Gulf Keystone, a leading independent operator and producer in the Kurdistan Region of Iraq, today announces its results for the full year ended 31 December 2025.
Jon Harris, Gulf Keystone’s Chief Executive Officer, said:
'We delivered a strong operational and financial performance in 2025 in line with guidance and another year of zero Lost Time Incidents. Free cash flow generation enabled the continued execution of our strategy as we balanced investments in production enhancing projects with $50 million of dividends. Kurdistan pipeline exports restarted in September 2025, representing a significant milestone for the Company and broader industry.
We started 2026 positively, with production increasing above 44,000 bopd towards the end of February and consistent export payments generating cash flow. We have also been making good progress towards a return to international prices, with lower discounts to Brent visible in 2025 export invoices.
Since the outbreak of the regional conflict, we have shut-in the Shaikan Field as a precaution and taken measures to protect staff. We have also suspended 2026 guidance until production restarts. We are hopeful that the security situation will stabilise soon and we are ready to quickly restart production and exports once it is safe to do so. We are in a strong position to navigate the disruptions, with a robust, debt-free balance sheet and significant flexibility to reduce expenditures.
Following careful consideration of these factors and the current outlook, the Board has approved the declaration of a $12.5 million interim dividend. I would like to thank all of GKP’s staff, shareholders and broader stakeholder base for their continued support at this challenging time.'
Highlights to 31 December 2025 and post reporting period
Operational
- Strong operational delivery in 2025:
- Gross average production of 41,560 bopd, up 2% relative to the prior year (2024: 40,689 bopd) and towards the top end of tightened 40,000 – 42,000 bopd guidance range
- Successful transition from trucking sales to pipeline exports via the Iraq-Türkiye Pipeline (“ITP”) on 27 September 2025
- Sanction of water handling facilities at PF-2 to unlock future production growth and reduce reservoir risk
- Safe operations, with zero Lost Time Incidents for over three years despite busy work programme and security disruptions
- Gross average production of c.41,300 bopd in 2026 year to 28 February:
- Gross average production had increased above 44,000 bopd towards the end of February 2026 reflecting the successful completion of well workovers and interventions
- On 28 February 2026, the Shaikan Field was shut in as a safety precaution following the strikes by the US and Israel on Iran and the subsequent retaliatory strikes in the Middle East, including in Kurdistan
- Gross average production of c.32,100 bopd in 2026 year to 17 March, with estimated annualised losses to date from the shut-in of approximately 840 bopd a week
- The Company is ready to restart production and exports quickly with an improvement in the security environment
Shaikan Field estimated reserves
- The Company estimates gross 2P reserves of 416 MMstb as at 31 December 2025 (31 December 2024 internal estimate: 443 MMstb)
- Reduction relative to prior year reflects gross production of 15 MMstb in 2025 and minor revisions of 12 MMstb
Financial
- Strong financial performance, with disciplined investment in production enhancing projects, strict cost control and free cash flow generation underpinning shareholder distributions
- Revenue based on sales invoices, a non-IFRS measure, increased 28% to $193.1 million (2024 revenue: $151.2 million), reflecting the production increase and average realised price of $33.9/bbl (2024: $26.8/bbl)
- Average realised price of $50.5/bbl for 2025 exports sales, a significant improvement on the price achieved from 2025 local sales of $27.6/bbl and representing a $13.4/bbl discount to Dated Brent
- Cash receipts for 2025 exports sales equated to $30/bbl as per the interim exports agreements
- Adjusted EBITDA up 46% to $111.4 million in 2025 (2024: $76.1 million), driven by resilient production, cost control in line with guidance and the sharp increase in realised prices visible in exports sales invoices
- Stable gross Opex per barrel of $4.3/bbl relative to prior year (2024: $4.4/bbl), with 18% reduction in other G&A expenses to $9.3 million (2024: $11.4 million)
- Net capital expenditure of $38.8 million (2024: $18.3 million), in line with guidance and reflecting investment in PF-2 safety upgrades, well workovers and initial expenditure on PF-2 water handling installation
- Free cash flow of $29.1 million (2024: $65.4 million), with the increase in Adjusted EBITDA offset by incremental net capex and a working capital outflow related to 2025 exports sales receivables
- 2025 exports sales receivables reflect the timing difference of around two months between production and payment and the differential between invoiced realised prices and cash receipts of $30/bbl
- The amounts receivable at the year-end related to the timing difference of exports sales have since been collected as expected in 2026
- $50 million returned to shareholders in 2025 through semi-annual dividend payments in April and September
- 2025 year-end cash balance of $78.2 million (31 December 2024: $102.3 million) and no debt
- Cash balance as at 18 March 2026 of $89.1 million reflecting consistent payments for exports sales in the year to date
Dual listing on Euronext Growth Oslo
- On 18 February 2026, the Company’s shares began trading on Euronext Growth Oslo operated by the Oslo Stock Exchange ("OSE")
- Arrangements are being progressed to enable cross-border transfers of the Company’s shares between Euronext Growth Oslo and the London Stock Exchange (“LSE”) on or around 1 April 2026
Outlook
- Considering the deterioration of the regional security environment and the production shut-in, the Company has placed under review its previous 2026 gross average production guidance of 37,000 – 41,000 bopd
- The Company has also suspended its previous 2026 net capex, net operating costs and other G&A expenses guidance (respectively $40-$50 million, $55-$60 million and less than $10 million)
- The Company retains a robust balance sheet and significant flexibility to reduce its work programme and cost base if the production shut-in persists
- The current interim exports agreements, which expire on 31 March 2026, are expected to be extended while a review by an international independent consultant of exports invoices and contractual costs progresses
- On completion of the review, the Company anticipates a reconciliation to full PSC entitlement at international prices, both for future sales and volumes sold under the interim agreements, as well as the negotiation of longer-term exports agreements
- The Company continues to progress its negotiations with the Kurdistan Regional Government (“KRG”) regarding a number of historical Shaikan commercial matters, including the settlement of past oil sales arrears and other KRG-related assets and liabilities
Shareholder distributions
- Gulf Keystone remains committed to distributing excess cash to shareholders according to its established approach to shareholder returns:
- The Board reviews the Company’s capacity to pay a dividend on a semi-annual basis, considering the liquidity needs of the business and the operating environment and
- share buybacks are considered opportunistically throughout the year
- Consistent payments for export sales have continued in 2026 to date, demonstrating the viability of the new export arrangements and generating positive cash flow. However, the recent deterioration in the regional security environment has impacted production and the Shaikan Field remains shut-in as a precautionary measure
- The Board has carefully considered these factors, the current security outlook, the Company’s debt-free balance sheet and ability to reduce capex and costs. Consequently, it has decided to declare an interim dividend of $12.5 million, equivalent to $0.0575 per Common Share
- The dividend will be paid on 27 April 2026, based on a record date of 10 April 2026 and ex-dividend date of 9 April 2026
- The Board intends to review the feasibility of a supplementary dividend payment following a restart of production, exports and payment receipts
Source: Gulf Keystone Petroleum
