Gulf Keystone Petroleum Ltd. Operational and Corporate Update (2889H)
24 Marzo 2020 - 01:00AM
UK Regulatory
TIDMGKP
RNS Number : 2889H
Gulf Keystone Petroleum Ltd.
24 March 2020
24 March 2020
Gulf Keystone Petroleum Ltd. (LSE: GKP)
("Gulf Keystone", "GKP" or "the Company")
Operational and Corporate Update
GKP adopts prudent approach in response to economic backdrop
Shaikan production continues unaffected
Gulf Keystone Petroleum, a leading independent operator and
producer in the Kurdistan Region of Iraq ("Kurdistan" or "Kurdistan
Region"), is providing an operational and corporate update.
Jón Ferrier, Gulf Keystone's Chief Executive Officer, said:
"In these challenging times, we remain focused on the safety of
our people and have adapted our operations to ensure their
continued welfare. With the associated economic backdrop compounded
by a delay in payments, we are taking a prudent approach to running
our business with a sharp focus on financial discipline and
maintaining liquidity. While we were on track to deliver the
expansion to 55,000 bopd in Q3 2020, flexibility is the order of
the day and as such, beyond our existing commitments, we have
suspended further expansion activity until conditions improve.
Underpinning the Company's strong investment case is the quality
and scale of the Shaikan Field, which continues to perform well
with current production of c.38,000 bopd.
Given our strong balance sheet with cash of $154 million at 23
March 2020, no debt repayment until mid-2023, limited capital
expenditure commitments and a low-cost structure, we are highly
confident in our future ability to capture the significant value in
Shaikan, for the benefit of all stakeholders."
Operational
-- Production from the field continues in line with expectations
at c.38,000 bopd, currently unaffected by the impact of
COVID-19.
-- GKP was on track to achieve 55,000 bopd in Q3 2020, prior to
the previously announced suspension of expansion activity.
-- The Company remains committed to the elimination of routine
gas flaring. Its gas management plan now envisages the export of
sweet gas instead of gas reinjection. This follows the results of
the SH-9 well, which did not encounter a gas cap. The well has been
completed as an oil producer and is in the process of being tied
into PF-1.
-- A revised Field Development Plan ("FDP") is currently
expected to be submitted this year, reflecting the new gas
management project. Upon FDP approval, planning will commence for
FEED ("Front End Engineering and Design").
Outlook
-- GKP will maintain a conservative financial position with a
clear focus on cost control and cash preservation. At current
production levels, the Company covers all operating, general and
administrative costs and interest payments with a Brent price of
c.$35 per barrel.
-- In the absence of further expansion activity, 2020 capital
expenditures, including expenditures incurred to date and remaining
firm commitments, are estimated to be between $50 million and $60
million (gross).
-- The delay of further investment into Shaikan is expected to
impact prior gross 2020 production guidance of 43,000-48,000 bopd
and achieving 55,000 bopd in Q3 2020.
-- Given the macro uncertainty, the Board is suspending guidance
until such time as the outlook becomes clearer.
-- The Board recognises the importance of distributions to
shareholders and intends to consider the appropriateness and timing
of the ordinary dividend and any share buyback - upon resumption of
payments and when it has a clearer view of the scale and duration
of the impact of COVID-19 and the macro-economic effects on the
business.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
Enquiries:
Celicourt Communications: + 44(0) 20 8434 2754
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. 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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