Gulf Keystone Petroleum, a leading independent operator and producer in the Kurdistan Region of Iraq, has provided an operational and corporate update ahead of the Company's Annual General Meeting ('AGM'), which will be held today.
Workovers on SH-1 and SH-3 have now been completed, resulting in the anticipated material production uplift at both wells. Production from SH-1 has increased by 105% to 7,800 bopd and SH-3 by 40% to 6,200 bopd.
The SH-12 well (formerly called SH-H) was spudded on 7 June with DQE's Rig 40, signalling the commencement of the Company's drilling campaign; a major milestone for Gulf Keystone.
The next well, forecasted to spud in Q4 2019, will be SH-9 which aims to assess the feasibility of gas reinjection into the Jurassic formation, rather than the originally planned Jurassic production well.
The workovers to install Electric Submersible Pumps ('ESP') will take place in Q4 2019.
As part of the 2019 work-programme, PF-1 was shut down on 10 June for planned maintenance and the installation of equipment required for the 55,000 bopd de-bottlenecking project. The facility is scheduled to be offline for approximately 15-20 days.
The installation of the PF-1 export pipeline infrastructure continues. The pipeline is now installed, and export pumps and the associated controls are currently being fitted. The pipeline is expected to be operational in Q3 2019.
Average gross production of 29,993 barrels of oil per day ('bopd') achieved to date in 2019 with production levels of 38,100 bopd attained prior to the PF-1 shut down.
Full year production guidance remains unchanged, although due to changes in the drilling schedule average gross production in 2019 is currently expected to be at the lower end of the 32,000 - 38,000 bopd guidance.
As a result of the revised timeframe, the 55,000 bopd production target is now expected to be achieved in Q2 2020, as opposed to previous guidance of Q1 2020.
At the request of the Ministry of Natural Resources ("MNR"), GKP and its partner MOL re-submitted a revised Field Development Plan ("FDP") on 23 May 2019 to address additional MNR requests on gas management. The FDP is currently under review by the MNR.
Cash balance of $290 million as at 20 June 2019. The Company remains fully funded for all phases of the Shaikan expansion programme.
As part of the Company's dividend policy, and subject to approval at today's AGM, a $50 million dividend will be paid, comprising an ordinary annual dividend of $25 million and a special dividend of $25 million, to be paid in 2019.
The Company also intends to initiate a share repurchase programme subject to shareholder approval at today's AGM.
Commenting, J?n Ferrier, CEO, said: 'Operational activity has intensified and good progress is being made across all fronts of our Shaikan expansion programme, including investment into the 75,000 bopd expansion and the gas re-injection project. We are pleased to have started the drilling campaign, in addition to seeing promising results with the workovers drilled at SH-1 and SH-3, both of which have increased in output significantly, and all of which serve to achieve our near term production targets. Furthermore, we look forward to bringing our new export pipeline into service later in the year eliminating the need for trucking and reducing HSSE exposure.'