Gulf Keystone Petroleum Ltd. Operational & Corporate Update (2101S)
22 Juni 2018 - 8:00AM
UK Regulatory
TIDMGKP
RNS Number : 2101S
Gulf Keystone Petroleum Ltd.
22 June 2018
22 June 2018
Gulf Keystone Petroleum Ltd. (LSE: GKP)
("Gulf Keystone", "GKP" or "the Company")
Operational & Corporate Update
Investment into Shaikan to increase production commences
Gulf Keystone, operator of the Shaikan Field in the Kurdistan
Region of Iraq, is pleased to provide an operational and corporate
update.
Highlights
-- Agreement with the Kurdistan Regional Government's ("KRG")
Ministry of Natural Resources ("MNR") and MOL Hungarian Oil &
Gas plc ("MOL") has been reached in relation to the investment
plans to increase gross production capacity to 55,000 barrels of
oil per day ("bopd") in the next 12 to 18 months.
-- Gulf Keystone has initiated contracting and procurement
activities to implement the 2018 approved capital expenditure of
approximately $91 million gross ($73 million net to GKP), which
includes workovers in existing wells (electric submersible pumps
("ESPs") and tubing replacements), drilling of a new well,
facilities improvement and plant debottlenecking.
-- The remainder of the required capital expenditure which is
currently estimated to be between $175 million to $215 million
gross (as previously set out in the 2017 Full Year Results) to
achieve 55,000 bopd gross production capacity is expected to be
part of the 2019 investment plan (which will also include
activities related to the further development of the field).
-- The Company continues to work on the revised Field
Development Plan, which is expected to be submitted to the MNR in
Q3 2018. The Company will provide an update on the details of the
investment plans for the 75,000 bopd and up to 110,000 bopd phases
when finalised.
-- Safety performance remains strong with over 3 million man
hours without a lost-time incident achieved since 2015.
-- Plant uptime between 1 January 2018 and 31 May 2018 has been
outstanding at over 99%, leading to an average gross production of
32,138 bopd for the period, just above the upper end of our
27,000-32,000 bopd guidance for 2018. Full-year guidance for 2018
remains unchanged.
-- A major milestone has been achieved with cumulative
production from the Shaikan Field reaching 50 million barrels. As a
result, in line with the terms of the Shaikan Production Sharing
Contract ("Shaikan PSC") and our previous disclosure, a production
bonus in the amount of $20 million ($16 million net to GKP) is now
payable to the KRG.
-- Hook-up of the 400m spur pipeline from Production Facility 2
to the Atrush export line is in its final stage and expected to be
operational shortly. This will eliminate trucking requirements for
a significant share of Shaikan production which will reduce HSE
exposure and is expected to improve netbacks to the Company.
Pipeline tie-in of Production Facility 1 will be part of the 2019
investment plan.
-- Payments from the KRG have been received on a regular basis
throughout the year. The Company has received gross payments of
$136.7 million ($107.3 million net to GKP) year to date.
-- The Company had cash amounting to $222 million as at 21 June 2018.
-- The Company continues its dialogue with the MNR and MOL in
order to achieve further contractual and commercial clarity in
relation to amendments of the Shaikan PSC which it anticipates
being concluded in Q3 2018.
Commenting, Jón Ferrier, CEO, said:
"We are very pleased with the progress we have made in recent
months on key commercial and operational matters and are delighted
that Gulf Keystone is now back to investment mode, with the
objective of achieving 55,000 bopd production capacity in the next
12 to 18 months; an important step towards the development of the
full potential of the Shaikan field."
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
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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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