2nd Dec 2015 12:22
LONDON (Alliance News) - Gulf Keystone Petroleum Ltd Wednesday said it has received a payment from the Kurdistan region of Iraq for the oil it exported out of the country in November, and said it hopes to secure almost USD300.0 million in arrears owed to the company in 2016.
Gulf Keystone is currently aiming to produce between 30,000 to 34,000 barrels of oil equivalent per day from its operations in the region, and receives payment from authorities for exporting some of it out of the country.
However, Gulf Keystone and other regional producers struggled throughout most of 2015 to secure payments they were owed by the government and to set up a formal payment system. In February, Gulf Keystone suspended exporting oil from the country until some progress had been made with the payments, restarting them once some payments were received.
The first payments to be made by the government to foreign oil companies that export oil from the region was back in December 2014, but no payment system was set up causing uncertainty and missed payments.
Change emerged in September however, after the regional government made a multi-million dollar payment to Gulf Keystone for its crude, which was then followed by similar payments in October and November - suggesting a more stable payment system.
Although money from the regional government is beginning to flow, Gulf Keystone has only received a total of USD86.0 million for its crude exports since December 2014.
To put that into perspective, fellow London-listed and Kurdistan producer Genel Energy PLC was also owed around USD400.0 million back in October. Similarly, Genel has also been pushing for a stable payment cycle.
Back in October, the regional government was thought to owe a total of around USD700.0 million to all the foreign companies operating in the region
When those arrears will be cleared by the government and paid to the company is unclear - but on Wednesday Gulf Keystone said the debt would be "considered for payment" by the government in 2016.
Following the most recent payment for November, worth USD12.0 million to Gulf Keystone, the company has a cash balance of USD54.6 million, it said.
The company said the regional government has made numerous public statements this year which should lead to payments continuing in a "regular manner" and for all of the arrears to be potentially paid off in 2016.
Gulf Keystone shares were down 6.3% to 18.50 pence per share on Wednesday whilst Genel shares were up 0.4% to 249.0 pence.
By Joshua Warner; [email protected]; @JoshAlliance
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Related Shares:
Gulf Keystone PetroleumGenel Energy