As chief executive Jón Ferrier was at pains to point out when we interviewed him in January, Gulf Keystone Petroleum (GKP) needs to put its painful recent past behind it. This won't be simple, particularly as many of the company's issues were specific to an often fraught operational backdrop in Iraqi Kurdistan. But full-year results for 2016 were definitively a step in the right direction.
Average production came in at 34,794 barrels of oil a day (bopd), at the top end of guidance and - encouragingly - without the presence of formation water. Since the year-end, this rate has increased by around 3,000bopd, although this is likely to fall to around 32,000bopd without further investment in the Shaikan field beyond routine maintenance costs.
In a departure from form, the company is fully funded for the $58m-$68m (£47m-£55m) cost of stabilising production at 40,000bopd. And while $72.6m of 2016 revenue was actually a receipt deducted against money owed to Kurdistan's government, net payments of $36m so far this year are positive for cash generation.
Cantor Fitzgerald is guiding for statutory pre-tax profit of $27.4m and EPS of 70.6¢ this year, and then $34.8m and 51.2¢ in 2018.
Listen to our podcast interview with Mr Ferrier at http://aca.st/ca1b83
GULF KEYSTONE PETROLEUM (GKP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 119p | MARKET VALUE: | £273m | |
| TOUCH: | 118.5-119p | 12-MONTH HIGH: | 375p | LOW: 107p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 198¢ | NET DEBT: | 1% | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012* | 32.2 | -80.2 | -9.6 | nil |
| 2013* | 6.7 | -31.8 | -3.7 | nil |
| 2014* | 38.6 | -246 | -28.5 | nil |
| 2015^ | 86.2 | -213 | -2284 | nil |
| 2016^ | 194 | -17.3 | -30.8 | nil |
| % change | +126 | - | - | - |
Ex-div:na Payment:na £1=$1.24. *Figures non-adjusted for 2016 20-for-nine open offer and one-for-100 share consolidation. ^EPS based on weighted average number of shares provided in company report. | ||||
