Gulf Keystone narrows loss

Kurdistan Region of Iraq operator Gulf Keystone posted its full-year 2016 results on Thursday, announcing a loss after tax 92% smaller than the previous year.

The company recorded a USD 17.4-million loss last year, a marked improvement over the USD 214 million in losses in 2015. Revenues were up as well, increasing by 126% to USD 194.4 million.

In 2016, Gulf Keystone produced 34,794 bopd, a 14% rise over 2015. Output from the Shaikan field averaged 36,293 during the first quarter of 2017, with the production guidance for the year set at between 32,000 and 38,000 bopd.

As of April 2017, the company’s 2P reserves are 615 million barrels of oil. At the end of June 2016, contingent resources were estimated at 239 million barrels.

The company was forced into a restructuring campaign in 2016, which resulted in a reduction in debt from USD 600 million to USD 100 million.

“The balance sheet restructuring was essential in safeguarding the future of the Company. It was not a process that was entered into lightly, but the dearth of global merger and acquisition activity and general market uncertainty left us with no better option than to proceed with a full capital restructuring,” Chairman Keith Lough said in a press release.

CEO Jón Ferrier reported on ongoing talks with the Ministry of Natural Resources on “commercial and contractual conditions,” which he said could be finalised around June. This should enable the company to invest in efforts to raise output to 40,000 bopd.

“Shaikan’s mid-term production potential is 110,000 bopd based on our published CPRs, and work continues to optimise the full field development plan, but 55,000 bopd, established with additional electric submersible pumps and a new drill well remains the near-term target,” Ferrier added.