Gulf Keystone oil field shut-in continues, focuses on cost reduction
Gulf Keystone Petroleum Ltd on Friday said it had ‘responded swiftly’ to disruption of oil production in Iraq, in a statement ahead of its annual general meeting.
The Bermuda-registered oil producer targets the Kurdistan region of Iraq. Its shares traded 1.6% higher at 180.80 pence on Friday morning in London, and are up 12% over the past year.
Gulf Keystone’s Shaikan field remains offline, with operations having come to halt in February, at the outbreak of the US-Israeli war with Iran. The company said it will reinstate 2026 guidance once production has resumed and it has a more detailed picture of the shut-in’s impact.
Chief Executive Jon Harris commented: ‘Despite the recent shut-in of the Shaikan field, we have responded swiftly and decisively to preserve our financial strength while maintaining our readiness to quickly restart production at full capacity. We remain focused on securing the conditions required for a safe resumption of production following the recent encouraging developments in the regional security environment. We also continue to progress towards sustainable exports sales at international prices.’
Gulf Keystone stressed that it ‘has moved swiftly to reduce expenditures, reducing monthly cash burn by almost 50%, while maintaining the ability to quickly restart production at full capacity’.
This has included measures to cut ‘staff costs’, the oil producer noted. It held approximately $66 million in cash as of Thursday, down from $78.2 million at December 31, but maintained that recent reductions in cash had been offset by ongoing recovery of cash receivable for production up until the end of February, with an additional payment currently expected.
‘The company remains ready to restart production and exports immediately once safe to do so. The recent developments in the regional security environment, including the signing of the framework agreement between the US and Iran, have been encouraging,’ Gulf Keystone said on Friday.
It is working with local authorities in preparation for a restart, with an update planned ‘once volumes have ramped up and stabilised’. It also noted progress towards ‘sustainable exports sales at international prices, with constructive discussions ongoing to extend the current exports agreements’.
‘The company continues to discuss a revised Shaikan Field Development Plan with Kurdistan‘s Ministry of Natural Resources which it intends to execute with a return to production and a reconciliation to full [production sharing contract] entitlement at international prices,’ the firm added.
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