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Gulf Keystone turns first profit since entering Kurdistan
Gulf Keystone Petroleum has turned its first profit since launching its Kurdistan operations, recording a net profit of $14.1m, but said the outlook remained contingent on a deal being done with local authorities over crude sales.
Gulf Keystone's net profit of $14.1m was a massive swing from a loss of $17.4m in 2016. This led the Bermuda based firm to reaffirm its stance on the Shaikan oil field as it confirmed its intention to restart investments into the project to Iraq's north, subject to an agreement with the Kurdistan regional government over crude oil sales, as more funds were needed in order to reinvigorate the field's operations after output had waned.
Gulf Keystone saw gross production come in at the midway point of its guidance of 32,000 to 38,000 barrels of oil per day at 35,298 bopd for 2017, generating $172m of revenue in the process, down 11.34% from the prior year.
However, the firm highlighted that throughout the first quarter of 2018, the field had yielded a gross production of 31,588 bopd with its guidance for the full year set at 27,000 to 32,000 bopd.
"We are confident that once we are able to restart investment into Shaikan we will be able to lift production towards our near-term target of 55,000 bopd, a step towards the full field development," said chief executive Jón Ferrier.
Gulf Keystone pointed to the fact that the cash component of its reported revenue had increased 28% to $157m in 2017 and noted that its positive cash flow was driven by steady operating activities and payments from the Kurdistan Regional Government.
Gulf Keystone ended the trading year with a cash balance of $160m and had received a further $75m from the Kurdistan regional government. As of 1 April 2018, the group had $100m of debt.
As of 0930 BST, shares had gained 6.53% to 138.91p.