30th Oct 2013 10:28
LONDON (Alliance News) - Gulf Keystone Petroleum Ltd Wednesday said it will launch a USD50 million convertible bond offering to raise funds to enhance its cash position as it moves towards stable production at its Kurdistan oil discovery.
The company has discovered oil at Shaikan in Kurdistan, and has a short-term production target of 40,000 barrels a day from the site. It is already producing oil at the site, but volumes have been fluctuating after a temporary suspension in September. It also has other assets at various stages of appraisal and early development.
However, the AIM-listed oil explorer only had USD72.3 million of cash left as at October 25, and said the new funds will give it funding until at least the middle of 2014.
It said that once it has stable production of more than 20,000 barrels of a oil a day from its assets, it intends to take on long-term debt funding to take it to the next stage of development. It expects that to happen in early 2014.
Its new convertible bond will be consolidated with a USD275 million 6.25% bond it issued in October 2012 that becomes due in October 2017. The terms of the new bond are the same as the previous one. The issue price of the new bond will be finalised after a book-building process.
Gulf keystone shares were up 0.3% at 176 pence Wednesday morning.
By Steve McGrath; [email protected]; @SteveMcGrath1
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