Gulf Keystone Petroleum Prioritizes Liquidity Preservation While Awaiting Reopening of Export Route

Gulf Keystone Petroleum Prioritizes Liquidity Preservation While Awaiting Reopening of Export Route

Gulf Keystone Petroleum Limited (LSE: GKP) has assured its investors that it is committed to maintaining liquidity while holding the belief that the suspension of crude oil exports from Kurdistan will only be temporary.

The suspension of exports from the Shaikan field, which began on March 25, 2023, has led to the accumulation of outstanding receivables totaling US$151 million net for the company.

Despite these challenges, GKP has taken steps to partially resume production from the Shaikan field. This effort has resulted in an increase in the average gross sales volumes to 11,700 barrels of oil per day (bopd) in August. Additionally, local sales commenced in July.

GKP has emphasized that negotiations are ongoing in an attempt to resolve the impasse. Notably, the recent approval of the 2023-2025 Iraqi budget has been seen as a positive step towards establishing a new framework for the production activities of the Kurdistan Regional Government (KRG).

Jon Harris, the Chief Executive of GKP, expressed optimism, stating, “Although an official timeline has not been announced, we maintain our belief that the suspension of Kurdistan crude exports will only be a temporary measure. We anticipate that the KRG will eventually resume payments for oil sales.”

As of August 8, 2023, the company’s cash balance stood at US$80 million.

In trading on the London Stock Exchange, GKP shares demonstrated positive movement, rising by 2.67p or 2.89%, reaching a trading price of 94.92p. This places the valuation of the oil company at slightly over £210 million

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