Iraq turned off Gulf Keystone oil profits last year
Oil producer Gulf Keystone Petroleum (GKP) has experienced a near 75 per cent revenue collapse since Iraq cut off its main oil export pipeline last year.
According to the firm’s financial results for 2023 published today, the “significant operational transition” of the Iraq-Turkey oil pipeline closure in March last year saw revenue for the 12 months to March 2024 collapse 73 per cent year-on-year to $123.5m.
The firm was able to keep some local operations running throughout the period, with year-to-date gross average sales of c.33,300 barrels of oil per day (bopd) and March-to-date sales of around 43,000 (bopd).
This translated to a loss of $11.5m (£9.05m) after tax against a $266m (£209m) profit the year prior.
Operating costs were down 14 per cent year-on-year to $36.1m (£28.3m) owing to the pipeline closure and the group said it was “more than covering monthly expenditures and have significantly reduced accounts payable”.
The company has remained firm that it will continue its suspended dividend policy to preserve liquidity.
The firm’s share price has fallen 55 per cent fall in the past five years, mostly in the past two and GKP shares are down 95 per cent since their all-time high in 2012.
Following the payment of a $25m (£19.6m) interim dividend in March 2023, the company’s ordinary dividend policy was suspended to preserve liquidity.
Looking ahead, the group said it “expects variable local sales demand in 2024″ but a return to robust market demand in the near term”.
Jon Harris, Gulf Keystone’s chief executive officer, said: “Following a challenging year in 2023, in which our operational and financial performance was impacted by the suspension of Kurdistan exports and delays to KRG payments, we successfully adapted to the new local sales environment.
“We are more than covering our monthly expenditures and have significantly reduced accounts payable, with all invoices now current.
“Free cash flow from current robust local sales demand is being used to further improve our liquidity position.
“Looking ahead, we remain resilient with upside potential from the restart of exports and normalisation of payments and while there is no defined timeline, we continue to actively engage with government stakeholders to secure a solution to unlock significant value for all stakeholders.”