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Gulf Keystone boss boasts of ‘key milestone achievements’ as first half profits rise

An investment programme aimed at reinvigorating the Shaikan field was signed off in the first half
oil and gas operations
Shaikan production averaged 31,861 bopd

Gulf Keystone Petroleum Limited (LON:GKP) chief executive Jón Ferrier highlighted "a number of key milestones" had been achieved during its first half, as the Iraq oil firm released interim results.

Importantly, in June, the company gave a long-awaited green-light to an investment programme intended to reinvigorate production from the Shaikan field. The programme is intended to lift Shaikan’s output to a target rate of 55,000 barrels of oil per day during the second half of 2019. First, the Shaikan partners are reworking a new field development plan, which is due to be resubmitted later this year.

For the first half, meanwhile, the field produced an average of 31,861 bopd (in the two subsequent months it similarly averaged 31,399 bopd) and the company repeated full-year guidance for 27,000 to 32,000 bopd.

READ: Gulf Keystone Petroleum "back in investment mode"

Ferrier, meanwhile, commented on a new crude sales deal (another corporate milestone in the period).

“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.

“Once the revised FDP is submitted to the MNR and there is clarity around the PSC, we look 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."

In terms of financials, GKP reported a US$26.7mln profit, up substantially from a US$700,000 profit reported in the same period of 2017, thanks to US$116.2mln of revenue in the first half, up from US$78.3mln last year.

GKP highlighted that it has received regular oil sales payments since 1 September 2015, and, in the first half of 2018 it received US$107mln of cash (together it banked US$147mln in the first eight months).

It generated US$61.2mln of net cash from operating activities in the first six months, up from US$30mln. At June 30, the company had US$219mln of cash and equivalents.

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