Gulf Keystone reports growth in full-year revenue, production
By Josh White
Date: Thursday 23 Jan 2025
(Sharecast News) - Gulf Keystone Petroleum reported growth in revenue, production and shareholder returns in a full-year update on Thursday, with revenue reaching $151m, a 22% increase from the prior year's $124m.
The company, focussed on the Kurdistan region of Iraq, said its growth was driven by a strong operational performance, including an 86% rise in average gross production to 40,689 barrels of oil per day, compared to 21,891 daily barrels in 2023.
It said it was focussed on maintaining a disciplined approach to capital spending and cost management, with net capital expenditure of $18m, down from $58m in 2023.
That, the board said, was largely allocated to safety upgrades at the PF-1 facility and production optimisation.
Operating costs totaled $52m, with a reduction in the gross operating expense per barrel to $4.4, down from $5.6 in 2023, reflecting higher production volumes.
Gulf Keystone also generated $45m in free cash flow, enabling it to restart shareholder distributions.
That included $35m in dividends and $10m in share buybacks.
The company said it ended the year with a cash balance of $102m, and no debt.
Gulf Keystone noted that it had reported zero lost time incidents (LTIs) for more than two years, and more than 3.4 million working hours since its last LTI.
Looking ahead, the firm said it expected continued strong local market demand in 2025, with production projected between 40,000 and 45,000 barrels of oil per day, depending on various factors such as plant downtime and regional disruptions.
It said it planned to invest between $25m and $30m in net capital expenditure for 2025, including safety upgrades at the PF-2 facility, which would require a temporary shutdown in the fourth quarter of 2025.
The company said it remained committed to returning excess cash to shareholders, with a share buyback programme ongoing and a review of potential interim dividends in March.
Gulf Keystone said it was also continuing to engage with government stakeholders to address the issues preventing the resumption of oil exports through the Iraq-Turkey Pipeline, with hopes of a resolution in the near future.
"Local sales have remained strong since our previous market update in December, with 2025 year to date gross average production of 47,900 barrels of oil per day," said chief executive officer Jon Harris.
"If current demand persists in the local market, our disciplined and flexible work programme, combined with our stable low costs, should enable us to deliver gross average production in the range of 40,000 to 45,000 barrels of oil per day in 2025 and generate material free cash flow, underpinning our ongoing commitment to return excess cash to shareholders.
"At the same time, we continue to proactively engage with government stakeholders to unlock an export restart solution."
At 1136 GMT, shares in Gulf Keystone Petroleum were down 3.27% at 157p.
Reporting by Josh White for Sharecast.com.
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