Kurdistan oiler Gulf Keystone Petroleum Ltd (LON:GKP) told investors it is now preparing to make fresh investments into the Shaikan field, to ‘maintain’ production volume of around 40,000 barrels of oil per day.
Results for the first six months of the year, meanwhile, showed that the field yielded some 36,664 bopd and it said that output for the third quarter to day amounted to 35,350 bopd.
Guidance for the full year is set at a rather broad 32,000 to 38,000 range.
READ: Gulf Keystone on course to meet full-year production guidance
The company told investors that the operational strategy for the new investment has been matured throughout 2017. It highlighted that the timing and execution of the investment strategy has been subject to regulatory approval, a regular payment cycle from the Ministry of Natural Resources and a commercially acceptable investment environment.
The initial investment would aim to bring production to around 40,000 bopd, before further increasing volumes to 55,000 bopd.
In the meantime, the company said it continues to progress talks with the Kurdistan authorities regarding the commercial and contractual conditions for Shaikan – it estimates some US$33mln of unpaid revenue for the field’s past oil production.
READ: Hedge fund reduces Gulf Keystone stake; co receives latest payment from Kurdistan authorities
Earlier this month, Kurdistan neighbour Genel Energy PLC’s (LON:GENL) commercial terms were redrawn with the company waiving due receivables in return for improved terms on future sales.
In today’s results statement, Gulf Keystone chief executive Jón Ferrier said: “The company continues its dialogue with the MNR with the objective of achieving contractual and commercial clarity.
“Whilst continuing to maintain a rigorous and disciplined approach to its cost base, Gulf Keystone remains cash flow positive and well placed to continue to invest in increasing production from Shaikan."
Ferrier, meanwhile, added: “The first half of the year was a period of solid operational delivery, which has seen the Shaikan field continue to perform in line with expectations.”
GKP reported a US$700,000 profit for the six months ended June 30, versus a US$232mln loss in the comparative period of 2016, and said that it remained cash flow positive throughout the first half.
It ended the six months period with US$118.8mln of cash, and that had risen to US$133.8mln by September 18.
In late afternoon trading, Gulf Keystone shares were 2.8%, or 3.5p lower at 121.0p.
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