REG-Gulf Keystone Petroleum Ltd 2024 AGM Operational & Corporate Update

Gulf Keystone PetroleumAnnouncement

21/06/2024 07:00

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   Gulf Keystone Petroleum Ltd (GKP)
   2024 AGM Operational & Corporate Update

   21-Jun-2024 / 07:00 GMT/BST

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   21 June 2024    

                                        

                                        

                    Gulf Keystone Petroleum Ltd. (LSE: GKP)

                   (“Gulf Keystone”, “GKP” or “the Company”)

                                        

                    2024 AGM Operational & Corporate Update

                                        

                    Continued robust local sales performance

                  Declaration of $15 million interim dividend

                                        

   Ahead of today's  2024 Annual  General Meeting ("AGM"),  Gulf Keystone,  a
   leading independent operator and producer in the Kurdistan Region of Iraq,
   provides an operational and corporate update.

    

   Jon Harris, Gulf Keystone’s Chief Executive Officer, said:

   “We are pleased today to be welcoming GKP shareholders to our 2024 AGM. We
   have made  significant progress  as  a business  since  the 2023  AGM  and
   successfully adapted  to  our  new  operating  environment  following  the
   suspension of Kurdistan  exports, safely transitioning  our operations  to
   local sales  and sharply  reducing capital  expenditures and  costs. As  a
   result, we have been able to generate meaningful free cash flow,  enabling
   us to  strengthen  our  balance  sheet and  subsequently  return  cash  to
   shareholders this year through our recent share buyback programme of up to
   $10 million. The  Board and  I would like  to thank  our shareholders  for
   their continued support.

    

   Shaikan Field crude  sales to the  Kurdistan market have  continued to  be
   robust in recent  weeks, with  gross average sales  in 2024  year to  date
   increasing to  c.38,700  bopd  and current  prices  further  improving  to
   c.$28/bbl. As a result, our  liquidity position has continued to  improve.
   Given our performance and the local sales outlook, we are pleased today to
   declare an interim dividend of $15 million, payable in July 2024. We  will
   continue  to  review  additional  distributions  based  on  the  operating
   environment and liquidity needs of the Company.    

    

   We continue to actively engage with government stakeholders to push for  a
   pipeline exports restart solution  and unlock significant potential  value
   for shareholders. In the interim, we intend to maximise shareholder  value
   from local sales.”

    

   Operational

    

     • Rigorous focus on safety as 24-7 truck loading operations continue  at
       both production facilities, with no  Lost Time Incidents for over  520
       days
     • Local sales of Shaikan Field  crude remain robust, with gross  average
       sales in 2024 year to 19 June of c.38,700 bopd

     ◦ Following gross average local sales of c.48,200 bopd in May 2024, June
       2024  average  sales  to  date  have  been  lower  at  c.40,500  bopd,
       reflecting the temporary impact of  Eid al-Adha celebrations on  truck
       availability
     ◦ Realised prices have further improved, recently increasing from
       c.$27/bbl to c.$28/bbl, reflecting local market demand

   Financial

    

     • Local sales revenues, capital discipline and low-cost operations  have
       continued to  generate  free  cash  flow  and  improve  the  Company’s
       liquidity position
     • The Company’s cash balance was $99 million as at 20 June 2024

    

   Outlook

    

     • GKP remains focused on maximising  shareholder value from local  sales
       and unlocking significant potential additional value from the  restart
       of Kurdistan exports

    

   Shaikan Field

     • The Company sees continued robust local sales demand in the near term
       recognising that longer term market dynamics remain uncertain
     • Planned safety-critical upgrades and maintenance later this year are
       expected to require the shutdown of PF-1 for approximately three weeks
       with an expected gross sales impact of c.26,000 bopd
     • The Company continues to exercise  strict capital discipline and  cost
       control to  maximise  free  cash  flow  while  maintaining  production
       capacity to respond to local demand and the restart of exports

     ◦ Expected monthly aggregate net capex, operating costs and other G&A in
       2024 remains c.$6 million, including estimated 2024 net capex of c.$20
       million
     ◦ Subject to local sales demand and considering the Company’s limited
       capital programme, gross production potential remains 45,000 – 48,000
       bopd, following recent optimisations to well performance
     ◦ The Company continues to review low cost, quick payback opportunities
       to optimise production, avoid traces of water and manage field
       declines estimated at 6-10% per year

   Shareholder returns

     • GKP remains  committed  to  returning  excess  cash  to  shareholders,
       subject to  conserving  sufficient  liquidity to  manage  the  current
       operating environment and ensuring the  Company is able to  transition
       successfully from local sales to the restart of Kurdistan exports  and
       normalisation of KRG payments
     • In May  2024,  the  Company  successfully  launched  a  share  buyback
       programme of up to $10 million

     ◦ In response to GKP’s share price increasing following the announcement
       of the programme, the Company moderated the pace of the buyback, with
       over $5 million completed to date
     ◦ The Company intends to complete the programme following the AGM
       subject to shareholder approval of resolution 9

     • Given our improving liquidity and the current outlook, the Company  is
       pleased to announce the declaration of a $15 million interim dividend

     ◦ $15 million interim dividend is equivalent to 6.832 US cents per
       Common Share based on the Company’s total issued share capital as at
       20 June
     ◦ Expected to be paid on 19 July 2024, based on a record date of 5 July
       2024 and ex-dividend date of 4 July 2024
     ◦ Shareholders will have the option of being paid the dividend in either
       GBP or USD, with the default currency GBP

     • With improvements in the operating environment, the Company’s ambition
       is  to  reinstate  an  appropriate  distributions  policy  to  provide
       shareholders with greater clarity on returns

     ◦ In the interim, the Board will continue to review the Company’s
       capacity for additional shareholder returns via dividends or buybacks
       based on the operating environment and the Company’s liquidity needs

   Kurdistan exports

     • The Company continues to actively engage with government stakeholders
       for a pipeline exports restart solution and unlock significant
       potential value for shareholders:

     ◦ While it remains uncertain when exports will restart, political and
       commercial negotiations are ongoing, with recent tripartite meetings
       taking place in Baghdad between the Federal Government of Iraq
       ("FGI"), KRG and International Oil Companies (“IOCs”), including GKP
     ◦ Together with other IOCs operating in Kurdistan, GKP is ready to
       restart exports, contingent upon reaching agreements on payment surety
       for future oil exports, the repayment of outstanding receivables and
       the preservation of current contract economics

    

   2024 AGM

    

   Gulf Keystone is today hosting its 2024 AGM at 9 A.M. BST via webcast.  It
   will not be possible  to attend the meeting  in person but all  registered
   Gulf Keystone  shareholders  are  invited  to  view  the  webcast  at  the
   following link:  1 http://meetnow.global/gkpagm2024. Joining  instructions
   are       available        on       Gulf        Keystone's        website:
    2 https://www.gulfkeystone.com/investors/agm.

    

   The AGM will be hosted by  Martin Angle, Non-Executive Chairman, and  will
   include a presentation by Jon Harris, Chief Executive Officer, and Gabriel
   Papineau-Legris,  incoming  Chief  Financial   Officer.  A  copy  of   the
   presentation will be available  to view on the  Investors section of  Gulf
   Keystone's                                                         website
   ( 3 https://www.gulfkeystone.com/investors/presentations). A recording  of
   the presentation will also be available to view on the same page later  in
   the day following the conclusion of the AGM.

    

    

   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

   & Corporate Communications               4 aclark@gulfkeystone.com

    
   FTI Consulting                          +44 (0) 20 3727 1000
   Ben Brewerton
                                            5 GKP@fticonsulting.com
   Nick Hennis

    

   or visit:  6 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  7 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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   Dissemination of a Regulatory Announcement, transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

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   ISIN:          BMG4209G2077
   Category Code: MSCM
   TIDM:          GKP
   LEI Code:      213800QTAQOSSTNTPO15
   Sequence No.:  329299
   EQS News ID:   1930129


    
   End of Announcement EQS News Service

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   4. mailto:aclark@gulfkeystone.com
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