Gulf Keystone Raises US$300 Million

PUBLISHED: Oct 04 2012 @ 09:27 | Comments (0) | More info about Kenneth G. Mondero

Independent oil and gas producer Gulf Keystone Petroleum (LSE:GKP) is raising funds through debt financing to fuel the development of its asset in the Kurdistan Region of Iraq as well as to keep the company afloat, three weeks after the company reported its loss for the first six months of the year tripled compared to the same period a year ago.

In a statement, GKP announced it has successfully placed senior unsecured convertible bonds valued at US$275 million and US$25 million in overallotment option granted to BNP Paribas, the bookrunner and lead manager of the offering, convertible to shares in the company with a maturity period of five years.

GKP had earlier communicated back in September, in its half year report, the firm was contemplating issuing debt and were in discussion with debt providers in relation with the development of the Shaikan oil field, which was declared a commercial discovery in August 2012 with mean gross oil-in-place of about 13.7 billion barrels of oil.

The Shaikan block is operated by GKP for a 75% interest that when placed in monetary scale, is equivalent to US$55 million in total cost since exploration began in the 283 square kilometre licence, 85 kilometres northwest of the Kurdistan capital, Erbil.

GKP plans a large-scale development of the Shaikan oilfield to reach a target production rate of between 30,000 and 40,000 barrels per day by middle of 2013 and 150,000 barrels per day by 2015, the cost of which may be known when the firm submits its Field Development Plan by January 2013.

Meanwhile, heavy trading of GKP shares were seen on the London Stock Exchange, triggering a drop in the share price to as much as 9.7% below yesterday’s close of 230 pence at 1:30 PM GMT.

The convertible bonds carries a coupon of 6.25% a year payable semi-annually in arrears with a premium of 27.5% to the volume weighted average share price between the opening and closing of the trading today will be added to determine the conversion price of the bond.

GKP intends to admit the bonds into trading on the Professional Securities Market of the London Stock Exchange by 30^th November 2012.

Company Spotlight

Gulf Keystone Petroleum Limited joined trading on the Alternative Investment Market in 2004 and now seeks to join the main market of the London Stock Exchange. The company had been subject of rumours of a takeover bid earlier this year.

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