TIDMGKP
RNS Number : 3041Z
Gulf Keystone Petroleum Ltd.
24 January 2022
24 January 2022
Gulf Keystone Petroleum Ltd. (LSE: GKP)
("Gulf Keystone", "GKP" or "the Company")
Operational & Corporate Update
Gulf Keystone, a leading independent operator and producer in
the Kurdistan Region of Iraq, today provides an operational and
corporate update.
Jon Harris, Gulf Keystone's Chief Executive Officer, said:
" We are pleased today to declare an additional interim dividend
of $50 million, bringing distributions over the past eight months
to $150 million in line with our commitment to balance investment
in growth with returns to shareholders.
Since the beginning of 2022, gross production peaked at just
over 50,000 bopd and has averaged c.46,800 bopd, versus the 2021
average of 43,440 bopd. However, the lower productivity of recently
completed wells, SH-13 and SH-14, and temporarily curtailed
production from SH-12, have resulted in a delay in gross production
increasing to 55,000 bopd. 2022 gross average production is
expected to be 44,000 to 50,000 bopd.
GKP's substantial production base at current oil prices
continues to generate significant cash flow and value for Gulf
Keystone's stakeholders. On approval of our recently submitted
Field Development Plan, we are well positioned to achieve
sustainable growth from the Shaikan Field, which has delivered
close to 100 MMstb, and has 489 MMstb of estimated 2P gross
reserves remaining."
Operational
-- Continued strong focus on safety in 2021 despite one
previously reported lost time incident ("LTI"); currently no LTIs
recorded for over 90 days
-- Gross average production for 2021 of 43,440 bopd, at the
upper end of guidance range; gross average production in 2022 year
to date of c.46,800 bopd
-- Drilling of SH-15 progressing well; continue to expect start-up in Q2 2022
-- Due to well productivity, the increase in gross production
towards 55,000 bopd has been delayed
o SH-13 & SH-14
-- Following completion of the acid stimulation programme on
SH-13, and the clean-up of SH-14, both wells were brought on stream
in December 2021 and their productivity has been below
expectations
-- An acid stimulation programme for SH-14 is currently
ongoing
o SH-12
-- Following the early appearance of trace quantities of water,
production from the well has been temporarily curtailed, in line
with the Company's prudent reservoir management strategy . The
Company is investigating options to maximise near-term production
from the well
-- Water ingress is common in fractured carbonate reservoirs
like the Shaikan Field. Gulf Keystone has historically experienced
trace amounts of water in a few other wells and has been
successfully optimising their production levels. The Company
continues to expedite plans to add water handling to further
optimise production
-- The Company does not expect any material impact on reserves
or medium-term production potential. Considering cumulative gross
production of c.99 MMstb, 2P gross reserves are estimated to be 489
MMstb at 31 December 2021, based on the 2020 Competent Person's
Report adjusted for 2021 production
Financial
-- Following $100m of dividends distributed in 2021, Gulf
Keystone is pleased to announce that the Board has approved the
declaration of an additional interim dividend of $50 million,
equivalent to 23.394 US cents per Common Share of the Company
-- The interim dividend is expected to be paid on 25 February
2022, based on a record date of 11 February 2022. The Company will
disclose the pounds sterling rate per share prior to the
ex-dividend date of 10 February 2022
-- $283.2 million ($221.7 million net to GKP) received from the
Kurdistan Regional Government in 2021 for payments of crude oil
sales and recovery of outstanding arrears, with an additional $89.0
million ($69.7 million net to GKP) received in January 2022 for the
combined September 2021 and October 2021 crude oil sales and
arrears payments
-- The current outstanding arrears balance is $28.6 million net
to GKP related to the January and February 2020 invoices
-- Robust balance sheet, with a cash balance of $228 million as at 21 January 2022
Outlook
-- The Company expects gross average production for 2022 of
44,000 to 50,000 bopd, reflecting the anticipated production
contribution from SH-15 and benefits of well workover
activities
-- Gulf Keystone continues to engage with the Ministry of
Natural Resources ("MNR") following the submission of a draft FDP
in 2021. The Company will revert to the market at an appropriate
time with details on the FDP and updated production guidance
-- 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
This announcement contains inside information for the purposes
of the UK Market Abuse Regime.
Enquiries:
Gulf Keystone: +44 (0) 20 7514 1400
Aaron Clark, Head of Investor Relations aclark@gulfkeystone.com
Celicourt Communications: + 44(0) 20 8434 2754
Mark Antelme GKP@Celicourt.uk
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. 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.
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END
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