North Iraq-based oil producer Gulf Keystone Petroleum Ltd (LON:GKP) has reported a new company record for revenue in 2018, generating US$250.6mln, up from US$172.4mln in the prior year.
Earnings (EBITDA) came in at US$149.3mln, up from US$104.3mln, and it posted a US$79.9mln net profit, representing a significant step-up from the US$14.1mln it made in 2017.
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It followed the signing of a new oil sales agreement in January 2018. GKP noted that the agreement was renewed in February this year through to 2020, and, as such the company believes it has certainty over payments for the foreseeable future
After investing some US$35.7mln in the Shaikan oil field during the year, the company ended December with a US$295.6mln cash balance.
GKP told investors that it expects to be fully funded for all phases of the Shaikan expansion programme, under its current set of assumptions.
It pledged to pay-out US$25mln per year to shareholders via a new dividend policy, starting in the 2019 financial year which will also include a further US$25mln supplemental dividend.
The US$50mln payment will be voted on at GKP’s AGM, slated to take place in June, and, it expects to pay one-third of the cash shortly thereafter, with the remainder due to follow later in the year following the half-year results.
Operationally, the company confirmed Shaikan’s gross production at the upper end of expectations for the year with the average rate marked at 31,563 barrels of oil per day, though that represented a decline from the 35,298 bopd recorded in the preceding year.
In June, GKP and its partner MOL agreed to restart investment into the Shaikan field in order to grow production up to a target of 55,000 bopd gross by Q1 2020, ahead of a further development up to 110,000 bopd.
“The company is on track to achieve its near-term production target of 55,000 bopd in Q1 2020, and with our partner MOL continues to work towards delivering the staged investment programme,” said Jon Ferrier, GKP chief executive.
“The remarkable Shaikan reservoir presents a straightforward, low-cost onshore development opportunity with unrivalled near-term upside.
Ferrier added: “The new dividend policy represents another major milestone for the company.
“It crystallises returns to shareholders while we preserve the ability to fully fund the Shaikan development and maintain a strong balance sheet; our platform for growth."