Shares in punters’ favourite Gulf Keystone Petroleum (LON:GKP) were marked higher early on after the Kurdistan-focused oiler weighed in with a better than expected set of full-year results.
After 12 months during which it sealed a transformational but painful debt restructuring, the company was able to demonstrate progress both financially and operationally.
WATCH: Gulf Keystone seem to "have turned a corner", says analyst ...
Revenues more than doubled to US$194.4mln, while underlying profits were US$26mln – although it did make a loss after tax.
That said, the numbers were ahead of consensus forecasts.
Revenues up strongly
GKP, which owns the Shaikan heavy oil field, received US$114mln from the regional government, up from US$56.8mln a year earlier.
After the fundamental balance sheet re-draft last October, which went to the wire, the company’s total debt has fallen to US$100mln from a crippling and life-threatening US$600mln.
A placing and open offer brought in US$25mln that will some operational flexibility.
Its average production rate from Shaikan was almost 35,000 barrels a day – at the upper end of guidance – and is currently at 38,000 bopd. Lifting costs fell to just US$3.50 a barrel from US$5.
At 8.15am, the shares were changing hands for 120.25p, representing a rise of 2%. Cantor Fiztgerald’s Sam Wahab reckons the stock is worth 270p.
Solid progression
The analyst said: “[The] results demonstrated clear evidence of solid progression across the business following a period of corporate and operational restructuring.
“2016 was a turbulent period for Gulf Keystone on a corporate level; however the company exited the year with a transformed balance sheet, with a much lower debt burden, diluted equity, and a streamlined portfolio.
“The company’s core focus remains on its flagship Shaikan field where payments have been fairly consistence in recent months.
“We believe that Gulf Keystone is now a well-capitalised entity, with sufficient financial resources to grow its production base for sale to the export market.”