Operational & Corporate Update (1699005)

Gulf Keystone Petroleum Ltd (GKP) 
Operational & Corporate Update 
09-Aug-2023 / 07:00 GMT/BST 
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9 August 2023 
 
 
Gulf Keystone Petroleum Ltd. (LSE: GKP) 
("Gulf Keystone", "GKP" or "the Company") 
 
Operational & Corporate Update 
 
 
In advance of the publication of its 2023 Half Year Results on 31 August 2023, Gulf Keystone, a leading independent 
operator and producer in the Kurdistan Region of Iraq ("KRI" or "Kurdistan"), is today providing an update on 
operational and corporate activity. 
 
Jon Harris, Gulf Keystone's Chief Executive Officer, said: 
"While no official timeline has been announced, we continue to believe the suspension of Kurdistan crude exports will 
be temporary and that the KRG will resume oil sales payments in due course. As political negotiations continue, we 
remain focused on what is within our control to preserve and bolster liquidity. We are pleased to have commenced local 
sales in July and partially restarted Shaikan Field production, increasing gross average sales volumes to 11,700 bopd 
in August to date while receiving payments in advance. We are actively pursuing additional local sales opportunities, 
although pricing and volumes remain unpredictable. At the same time, we are continuing to reduce our costs, pursue 
inventory sales and proactively manage our accounts payable. We look forward to providing a further update on progress 
at our half year results later this month." 
 
Following the shut-in of the Iraq-Turkey pipeline on 25 March 2023, exports from the Shaikan Field remain suspended and 
no further oil sales payments have been received from the Kurdistan Regional Government ("KRG") since the payment of 
the September 2022 invoice of USD26.9 million net on 9 March 2023. Outstanding receivables of USD151 million net are owed 
to the Company for the months of October 2022 to March 2023 on the basis of the KBT pricing mechanism. 
 
While no official timeline has been announced, GKP continues to believe that the suspension of exports will be 
temporary and that the KRG will resume payments to GKP and other International Oil Companies ("IOCs") operating in 
Kurdistan in due course. 
 
In particular, the Company notes that: 
 
     -- Discussions between the KRG, the Iraqi Ministry of Oil and Turkish authorities regarding the restart of 
    pipeline operations remain ongoing 
     -- The approval of the 2023-2025 Iraqi budget marks significant progress towards creating a new framework 
    for KRG production that is recognised by Baghdad in return for budget transfers 
      ? While there is the potential for budget transfers to broadly cover the KRG's monthly expenditures, 
        including ongoing IOC receivables, certain aspects to fully implement the budget and determine monthly transfer 
        amounts remain unclear and are the subject of ongoing negotiations between Kurdistan and Iraq 
 
     -- The KRG Prime Minister Masrour Barzani has assured GKP and other IOCs operating in Kurdistan that 
    production sharing contracts will be honoured and outstanding receivables will be repaid 
In the interim, GKP remains focussed on preserving and bolstering its liquidity by exploring opportunities to increase 
local crude sales, further reduce costs, pursue inventory sales and proactively manage accounts payable: 
 
     -- On 19 July 2023, the Company commenced sales to the local market by restarting production and trucking 
    operations from PF-1. Crude sales averaged around 4,900 bopd gross for the period from 19 July to 31 July. Since 
    the beginning of August, volumes have increased, with gross average sales of around 11,700 bopd. Volumes are sold 
    at realised prices in line with the local market, with advance payments received in accordance with production 
    sharing contract entitlements 
     -- The Company is actively pursuing additional opportunities to increase local sales further. While a number 
    of parties have expressed interest in purchasing Shaikan crude oil, the outlook for volumes and pricing remains 
    difficult to predict 
     -- The Company continues to aggressively reduce all costs across the business and remains focused on 
    maintaining net capital expenditures, operating costs and G&A expenses at a monthly run rate of around USD6 million 
    from July 2023, in line with previous guidance. The Company continues to explore options to further reduce costs 
 
     -- The Company's cash balance as at 8 August 2023 was USD80 million with no outstanding debt 
 
 
Enquiries: 
Gulf Keystone:                           [phone] 
Aaron Clark, Head of Investor Relations  [e-mail] 
 
FTI Consulting                           [phone] 
Ben Brewerton 
                                         [e-mail] 
Nick Hennis 

or visit: www.gulfkeystone.com

Notes to Editors:

Gulf Keystone Petroleum Ltd. (LSE: GKP) is a leading independent operator and producer in the Kurdistan Region of Iraq. Further information on Gulf Keystone is available on its website www.gulfkeystone.com

Disclaimer

This announcement contains certain forward-looking statements that are subject to the risks and uncertainties associated with the oil & gas exploration and production business. These statements are made by the Company and its Directors in good faith based on the information available to them up to the time of their approval of this announcement but such statements should be treated with caution due to inherent risks and uncertainties, including both economic and business factors and/or factors beyond the Company's control or within the Company's control where, for example, the Company decides on a change of plan or strategy. This announcement has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. This announcement should not be relied on by any other party or for any other purpose.

----------------------------------------------------------------------------------------------------------------------- Dissemination of a Regulatory Announcement, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.

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ISIN:          BMG4209G2077 
Category Code: MSCM 
TIDM:          GKP 
LEI Code:      213800QTAQOSSTNTPO15 
Sequence No.:  263256 
EQS News ID:   1699005 
 
End of Announcement  EQS News Service 
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August 09, 2023 02:00 ET (06:00 GMT)