and momentum while we prepare the Shaikan Field Development Plan ("FDP")
  • Completed debottlenecking of PF-2, increasing total field processing capacity to c.57,500 bopd

Financial

  • H1 2021 revenue up 162% to $130.7 million (H1 2020: $49.9m) contributing to a return to profit after tax of $64.8 million (H1 2020: $33.1 million loss)
  • Adjusted H1 2021 EBITDA of $93.8 million, more than triple $27.5 million in H1 2020, driven by the Company's strong leverage to the recovery in oil prices, increase in production and low-cost base:
    • Realised price up 129% to $43.7/bbl (H1 2020: $19.1/bbl)
    • H1 2021 gross average production up 17% to 43,516 bopd (H1 2020: 37,159 bopd)
    • H1 2021 gross Opex per barrel of $2.4/bbl, below 2021 guidance range of $2.5-$2.9/bbl
  • Net Capex of $14.1 million (H1 2020: $38.5 million), with the restart of the 55,000 bopd expansion programme
  • Total dividends of $50 million paid to date, including an annual dividend of $25 million and a special dividend of $25 million
  • Robust cash balance of $177.4 million at 1 September 2021

Outlook 

  • Tightening 2021 average gross production guidance range from 40,000 - 44,000 bopd to 42,000 - 44,000 bopd
  • Maintaining 2021 gross Opex per barrel guidance of $2.5 to $2.9/bbl
  • The addition of SH-G increases 2021 net Capex guidance from $55-$65 million to $75-$85 million
  • With continued constructive engagement with the Ministry of Natural Resources ("MNR") and the Company's partner Kalegran B.V. (a subsidiary of MOL Hungarian Oil & Gas plc) ("MOL"), Gulf Keystone is expecting to submit an FDP in Q4 2021 to the MNR for approval
    • The FDP includes the continued ramp-up of Jurassic oil production, appraisal of the Triassic reservoir and a Gas Management Plan
    • We continue to optimise the scope, schedule and cost of the FDP
  • Developing Gulf Keystone's sustainability strategy, with the primary environmental focus on more than halving CO2 per barrel by 2025 by eliminating flaring
  • In line with the Company's strategy of balancing investment in growth and returns to shareholders, Gulf Keystone is pleased to declare an interim dividend for 2021. The 2021 interim dividend is $50 million to be paid on 8 October 2021 based on a record date of 24 September 2021
  • Following payment of the interim dividend, the Company will have distributed $100 million of dividends in 2021
  • With continuing strong oil prices and cash flow generation, there may be opportunities to consider further distributions to shareholders and to optimise the capital structure

More here.

(Sources: GKP, Yahoo!)

The post GKP Shares Rally on Half-Year Results first appeared on Iraq Business News.

GKP claims “Strong Start to 2021”

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

Operational

  • 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.

Financial

  • 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.

Outlook

  • 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.

Full announcement here.

(Source: GKP)

The post GKP claims "Strong Start to 2021" first appeared on Iraq Business News.

GKP Resumes Kurdistan Investment Programme

Gulf Keystone Petroleum (GKP) has announce the resumption of the Company's growth plans to ramp-up gross production towards 55,000 barrels of oil per day ("bopd").

Jon Harris (pictured), Gulf Keystone's Chief Executive Officer, said:

"After a year of successfully managing the impact of COVID-19 on our people and production operations at Shaikan, we are pleased to announce that we are resuming the 55,000 bopd expansion programme.

"Workstreams have already begun, and we are targeting to restart the drilling of SH-13 in Q3 2021, subject to managing the continuing impact of COVID-19 on the movement of people, services and equipment."

With support from its partner Kalegran B.V. (a subsidiary of MOL Hungarian Oil & Gas plc), Gulf Keystone has restarted 55,000 bopd expansion activity.

Considering the requirement to manage the ongoing impact of COVID-19 and to remobilise people, services and equipment, the Company currently expects drilling operations to begin in Q3 2021.

Remaining expansion activity includes completion of SH-13, which was suspended last year, drilling SH-I, the final well in the programme from the same pad, and installing electric submersible pumps in two existing wells.

Guidance for 2021 average gross production remains unchanged at 40,000 to 44,000 bopd, with the increase in gross production towards 55,000 bopd expected to occur in Q1 2022.  Remaining Capex required to deliver the 55,000 bopd programme is estimated to be $40-45 million net, resulting in total 2021 Capex of $55-65 million net.

(Source: GKP)

The post GKP Resumes Kurdistan Investment Programme first appeared on Iraq Business News.

GKP issues Update on Shaikan Field

Gulf Keystone Petroleum (GKP) has provided a Competent Person's Report ("CPR") update on the Shaikan Field in which it has an 80% working interest.  

The CPR, an independent third-party evaluation of the Company's reserves and resources as at 31 December 2020, was prepared by ERC Equipoise ("ERCE").

Jon Harris, Gulf Keystone's Chief Executive Officer, said:

"The updated CPR demonstrates the continuing long-term strong performance of the Shaikan Field with gross 2P+2C reserves and resources volumes in line with the 2016 CPR, after adjusting for production over the period.   

"Prior Company estimates are reaffirmed with gross 2P+2C reserves and resources of c.800 MMstb at 31 December 2020, including over 500 MMstb of gross 2P reserves.  

"We have a deep understanding of the Shaikan Field that has produced over 80 MMstb to date and are pleased that the latest CPR matches our interpretation and understanding of the geological model, underlining the considerable untapped potential of the field."

"We had a strong start to the year in January, which saw GKP's highest monthly average daily gross production of 44,405 bopd.  As conditions continue to improve, we look forward to resuming the 55,000 bopd expansion project and shareholder distributions."  

Highlights

  • The CPR incorporates significant incremental information, including an updated development plan, new wells, production data and further technical analysis, since the last CPR was prepared by ERCE in 2016.
  • Gross 2P reserves + 2C contingent resources1 of 798 MMstb2 at 31 December 2020 are consistent with volumes as at 31 December 2019, adjusted principally for 2020 production.
  • Gross 1P reserves increased to 240 MMstb, up 33% after adjusting for 2020 production.
  • Gross 2P Jurassic reserves were revised down marginally (2%) to 505 MMstb, after adjusting for 2020 production. 
  • Gross 2P Triassic and Cretaceous reserves of 47 MMstb were reclassified to gross 2C contingent resources1, while the Field Development Plan is progressed with the Ministry of Natural Resources.
  • Shaikan continues to deliver stable production with average gross production in January of 44,405 bopd, the highest monthly average to date from the field.
  • The Shaikan Field has significant future production potential with a gross 1P reserves life index3 of c.15 years and a gross 2P reserves life index3 of over 31 years, assuming January 2021 production levels.

Gross reserves and resources based on the Company's estimates at 31 December 2019 and the CPR at 31 December 2020 were:

31 December 2020

1P

2P

2C 1

2P+2C 2

Formation (MMstb)

  Reserves

Resources

Jurassic

240

505

80

585

Triassic

-

-

157

157

Cretaceous

-

-

56

56

Total - Gross

240

505

293

798

31 December 2019

1P

2P

2C 1

2P+2C 2

Formation (MMstb)

  Reserves

Resources

Jurassic

  175

  531

  80

  611

Triassic

  18

  44

  106

  150

Cretaceous

  1

  3

  53

  56

Total - Gross

  194

  578

  239

  817

The reconciliation of changes in reserves and resources between the Company's estimates at 31 December 2019 and the CPR at 31 Decemer 2020 is as follows:

 

 

1P

2P

2C 1

2P+2C 2

Gross (MMstb)

  Reserves

Resources

31 December 2019

  194

  578

  239

  817

Production

(13)

(13)

  - 

(13)

Reclassifications

(19)

(47)

  +47

  - 

Revisions

  +78

(13)

  +7

(6)

31 December 2020

  240

  505

  293

  798

GKP's 80% net WI4 share of reserves and resources at 31 December 2020 were: 

1P

2P

2C 1

2P+2C 2

Formation (80% WI) (MMstb)

  Reserves

Resources

Jurassic

  192

  404

  64

  468

Triassic

  - 

  - 

  125

  125

Cretaceous

  - 

  - 

  45

  45

Total - Net WI

192

404

  234

638

1.  Contingent resources volumes are classified as such because there is technical and commercial risk involved with their extraction. In particular, there may be a chance that accumulations containing contingent resources will not achieve commercial maturity. The 2C (best estimate) contingent resources presented are not risked for chance of development.

2.  Aggregated 2P+2C estimates should be used with caution as 2C contingent resources are commercially less mature than the 2P reserves.

3.  Reserves life index is calculated as gross 1P reserves or gross 2P reserves, as appropriate, divided by annualised January 2021 gross production.

4.  Net working interest reserves and resources do not represent the net entitlement resources under the terms of the PSC.

 (Source: GKP)

The post GKP issues Update on Shaikan Field first appeared on Iraq Business News.

GKP Shares Rise as Workover Completed

By John Lee.

Shares in Gulf Keystone Petroleum (GKP) were trading up 5 percent on Monday morning as the company announced that the planned workover on the SH-12 well has been completed safely.

Jón Ferrier (pictured), Gulf Keystone's Chief Executive Officer, said:

"We continue to successfully manage the challenging macro backdrop and make operational progress. I am pleased to report the successful planned workover of the SH-12 well, which is currently producing at over 5,000 bopd, driving an approximately 15% increase in production from the field.

"As announced in our half-year results, the SH-12 workover was one of a series of opportunities identified which in aggregate were expected to increase gross production by c.5,000 bopd. With the very successful SH-12 workover result and work to bring SH-9 online and the debottlenecking of PF-1 proceeding as planned, we now expect to exceed our original incremental production expectation.

"We are also pleased to confirm that we expect average production from the Shaikan Field this year to be at the top end of our guidance range for 2020. I look forward to updating all our stakeholders in December 2020 on the wider progress we have made as a business."

Initial production from SH-12 was from the Lower Jurassic Butmah reservoir providing valuable information for future development planning. The workover involved moving up hole, perforating and producing from the main SAM reservoir.

SH-12 returned to production on 15 November 2020 and the well is currently flowing at a stable rate of over 5,000 bopd. The additional production flows to the PF-2 production facility, where there is spare production capacity. The workover design allowed the original Electronic Submersible Pump ("ESP") completion to remain in place during the operation and the ESP is now back-in service. The operation came in ahead of schedule and on budget.

The Company is pleased to confirm that average 2020 gross production is expected to be at the upper end of the previously disclosed guidance range of 35,000 - 36,000 bopd, with the field currently producing at c.39,000 bopd.

The Company intends to publish an Operational & Corporate Update in December 2020.

(Sources: GKP, LSE)

The post GKP Shares Rise as Workover Completed first appeared on Iraq Business News.

GKP Reports Loss for 1H 2020

By John Lee.

Shares in Gulf Keystone Petroleum (GKP) were trading largely unchanged at lunchtime on Thursday, after the company announced a loss for the half year ended 30 June 2020.

Company statement:

Jón Ferrier, Gulf Keystone's Chief Executive Officer, said:

"We moved decisively to protect the business and preserve liquidity in response to COVID-19 and the decline in oil prices. We are actively managing the impact of COVID-19 and working to protect our staff. The Shaikan Field continues to perform well with production up more than 25% compared to H1 2019. 

"While waiting to resume the 55,000 bopd project, the Company has identified a number of simple, low-cost, high-impact investments that have the potential to increase the current base level of gross production by approximately 5,000 bopd and, subject to a satisfactory operating environment, could be implemented in the near-term.

"We continue to maintain a tight focus on cost control and further savings will be reflected in the full year results.

"With our current measures in place, we are pleased to provide 2020 gross production guidance of 35,000 to 36,000 bopd. With continued improvement in macro and operating conditions, we are well positioned to deliver the long-term potential of the Shaikan Field and look forward to resuming shareholder distributions over time."

Highlights to 30 June 2020 and post reporting period

Operational

  • Operations at Shaikan continue safely and reliably, with no Lost Time Incidents ("LTIs") reported during 2020.
  • The Shaikan reservoir continues to perform in line with expectations, with current gross production of c.36,000 bopd and average 2020 gross production to 1 September 2020 of 36,272 bopd.
  • At the time of suspension of investment plans in March 2020, key drilling and facilities activities were on track to achieve the 55,000 bopd target in Q3 2020.
  • GKP is preparing to return to production growth, and has identified a number of quick payback projects, which are expected to increase gross production by c.5,000 bopd for an aggregate gross cost of c.$3 million. Planning is ongoing and, subject to a satisfactory operating environment, could be implemented in the near-term.
  • The Company remains committed to operating sustainably. Throughout the pandemic, the Company has continued to actively support the communities around Shaikan and has donated essential equipment to nearby hospitals.

Financial

  • H1 2020 revenue of $49.9 million (H1 2019 - $95.6 million) and Adjusted EBITDA of $27.5 million (H1 2019 - $59.0 million) resulted from the decline in oil prices, partially offset by increased production. Such factors combined with increased depreciation, depletion and amortisation ("DD&A") due to production growth drove a loss after tax of $33.1 million (H1 2019 - $24.2 million profit).
  • Opex per barrel in H1 2020 was $2.6/bbl, below guidance of $2.7 - $3.1/bbl. Operating costs and general and administrative ("G&A") expenses savings of 12% contributed to expense reductions compared to H1 2019, and further savings are expected in H2 2020 with the significant reduction in activity and continuing focus on cost control.
  • Net capex in H1 2020 was $38.5 million. H2 2020 net capex is expected to be minimal, comprised principally of long-lead time deliveries that will expedite the eventual restart of growth activities. Full year net capex is expected to be within the original $40-48 million guidance range.
  • To protect cash flows, Gulf Keystone hedged c.70% of its H2 2020 net production at a floor price of $35/bbl while retaining full upside exposure.
  • In Q1 2020, the Company completed the second tranche of its share buyback programme bringing total 2019 and 2020 capital distributions to $99 million.
  • Since March 2020, the Kurdistan Regional Government ("KRG") has paid for the last five months of oil sales in the following month as per its commitment to international oil companies ("IOCs").
  • The Company has a strong balance sheet with $140 million of cash at 2 September 2020 and no debt repayment until mid-2023.

  Corporate

  • As previously announced, Jón Ferrier, CEO, has informed the Board of his intention to retire from the Company upon appointment of a successor and after a period of handover. The search process for a new CEO is underway.
  • The Company announced the re-appointment of Garrett Soden to the Board of GKP as a Non-Independent Non-Executive Director representing funds managed by Lansdowne Partners Austria GmbH.

Outlook

  • After successfully managing the impacts of COVID-19 over the last several months, the Company is pleased to provide 2020 gross production guidance of 35,000 bopd to 36,000 bopd.
  • GKP is well positioned to restart its drilling programme to achieve 55,000 bopd when circumstances permit.
  • In line with its stated growth strategy, GKP continues to progress growth opportunities at Shaikan and will also consider potential value accretive inorganic options on an opportunistic basis.
  • The Company remains in a constructive dialogue with the KRG and will continue to seek the timely settlement of the overdue November 2019 to February 2020 invoices totaling $73.3 million (net). The KRG has committed that with the continuing improvement in the price of dated Brent above $50/bbl outstanding arrears will be reviewed.
  • GKP remains committed to maintaining its strong financial position and, as conditions continue to improve, returning to a balance of production growth and shareholder distributions.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

More here and here.

(Sources: GKP, Yahoo!)

The post GKP Reports Loss for 1H 2020 first appeared on Iraq Business News.

GKP CFO to Chair Oryx

Oryx Petroleum has announces the appointment of Sami Zouari (pictured) as Board Chair and Independent Director with immediate effect.

Mr. Zouari  succeeds Jean Claude Gandur who recently resigned from the Corporation as part of transactions consummated between The Addax and Oryx Group PLC and Zeg Oil and Gas Limited.

Sami Zouari was most recently the Chief Financial Officer and an Executive Director of Gulf Keystone Petroleum Limited, an independent oil and gas company that operates the Shaikan Field in the Kurdistan Region of Iraq. During his tenure, Mr. Zouari played a lead role in the operational and commercial transformation and the financial restructuring of Gulf Keystone into one of the premier independent exploration and production companies operating in the Kurdistan Region of Iraq and the wider Middle East. Prior to appointment at Gulf Keystone, Mr. Zouari held various positions at Total E&P and BNP Paribas.

Commenting today, Independent Director of Oryx Petroleum, Peter Newman, stated:

"We are delighted to welcome Sami to the Board. His extensive experience in the oil and gas sector in the Kurdistan Region of Iraq and the Middle East, his knowledge of financial markets, and his experience with corporate transformation processes will be enormously helpful to us as we confront financial challenges and seek to maximise value from the Hawler license."

Also commenting today, Chair of Oryx Petroleum, Sami Zouari, stated:

"The Hawler license is an asset I believe has significant potential. I look forward to working with the Board and Management of Oryx Petroleum to transform Oryx Petroleum into one of the leading independent exploration and production operators in the Kurdistan Region."

(Source: Oryx Petroleum)

Soden Re-joins GKP Board

Further to the recent announcement that Garrett Soden was to be re-appointed to the Board of Gulf Keystone Petroleum (GKP) as a Non-Independent Non-Executive Director representing funds managed by Lansdowne Partners Austria GmbH, the Company is pleased to confirm that the formal appointment process has now been completed and as such welcomes Mr Soden back to the Board of Gulf Keystone.

Garrett Soden has extensive experience as a senior executive and board member of various public companies in the natural resources sector. He is currently President and CEO of Africa Energy Corp., a Canadian oil and gas exploration company focused on South Africa, and is also a Non-Executive Director of Etrion Corporation, Noble Group Holdings Limited and Panoro Energy ASA. Mr Soden has undertaken to conform to UK corporate governance standards in respect of external appointments.

Directorships held within the past five years:

Phoenix Global Resources plc

Gulf Keystone Petroleum Ltd

Petropavlovsk plc

PA Resources AB

RusForest AB

(Source: GKP)

GKP to Cut Workforce by 40%

By John Lee.

Gulf Keystone Petroleum (GKP) has provided an operational and corporate update in advance of Friday'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

  • Maintaining strong focus on safety with zero LTIs recorded in 2020.
  • 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.
  • 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.
  • DQE's Rig 40 has been stacked on site at zero cost, which will aid the timely resumption of drilling activities, when appropriate.
  • 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

  • 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%.
    • The Company is introducing 2020 guidance for Opex of $2.7 to $3.1 per barrel (vs $3.9 per barrel in 2019).
    • 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.
  • 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.
  • Cash balance of $144 million as at 17 June 2020.
  • 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

  • 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.
  • 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

  • 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.
  • 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.
  • GKP looks forward to resuming investment and shareholder distributions when conditions allow.

(Source: GKP)