9 April 2015
Gulf Keystone Petroleum Ltd. (LSE: GKP)
("Gulf Keystone" or "the Company")
2014 Results Announcement
Gulf Keystone, an independent oil and gas exploration and production company with operations in the Kurdistan Region of Iraq, today announces its results for the year ended 31 December 2014.
HIGHLIGHTS
Operational
· 2014 gross production of 6,484,391 barrels of oil (2013: 496,921 barrels of oil) with significant growth expected in 2015
· Gulf Keystone's operations in the Kurdistan Region remained secure with production operations and crude oil export deliveries from the Shaikan field uninterrupted throughout 2014
· The first production milestone of 40,000 barrels of oil per day ("bopd") reached in December 2014 following a gradual ramp-up during the year
· Current production in excess of 37,000 bopd is being delivered against the pre-payment of US$ 26 million gross (US$20.8 million net to Gulf Keystone) received for Shaikan crude oil sales on 25 February 2015, with further payments of a similar nature anticipated
Financial - as at 31 December 2014
· Revenues of US$38.6 million achieved (FY13: US$6.7 million); additional revenue in the region of US$100 million owed but not yet recognised for crude oil export sales
· Loss after tax of US$248.2 million (FY13: US$32.0 million)
· Net proceeds of US$240 million raised from the issue of debt securities and associated warrants in April 2014
Financial - post period end
· US$26 million gross (US$20.8 million net) received as pre-payment for Shaikan crude oil sales in February 2015
· Successful placing of 85.9 million shares on 31 March 2015, raising gross proceeds for the Company of US$40 million
· Discussions ongoing with a number of parties in relation to possible asset transactions or corporate sale
· Book Equity Ratio Put Option successfully removed from the Trust Deed and Conditions of the US$250 million 13.0 per cent Guaranteed Notes due 2017 at the noteholder meeting on 7 April 2015
· Cash balance at 8 April 2015 of US$84.7 million (31 Dec 2014: US$87.8 million) excluding recent share placing proceeds
Outlook
· Establish a regular payment cycle for past and future Shaikan crude oil export sales
· Finalise and implement a pipeline access solution for the Shaikan crude
· Achieve stable Shaikan production rates of 40,000 bopd aiming to maintain a daily average of 36,000 bopd throughout 2015
· Manage expenditure in a responsible and prudent manner, continuing to review and control capital commitments
· Make decisions on investment in additional production facilities, development wells and infrastructure required to increase Shaikan production in line with the approved Shaikan Field Development Plan
· Make a decision regarding early production and development of the Sheikh Adi discovery
Commenting on the Full Year results, Andrew Simon, Interim Non-Executive Chairman, said:
"2014 was a pivotal year for Gulf Keystone as we completed the critical transition from explorer to producer. We started the year with our first crude oil export sales and ended the year by achieving our objective of producing 40,000 barrels of oil per day from the Shaikan field, our flagship asset in the Kurdistan Region of Iraq. This was a significant achievement for an independent E&P company in a country in the midst of a conflict.
We are committed to rebuilding shareholder value. All avenues for doing this are being considered, including expansion plans for Shaikan. As already announced, the Company is continuing to engage in discussions with interested parties in relation to possible asset transactions or a sale of the Company, as well as considering additional routes to secure further funding."
John Gerstenlauer, CEO, said:
"Hitting an important production milestone and achievin
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