Gulf Keystone, a leading independent operator and producer in the Kurdistan Region of Iraq, has announced its results for the half year ended 30 June 2025.
Jon Harris, Gulf Keystone’s Chief Executive Officer, said:
'We delivered strong operational and financial performance in the first half of 2025, with material free cash flow generated from increased production and realised prices, capital discipline and cost control. Following the temporary shut-in of the Shaikan Field in July related to security concerns, production restarted earlier this month after consultation with the Kurdistan Regional Government and has gradually ramped back up towards full well capacity. Given the return to stable sales and our robust cash balance, we are pleased to announce today the declaration of a $25 million interim dividend, increasing total dividends declared in 2025 to $50 million.
Looking ahead, we have tightened 2025 gross average production guidance to 40,000 - 42,000 bopd primarily reflecting the production losses from recent temporary disruptions. We are excited to have sanctioned the installation of water handling facilities at PF-2 which we expect, once operational, to unlock incremental production above the anticipated field baseline and reduce downside risk to reservoir recovery. We continue to engage with government stakeholders regarding the restart of Kurdistan crude exports, with increasing momentum towards a solution in recent weeks.'
Highlights to 30 June 2025 and post reporting period
Operational
- Zero Lost Time Incidents for over 950 days with rigorous focus on safety maintained
- Gross average production increased 12% to 44,100 bopd in H1 2025 (H1 2024: 39,252 bopd), reflecting consistently robust local market demand and good reservoir performance
- Gross average production of c.40,600 bopd in 2025 year to date (as at 26 August 2025):
- Primarily reflects precautionary field shut-in in July following drone attacks on certain other oil fields in Kurdistan
- Production has gradually returned towards full well capacity after operations were restarted in August following a security assessment and consultation with the Kurdistan Regional Government (“KRG”)
- Realised prices have averaged around $27-$28/bbl in the post reporting period
- Continued execution of disciplined work programme focused on safely maintaining existing production capacity and reliability
- Investment decision taken on installation of water handling facilities at PF-2:
- Commissioning expected at the beginning of 2027
- Once operational, the facilities are expected to unlock an estimated 4,000 - 8,000 bopd of incremental gross production above the anticipated field baseline while reducing reservoir risk
- To minimise upfront capital expenditure and provide flexibility, the facilities will be leased over multiple years following commissioning, with limited incremental net capex expected in 2025
Financial
- Free cash flow generation of $24.6 million in H1 2025 (H1 2024: $26.6 million), enabled by increased production and realised prices, capital discipline and cost control
- Adjusted EBITDA increased 13% to $41.1 million (H1 2024: $36.4 million) as higher production, stronger prices and lower other G&A expenses offset the increase in operating costs and share option expense:
- Revenue increased 17% to $83.1 million (H1 2024: $71.2m) as strong production was bolstered by a 6% increase in the average realised price during the period to $27.8/bbl (H1 2024: $26.3/bbl)
- Gross operating costs per barrel of $4.2/bbl were flat (H1 2024: $4.2/bbl), with the decrease from the 2024 average of $4.4/bbl primarily reflecting higher production
- Net capital expenditure of $18.1 million (H1 2024: $7.8 million) reflecting the Company’s focused work programme of safety critical upgrades at PF-2 and production optimisation expenditures:
- Includes a non-cash charge of $5.4 million associated with the capitalisation of drilling inventory previously classified as held for sale
- Interim dividend of $25 million paid in H1 2025 (H1 2024 shareholder distributions: $21 million)
- Cash balance of $99.0 million as at 30 June 2025 (31 December 2024: $102.3 million), with no outstanding debt; latest balance as at 27 August 2025 of $105.7 million
Outlook
- 2025 gross average production expected to be between 40,000 – 42,000 bopd (previous guidance: 40,000 - 45,000 bopd), reflecting production losses from the recent temporary disruptions:
- Guidance remains subject to local sales demand and a stable security environment
- 2025 net capital expenditure expected to be $30-$35 million (previous guidance: $25-$30 million):
- Unchanged expectation of c.$20 million net capex on PF-2 safety upgrades and maintenance and $5-$10 million on production optimisation initiatives
- Increase in guidance primarily reflects the incremental net capex associated with the water handling project
- Unchanged guidance for operating costs of $50-$55 million and other G&A expenses below $10 million
- The Company is pleased to declare a $25 million interim dividend, equivalent to 11.52 US cents per Common Share based on the Company's total issued share capital as at 27 August 2025:
- The dividend will be paid on 30 September 2025, based on a record date of 12 September 2025 and ex-dividend date of 11 September 2025
- Shareholders will have the option of being paid the dividend in either GBP or USD, with the default currency GBP
- The Company continues to engage with government stakeholders regarding a solution to enable the restart of Kurdistan crude exports through the Iraq-Türkiye Pipeline:
- The Company remains ready to resume oil exports provided satisfactory agreements are reached on payment surety for future oil exports, repayment of outstanding receivables and preservation of current contract economics
Source: Gulf Keystone
