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Highlights

  • GKP reported an 11% revenue decline for H1 2024
  • Average realized price fell 49%, impacting revenue despite increased production levels
  • Adjusted EBITDA rose 6.4% due to strong local sales and cost reductions
  • Total capex for 2024 is expected to reach USD 20 million

Gulf Keystone Petroleum Limited (LSE: GKP) is a company listed on the FTSE Main Market. It focuses on oil and gas exploration and production. The company operates mainly in the Kurdistan Region of Iraq, with additional activities in the United Kingdom.

Gulf Keystone Petroleum (GKP) reported a revenue decline of 11% for H1 2024, totalling USD 71.2 million, down from USD 79.6 million in H1 2023. This decrease occurred despite an increase in production levels. The primary factor contributing to this revenue drop was a significant 49% decline in the average realized price, which fell to USD 26.3 per barrel from USD 51.3 per barrel in the previous year.

Despite the revenue challenges, GKP experienced a 6.4% rise in adjusted EBITDA. This growth was bolstered by strong local sales volumes and effective cost reductions, which helped mitigate the effects of the lower realized prices.

Recent Business Update

As per an announcement dated August 29, 2024, GKP has returned a total of USD 25 million to shareholders this year. This includes a USD 10 million in share buyback, which began in May and concluded in July, and a USD 15 million interim dividend paid in July.

The company reported a cash balance of USD 102.3 million as of June 30, 2024, an increase from USD 81.7 million on December 31, 2023. The latest cash balance stood at USD 98.2 million as of August 28, 2024.

Company Outlook

The company anticipates robust local sales demand in the short term, although the long-term outlook remains uncertain. The Shaikan Field is currently operating close to its maximum capacity, and safety upgrades are planned for November 2024, which will necessitate a three-week shutdown of PF-1, affecting production by approximately 26,000 bopd.

Monthly net spending for 2024 is expected to be USD 7 million, with capital expenditures aimed at optimizing production and enhancing safety, especially in the latter half of the year. Total capex for 2024 is expected to reach USD 20 million.

Top 10 Shareholders

The top 10 shareholders together account for approximately 46.52% of the total shares. Lansdowne Partners Austria GMBH holds the largest stake at around 15.00%, followed by Stichting Value Partners with about 11.40%, as shown in the chart below:

Price Information

The stock has seen an increase of approximately 14.34% over the past three months and a rise of about 10.06% over the last nine months. Its 52-week low is GBX 84.10, while the high is GBX 155.94, and it is currently trading below the average of these two values.

Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference data for all price data, currency, technical indicators, support, and resistance levels is 17 September 2024. The reference data in this report has been partly sourced from EODHD/Others.