GKP Trims Losses

GKP Trims Losses
April 6, 2017 in Iraq Oil & Gas News
Gulf Keystone Petroleum (GKP) has announced its results for the year ended 31 December 2016, which show reduced losses for the period:

Highlights to 31 December 2016 and post reporting period

Operational:

Gulf Keystone’s operations in the Kurdistan Region remained safe and secure throughout 2016. Plant uptime (at PF-1 and PF-2) of over 98%, once adjusted for export constraints, and strong HSSE performance with no lost-time incidents.
2016 gross production of 12.7 million barrels of oil (“MMstb”), an increase of 14% on 2015, equivalent to an average of 34,794 barrels of oil per day (“bopd”), at the upper-end of our 31,000-35,000 bopd guidance, with no formation water.
Shaikan-8 (“Sh-8”) was brought back on-stream on 11 March 2017 and, while it is still being tested, is producing dry oil at a rate of c.1,800 bopd.
Shaikan production for Q1 2017 averaged 36,293 bopd.
Current daily production is at c.38,000 bopd.
In April 2017, the Company received confirmation from ERC Equipoise (“ERCE”) verifying remaining 2P reserves of 615 MMstb, as at 31 December 2016.
In addition to our 2P reserves there are significant contingent resources of 239 MMstb (2C) as identified in the 2016 Competent Person’s Report (“CPR”) also provided by ERCE, as at 30 June 2016.
Gross production guidance for 2017 is set at 32,000-38,000 bopd; without further investment in the field – beyond maintenance capital – we would expect production levels at the lower-end of our guidance range.
Financial – as at 31 December 2016:

Cash receipts from the MNR amounted to $114.0 million net to GKP (2015: $56.8 million net to GKP).
Revenues up 126% at $194.4 million (FY15: $86.2 million) including $72.6 million in relation to the offset of payables due to the MNR (2015: nil).
Profit/loss from operations before exceptional items of $26.0 million (FY15:$81.7 million).
Loss after tax of $17.4 million (FY15: $214.0 million).
Operating costs per barrel on a gross field basis reduced to $3.5/bbl from $5/bbl in 2015.
As at 31 December 2016, the Group estimates an unrecognised receivable of $25 million (2015: $44 million) net to GKP on a diluted basis with regards to the unpaid export sales and $71 million (2015: $75 million) net to GKP for the past costs associated with the Shaikan Government Participation Option.
Strong liquidity at year end 2016 with unrestricted cash balance of $92.9 million.
Cash balance at 5 April 2017 of $112.7 million against $100 million of debt.
In Q1 2017, the Group received three further payments for 2016 from the MNR of $15 million gross each ($12 million net to GKP).
The Group completed its Balance Sheet Restructuring on 14 October 2016 reducing total debt from over $600 million to $100 million and raised additional cash through a successful $25 million Open Offer.
The Group has decided to pay its upcoming Reinstated Notes coupon of $5 million at 10% interest rate on 18 April 2017.