To say that political risk has shaped the investment narrative at Gulf Keystone Petroleum (GKP) would be a gross understatement. In a largely favourable half-year update, the driller, whose operations are centred in Iraqi Kurdistan, said that it is gearing up to make new investments into the Shaikan field in order to to maintain production volumes at around 40,000 barrels of oil per day (bopd), before ratcheting up to a planned 55,000 bopd, subject to local approvals. The field has given up 36,664 bopd through to the half-year, but with production faltering in the third quarter, full-year guidance has been maintained at 32,000-38,000 bopd; the wide spread a pointer to the erratic operating environment.
The ability to set a course for the future has been aided by back payments from Iraqi Kurdistan's Ministry of Natural Resources (MNR), netting $84m (£62m) in the year to date. However, recent delays in negotiation exacerbate a “lack of commercial visibility” and discussions continue with regard to the establishment of predictable payments under the production sharing contract. There’s also around $109m that Gulf Keystone estimates it’s owed by the MNR in unpaid export sales and development costs at Shaikan.
| GULF KEYSTONE PETROLEUM (GKP) | ||||
| ORD PRICE: | 121p | MARKET VALUE: | £278m | |
| TOUCH: | 120-121p | 12-MONTH HIGH: | 250p | LOW: 89p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 199¢ | NET DEBT: | $2m | |
| Half-year to | Turnover | Pre-tax | Earnings per | Dividend |
| 30 Jun | ($m) | profit ($m) | share (¢) | per share (¢) |
| 2016 | 102 | -232 | -2,414 | nil |
| 2017 | 78.3 | 0.6 | 0.29 | nil |
| % change | -23 | - | - | - |
| Ex-div: | - | |||
| Payment: | - | |||
| £1 = $1.35 | ||||
