9th Apr 2015 06:55
LONDON (Alliance News) - Gulf Keystone Petroleum Ltd Thursday said its pretax loss significantly widened in 2014 as a rise in revenue was offset by a substantial impairment charge and a vast increase in costs as the company continues talking to numerous parties about potential corporate or asset sales.
The oil and gas producer operating in the Kurdistan region of Iraq reported a pretax loss of USD246.1 million for the year ended December 31, 2014, compared to a USD31.8 million loss in 2013.
Despite revenue rising to USD38.6 million from USD6.7 million, a USD144.1 million impairment against the Akri-Bijeel block in Iraq and administrative costs doubling to USD39.0 million from USD15.8 million caused the company's loss to widen.
Revenue rose on the back of production increasing to 6.5 million barrels of oil from only 496,921 barrels a year earlier. Current production stands at around 37,000 barrels of oil per day, and in 2015 the company aims to maintain an average of 36,000 barrels of oil per day but said it aims to reach a stable 40,000 barrels per day during the year.
At the end of December, Gulf Keystone reported a cash balance of USD84.7 million, which excludes the proceeds from recently conducted share placings totalling USD40 million.
The company said it continues to talk to a number of parties about a potential corporate sale or numerous asset transactions.
"We are committed to rebuilding shareholder value. All avenues for doing this are being considered, including expansion plans for Shaikan. As already announced, the company is continuing to engage in discussions with interested parties in relation to possible asset transactions or a sale of the Company, as well as considering additional routes to secure further funding," said Non-Executive Interim Chairman Andrew Simon.
In 2015, the company will look to establish a formal and stable payment cycle from the Kurdistan regional government for its crude oil, but said the company needs to maintain its liquidity in the meantime.
In the longer term, the company is assessing a number of longer-term funding options to progress to the next Shaikan production target of up to 70,000 barrels of oil per day, which also will be sustained by a regular payment cycle in relation to past and future production, it said.
By Joshua Warner; [email protected]; @JoshAlliance
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