Gulf Keystone Petroleum Ltd said its board approved a US$50mln special dividend and announced that the Kurdistan regional government has now settled outstanding invoices from November 2019 to February 2020, lifting the group’s shares up as much as 10%.
“Assuming timely payment of invoices and strong oil prices, we expect continuing strong cash flow generation in 2022, providing flexibility to consider further shareholder distributions, optimisation of the capital structure and a potential increase in capital expenditure with progress on the FDP [Field Development Plan]," said chief executive Jon Harris.
In a separate statement, the company confirmed that a gross payment of US$55.8mln (US$43.7mln net to Gulf Keystone) was received from the Kurdistan regional government. In May 2021, the goverment announced changes to the repayment schedule for monies owed for past oil sales.
The payment announced today comprised a gross US$45.1mln (US$35.3mln net to Gulf Keystone) for Shaikan crude oil sales during February 2022 and a gross US$10.7mln (US$8.4mln net to Gulf Keystone) relating to an outstanding February 2020 invoice.
“The arrears related to the November 2019 to February 2020 invoices have now been fully recovered,” said Gulf Keystone.
As at May 24 2022, the company had a cash balance of US$218.0mln, including the recently received February 2022 invoice payment.
In January, Gulf Keystone announced plans to pay the US$50mln special dividend. The payment brings total dividends requiring shareholder approval at a 24 June annual general meeting to US$75mln and increases the total dividends declared in 2022 to US$190mln.
Shares in the company rose as much as 10% and were up 9.1% at 294.5p in early trading.