Gulf Keystone Petroleum Limited (LSE:GKP) told investors it has continued to drive significant cash flow generation from the Shaikan field, its flagship asset which is located in the Kurdistan region of Northern Iraq.
The company, in a statement ahead of today’s AGM, said cash flow generation amounted to US$348.8mln in 2022 to date, paid via the Kurdistan Regional Government (KRG), including both oil sales and revenue arrears.
All past outstanding balances have now been paid by the KRG, GKP noted, and now in turn the company is taking steps to boost its financial arrangements.
It said it intends to call its remaining US$100mln bonds, which will leave the company debt free.
Significantly, today’s AGM will include a vote to approve part of the company’s proposed US$190mln dividend (with US$75mln subject to the AGM vote).
GKP highlighted that production in the year to date has averaged 44,900 barrels of oil per day and, as it prudently manages well performance to avoid flowing water, it said it is now "tightening" its guidance for 2022 to 44,000 to 47,000 barrels of oil per day.
“The installation of water handling facilities will unlock upside production potential and we continue to explore acceleration options in a supply constrained market,” chief executive Jon Harris said.
“In the near-term, we continue to progress our well workover and intervention programme to optimise production.”
The company also noted that it continues to work towards further field development, with its field development plan (FDP) presently awaiting a greenlight.
“While timing of approval remains uncertain, we also continue to make positive progress on the FDP as we prepare to resume drilling and ramp up production,” Harris added.
Alongside its production guidance for 2022, the company noted that its forecast of gross operating costs remain unchanged at US$2.90 to US$3.30 per barrel and similarly its anticipated capital spending of US$85mln to US$95mln.