Gulf Keystone Petroleum Ltd. (LON:GKP) confirmed today that it has received a gross payment of US$15mln from the Kurdistan Regional Government (KRG) for crude oil export sales in November 2016 from the Shaikan oil field.
GKP added that it is continuing to work with the KRG's Ministry of Natural Resources towards agreeing the final form of the invoices for May to November 2016.
In a note to clients today, broker Cantor Fitzgerald pointed out that the oil company’s “core focus remains on its flagship Shaikan field where payments for its output have been reintroduced in recent months.”
Analysts at the broker said: “Following a turbulent period of corporate activity last year, GKP has effectively transformed its balance sheet, shedding debt, diluting equity, and divesting assets.
“We note that GKP is now a well-capitalised entity, with sufficient financial resources to grow its production base for sale to the export market.”
But, they added: “The key issue in our view, remains whether a consistent payment mechanism can be established.
“The realised price for export sales lifted in 2016 are estimated as $20/bbl after deductions for trucking costs and pipeline tariff as well as the discount to Brent associated with the quality of the Shaikan crude oil.”
Cantor reiterated a ‘buy’ recommendation and 270p target price on GKP shares which were up 0.25p to 125.25p in late morning trading.