Gulf Keystone (LON:GKP) and Genel Energy (LON:GENL) may soon start to get repaid hundreds of millions of dollars owed for oil produced in the Kurdish region of Iraq.
New payment terms announced by Kurdish Regional Government included an element for paying off some of the arrears that have been built.
Rather than flat monthly payments that started in September, in 2016 the KRG said it will move to payments that reflect the revenue derived from each producing field on a netback basis with Brent as a benchmark.
The KRG added it would also make a further payment, equivalent to 5% of the respective monthly netback revenue derived from each field, to towards the recovery of outstanding entitlements.
Barclays said this might mean lower monthly payment levels at current oil prices, but the start of payments to reduce arrears would offset this.
Gulf Keystone (LON:GKP) rose 35% to 16.5p on the news, though Genel was flat at 105p, though broker Barclays said the news was a positive for all of the companies operating in the region.
At end 2015, Genel’s receivable balance was US$400mln.
Payments are to be made monthly within 10 working days of month-end, setting expectations for a first payment under the new structure by 10 February.
Genel has a stake in the Tawke field operated by DNO and is the operator of Taq Taq.
Gulf Keystone has a 75% working interest and is the operator of the Shaikan field.