11th Mar 2019 08:51
LONDON (Alliance News) - Gulf Keystone Petroleum Ltd on Monday said it has renegotiated its oil sale agreement with the Kurdistan Regional Government in Iraq.
Between January 2019 and December 2020, Kurdistan will pay for Gulf Keystone's Shaikan field oil at the monthly average Brent price with a USD21 per barrel discount, having previously paid the same but with a USD22 per barrel discount.
The new agreement will begin once the PF-1 pipeline is completed, scheduled for the middle of 2019. Once operational, Gulf Keystone will not have to truck Shaikan field oil.
The discount, the firm said, accounts for quality as well as transportation costs.
Elsewhere on the operational front, Gulf Keystone said work is continuing on de-bottlenecking at Shaikan, which will allow production to be 50,000 barrels of oil per day by the first quarter of 2020.
Gulf Keystone has finished replacement tubing at the SH-1 workover well, helping increase output by 50% to more than 6,500 barrels a day.
Despite this well being shutdown for the workover, Gulf Keystone added, 2019 production guidance is still maintaining at an average of 32,000 barrels to 38,000 barrels a day.
Gulf Keystone has now demobilised the rig, which will be used by another operator before returning to Shaikan to workover other wells.
Another rig is being prepared ahead of drilling work on the SH-H well later in March.
The sale of Gulf Keystone's Ferkane permit in Algeria has now been approved, the company said, meaning USD10 million of past liabilities can now be released.
Shares were 4.0% higher on Monday at 225.66 pence each.
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