24th Mar 2020 12:45
(Alliance News) - Gulf Keystone Petroleum PLC on Tuesday suspended guidance for 2020 after calling a halt to expansion work amid Covid-19.
Last week, Gulf Keystone said construction work related to expanding production capacity at the Shaikan field in Iraqi Kurdistan was halted due to Covid-19.
Production is continuing as normal, the firm said, at 38,000 barrels of oil per day. The firm was looking to increase output to 55,000 barrels a day by the third quarter of 2020.
However, it has now removed this guidance and has also withdrawn guidance of overall 2020 average production of between 43,000 barrels and 48,000 barrels a day.
Gulf Keystone is to unveil a revised field development plan later this year, it added.
"In these challenging times, we remain focused on the safety of our people and have adapted our operations to ensure their continued welfare. With the associated economic backdrop compounded by a delay in payments, we are taking a prudent approach to running our business with a sharp focus on financial discipline and maintaining liquidity," said Chief Executive Jon Ferrier.
"While we were on track to deliver the expansion to 55,000 barrels per day in third-quarter 2020, flexibility is the order of the day and as such, beyond our existing commitments, we have suspended further expansion activity until conditions improve."
"Underpinning the company's strong investment case is the quality and scale of the Shaikan field, which continues to perform well with current production of around 38,000 barrels a day."
"Given our strong balance sheet with cash of USD154 million at March 23, no debt repayment until mid-2023, limited capital expenditure commitments and a low-cost structure, we are highly confident in our future ability to capture the significant value in Shaikan, for the benefit of all stakeholders," Ferrier continued.
Shares were 6.6% higher on Tuesday afternoon in London at 66.97 each.
By George Collard; [email protected]
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