25th Aug 2026 11:50
(Alliance News) - Gulf Keystone Petroleum Ltd on Thursday reported a swing to half-year profit, hailing "swift action" to reduce costs.
Shares in the oil producer focused on the Kurdistan region of Iraq were up 7.5% at 197.20 pence on Thursday morning in London. For the year, GKP shares are up 9.4%.
The firm swung to a pretax profit of USD13.0 million in the six months to June 30, from a loss of USD7.5 million a year earlier. Revenue, however, fell 31% to USD57.8 million from USD83.1 million.
Cost of sales shrunk 42% to USD41.2 million from USD71.2 million a year prior, supporting the swing to profit.
When including the recovery of USD25.0 million worth of past receivables, revenue for the half-year amounted to USD82.8 million.
"The company's net entitlement in H1 2026 reflected the continued effective recovery of USD25.0 million of cost oil owed to GKP from the 2022-2023 receivable balance, reducing the overall receivable balance to USD97.8 million net to GKP (comprising USD67.1 million cost oil and USD30.7 million profit oil net to GKP post CBP) as at 30 June 2026," GKP said.
The average realised crude price nearly trebled to USD83.5 per barrel from USD27.8, supporting revenue. The discount to the benchmark dated Brent measure narrowed to USD8.8 a barrel from USD44.1 a year prior.
It partly put the narrower discount down to "higher demand for the Kirkuk blend", a crude produced in the Kurdistan region.
The higher realised price helped offset the impact of the temporary shut-in of the Shaikan field amid "significant regional disruption".
As a result, gross average production fell 67% to 14,600 barrels of oil per day from 44,100 barrels per day a year earlier.
Gulf Keystone said it has since restarted production and exports and is focused on completing the ramp-up, with gross production volumes nearing 40,000 barrels per day.
Gulf Keystone declared an interim dividend of 4.60 cents per share, down 60% from 11.52 cents a year earlier.
"Gulf Keystone delivered a resilient financial performance in the first half of 2026. Swift action to reduce capital expenditures and costs following the production shut-in enabled us to minimise the free cash outflow in the period, maintain a robust balance sheet and pay a semi-annual dividend of USD12.5 million to shareholders in April 2026. With the recent restart of production and progress towards achieving full PSC entitlement for export sales at international prices, the board has decided to declare a semi-annual dividend of USD10 million for payment in September 2026 as we also firm up plans for investment in profitable growth," Gulf Keystone said.
Chief Executive Officer Jon Harris added: "Looking ahead to the remainder of the year, our focus is on maintaining stable production and exports, progressing the PF-2 water handling project and securing full PSC entitlement for past and present export sales at international prices. The latter would bolster cash flow generation, supporting our decision today to announce a semi-annual dividend of USD10 million, and provide the foundations for a return to production growth in 2027."
Gulf Keystone said it was reticent to provide long-term guidance on the discount to dated Brent, given the limited number of cargo liftings to date and recent regional volatility.
By Niall Holden, Alliance News reporter
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