TIDMGKP
RNS Number : 1948N
Gulf Keystone Petroleum Ltd.
16 January 2019
16 January 2019
Gulf Keystone Petroleum Ltd. (LSE: GKP)
("Gulf Keystone", "GKP" or "the Company")
Operational Update
55,000 bopd investment programme underway
Gulf Keystone Petroleum, a leading independent operator and
producer in the Kurdistan Region of Iraq ("Kurdistan" or "Kurdistan
Region"), is pleased to provide an operational and corporate
update.
Operational
-- Production operations, underpinned by strong performance of
the Shaikan Jurassic reservoir, continue in line with expectations.
Average gross production of 31,563 barrels of oil per day ("bopd")
was achieved in 2018, at the upper end of the 27,000 - 32,000 bopd
guidance.
-- The plant debottlenecking programme required to expand gross
production capacity to 55,000 bopd from PF-1 and PF-2 remains on
schedule for completion towards the end of 2019.
-- GKP has signed an agreement with Independent Oil Tools to use
'Rig 1' during the Company's workover programme to replace tubing
on SH-1 and SH-3 wells and install downhole pumps ("ESPs") on three
other existing wells. The rig has been mobilised and is currently
performing a workover on the SH-1 well to install larger bore
tubing to increase productivity.
-- GKP has also signed an agreement with the rig operator, DQE,
to use 'Rig 40' for its upcoming drilling campaign, due to start in
March 2019, with the first four wells (needed for the 55,000 bopd
target) expected to be completed in Q1 2020.
-- Since July 2018, all production from PF-2 has been exported
via the Atrush export pipeline which connects to the main Kurdish
export pipeline. Additional pumps along with a temporary unloading
facility have now been installed at PF-2 which allows the majority
of production from PF-1 to be trucked to PF-2 and exported via
pipeline. Today, only ca.3,000 bopd are exported by truck via
Fishkhabour which lowers HSSE exposure.
-- Further progress has been made, including delivery of all 16"
pipeline to the field, on the installation by KAR Group of the
pipeline also connecting PF-1 to the Atrush export pipeline. This
remains on schedule to be brought into service mid-2019, at which
point the residual trucking of crude oil will be eliminated.
-- GKP and its partner MOL have agreed on a staged investment
programme to increase gross production up to 110,000 bopd by 2024.
The revised Field Development Plan was submitted for approval to
the Ministry of Natural Resources in October 2018. The current
expansion to 55,000 bopd is already underway.
Corporate
-- GKP has continued to receive regular oil payments from the
Kurdistan Regional Government, with cash receipts of $225 million
net to GKP during 2018.
-- Cash balance of $294 million as at 15 January 2019. The
Company remains fully funded to complete the expansion to 55,000
bopd.
-- Gross capital expenditure guidance for the total 55,000 bopd
project phase remains unchanged at $200 million to $230
million.
-- Of the 2018 approved gross budget of $91 million, ca.$40
million has been transferred to early 2019 which was primarily
driven by delays in delivery of drilling and well completion
equipment.
Outlook
-- Given the active 2019 investment programme, particularly in
new wells and workovers, the Company anticipates improved
production levels this year and expects gross average production
guidance to be in the range of 32,000 - 38,000 bopd.
-- The above guidance takes account the latest drilling and
project schedules, but also the temporary plant shut-downs required
in 2019 for the tie-in of new facilities and wells being offline
while workovers are taking place.
-- 55,000 bopd production target moved to early 2020 due to
delays in the delivery of equipment, affecting the start date of
the drilling campaign, originally January, now March 2019.
-- The Company intends to host a Capital Markets Day in the
first quarter of 2019. Further details will be announced at a later
date.
Commenting, Jón Ferrier, CEO, said:
"Having successfully laid the foundations for our expansion
plans in 2018, we are very pleased to have now initiated our new
investment programme at Shaikan. We continue to make considerable
operational headway as we look to safely increase production to
55,000 bopd, in line with our strategy. 2019 is set to be another
important year for Gulf Keystone and we look forward to keeping our
stakeholders updated on our ongoing progress."
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
Enquiries:
Gulf Keystone Petroleum: +44 (0) 20 7514 1400
Jón Ferrier, CEO
Sami Zouari, CFO
Celicourt Communications: +44 (0) 20 7520 9266
Mark Antelme
Jimmy Lea
or visit: www.gulfkeystone.com
Notes to Editors:
Gulf Keystone Petroleum Ltd. (LSE: GKP) is a leading independent
operator and producer in the Kurdistan Region of Iraq and the
operator of the Shaikan field with current production capacity of
40,000 barrels of oil per day. Further information on Gulf Keystone
is available on its website www.gulfkeystone.com
Disclaimer
This announcement contains certain forward-looking statements
that are subject to the risks and uncertainties associated with the
oil & gas exploration and production business. These statements
are made by the Company and its 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 risks and uncertainties, including both
economic and business factors and/or factors beyond the Company's
control or within the Company's control where, for example, the
Company decides on a change of plan or strategy. 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 information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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