Gulf Keystone Petroleum makes record profit in first half

Kurdistan-focussed operator and producer Gulf Keystone Petroleum announced its results for the half year ended 30 June on Monday, reporting record profit after tax of $26.7m, up from $0.7m in the same period last year.

The London-listed firm said it managed continued disciplined cost control during the period, with underlying cash operating costs stable at $14.1m, and underlying cash operating costs per barrel of $3.0 per barrel, up from $2.7 a year ago.

It said it had continued to receive regular oil sales payments since 1 September 2015, with cash receipts of $107m net to the company during the half year and $147m net during the eight months to 31 August.

Net cash generated in operating activities was $61.2m, rising from $30.1m, while Gulf Keystone’s cash balance of $219m at 30 June and $240m at 7 September sat well against its $100m debt principal.

Gulf Keystone refinanced its debt in July, with $100m reinstated notes redeemed and replaced by $100m in new notes with a five-year maturity and 10% interest rate.

The company signed its crude oil sales agreement in January, which the board described as a “

“key milestone”.

“It is pleasing to note that over the course of the year a number of key milestones have been achieved, leading to the recommencement of investment into Shaikan and the anticipated growth in production from the field,” said chief executive officer Jón Ferrier.

“The signing, and successful implementation, of the Shaikan crude oil export sales agreement at the start of the year paved the way for the commercial progress that has been achieved, including the investment plans but also regarding the amendment to the Shaikan PSC.”

Ferrier said that once the revised FDP was submitted to the MNR and there was clarity around the PSC, the board was “looking forward” to providing further details to investors, including capital strategy.

“Once again, Shaikan has continued to perform well from an operational perspective, and in line with our strategic priority, this has been achieved whilst maintaining our strong safety track record.

“With a clear path to future growth, underpinned by a healthy balance sheet and an outstanding asset, we can look to the future with confidence.”