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Gulf Keystone sharpening up its act

The Kurdistan-focused oil and gas producer is getting ready for Shaikan expansion
September 11, 2019

Gulf Keystone Petroleum (GKP) said the first half of 2019 was a stepping-stone period for the company, as production and realised price per barrel fell and flattened the Kurdistan oil and gas producer’s operating profit year on year. 

IC TIP: Hold at 239pp

Full-year gross production guidance for the Shaikan field has been cut from 32,000-38,000 barrels of oil per day (bopd) to 30,000-33,000 bopd. The company completed workovers at two wells in the period and drilled its first new well in four years, SH-12. One-off maintenance projects helped add $4m (£3.2m) to the total operating cost for the half at $18m, although the per-barrel figure of $3.9 is at the lower end of guidance.

Chief executive Jón Ferrier said the company was working towards a “significant, phased, production uplift”. The Shaikan expansion beyond 55,000 bopd still needs permission from the Kurdistan Regional Government. The company said it had to revise its gas management plan and resubmit its application, but this had not delayed the plan. 

The company set its investor handout last year at $50m, agreed by a shareholder vote in June and will pay out the remaining $33m on 4 October, on top of a $10m share buyback announced with these results.

Consensus forecasts compiled by Bloomberg put full-year EPS at 28¢ and adjusted cash profits at $137m, climbing to 44¢ and $214m in 2020.

GULF KEYSTONE PETROLEUM (GKP) 
ORD PRICE:239pMARKET VALUE:£536m
TOUCH:238.5-239p12-MONTH HIGH:294p165p
DIVIDEND YIELD:5%PE RATIO:9
NET ASSET VALUE:235¢NET CASH:$198m
Half-year to 30 JuneTurnover ($m)Pre-tax profit ($m)Earnings per share (¢)Dividend per share (¢)
201811626.511.7-
201995.624.2

10.6

14.71*
% change-18-9-9-
Ex-div:19 Sep   
Payment:4 Oct   
£1=$1.23 *Dividend payment of $33m to be paid in October