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Gulf Keystone Petroleum Limited confirms receipt of $15mln oil payment

The $15mln payment covers oil exported in January, as well as some past arrears.
Gulf Keystone Petroleum Limited confirms receipt of $15mln oil payment
Gulf Keystone said its cash position was $56mln.

Gulf Keystone Petroleum Limited (LON:GKP) has confirmed it has received a $15mln gross payment from the Kurdistan Regional Government for crude produced at the Shaikan field.

The oil company will receive around $12mln net.

Last month, on February 19, the company flagged that the KRG had authorised the payment.

It comprises $5.8mln is for oil exported in January, and $9.2mln of payments towards the recovery of arrears.

Following the KRG payment, Gulf Keystone said its cash position was $56mln.

Sam Wahab, analyst at Cantor Fitzgerald, repeated a ‘buy’ recommendation and a 48p price target following the KRG payment.

“This follows regular payments in 4Q/2015, but is the first of 2016,” he said in a note.

“We also note that the KRG is now addressing the arrears it has built up to domestic operators, and whilst today’s announcement is only a small payment in this respect to GKP, it signals the government’s intent this year.”

Elsewhere, broker SP Angel said: “We believe that GKP's current valuation is undemanding in relation to its asset size, which is exacerbated by the fact that the risks associated with development in Kurdistan, which although elevated, isn't as high as the market believes.

“While there are short term risks, GKP gains increasing favour the longer our time horizon becomes.”

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