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Gulf Keystone lowers production guidance as focus switches to expansion
Oil and gas explorer Gulf Keystone Petroleum (GKP) shares slid as much as 11% on Monday morning after dropping its production guidance for its current trading year around 5,000 to 6,000 barrels per day.
Average gross production came out at 35,298 barrels of oil per day (bopd) for the calendar year, in the middle of its guidance range of 32,000 to 38,000 bopd for the period.
However, gross production guidance for 2018 was set between 27,000 and 32,000 bopd due to the need to install downhole pumps in several wells as part of its already delayed investment programme.
GKP told advised investors that it intended to make further investments in its wells and operations in 2018, including the hook-up of a short spur pipeline from its second production facility to the Atrush export line, with the group aiming to expand production capacity to 55,000 bopd.
In order to help fund the planned expansion, the Iraq-focussed business had a cash position of $157m as of 19 January.
The firm also announced that chairman Keith Lough had informed the board of his intention to step down from the role he'd held since July 2016.
Jón Ferrier, chief executive officer, said, "Following a further year of strong operational delivery where production guidance has been met, the company is now focused on achieving the commercial framework to significantly increase investment in Kurdistan to step up gross production to 55,000 bopd in the near to medium term, a material step towards development of the full potential of the field and production around 100,000 bopd."
"We are very pleased with the progress made to date on the commercial and operational matters to implement this and look forward to concluding commercial matters in the near future," he added.
As of 0840 GMT, shares had recovered from earlier losses to be down 3.70% to 125.00p.