Gulf Keystone, a leading independent operator and producer in the Kurdistan Region of Iraq, has provided an operational and corporate update. The information contained in this announcement has not been audited and may be subject to further review.
Jon Harris, Gulf Keystone’s Chief Executive Officer, said:
'2025 was a strong year for GKP, with production towards the top end of our tightened guidance range. Capex and cost discipline helped deliver material free cash flow generation underpinning $50 million of dividend payments. Kurdistan pipeline exports restarted in September 2025 after over two and half years and regular exports liftings and associated payments, which commenced in Q4 2025, have continued into 2026 following a smooth extension of the interim agreements.
Looking ahead, we expect 2026 to be a pivotal year. Assuming continued consistent exports payments and a return to international prices, we intend to swiftly resume drilling later in the year. This will position us to organically grow production in 2027 as additional volumes from the installation of water handling are also expected to come on stream. We will remain disciplined, coupling incremental capital investments with shareholder distributions to continue delivering value for all stakeholders.'
Operational
- 2025 gross average production of 41,560 bopd, towards upper end of tightened annual guidance range of 40,000 – 42,000 bopd and a 2% increase versus the prior year (2024: 40,689 bopd)
- Resilient performance despite trucking and security related interruptions from June to August accounting for losses of c.1.3 million barrels, or c.3,500 bopd annualised
- Successful transition from trucking sales to pipeline exports via the Iraq-Türkiye Pipeline (“ITP”) on 27 September 2025, with volumes quickly ramped up towards full well capacity
- 2026 year to 20 January gross average production of c.40,600 bopd
- Production expected to ramp up towards 44,000 bopd following the recent restart of a well post jet pump replacement and the completion of ongoing well workovers
- Zero Lost Time Incidents (“LTIs”) for over three years, with c.5.3 million working hours since the last LTI, underlining the Company’s continued commitment to high standards of safety
Financial
- Total cash collected for 2025 crude sales of $122 million (2024 revenue receipts: $144 million)
- $108 million proceeds from local sales during the first nine months of the year, paid in advance
- $14 million proceeds from export sales in September and October 2025 received in December 2025
- Cash received for 2025 exports sales of c.$30/bbl, an increase relative to the average realised price of $28/bbl for 2025 local sales
- In addition to the above, the Company is accruing a receivable for exports sales under the interim agreements to account for the differential between realised prices for cash received to date and the expected reconciliation to international prices
- 2025 capital expenditure and costs in line with annual guidance
- 2025 net capex of $34 million (2024: $18 million), primarily reflecting PF-2 safety upgrades, well workovers and initial expenditure on the installation of water handling facilities at PF-2
- 2025 operating costs of $53 million (2024: $52 million), with gross Opex per barrel of $4.3/bbl (2024: $4.4/bbl), primarily reflecting the slight increase in production
- 2025 other G&A expenses below $10 million (2024: $11 million)
- $50 million returned to shareholders in 2025 through semi-annual dividend payments in April and September
- 2025 year-end cash balance of $78 million (31 December 2024: $102 million) and no debt
- Cash balance as at 21 January 2026 of $88 million which includes recent exports sales payments
Outlook
- Regular liftings and payments for International Oil Companies (“IOC”) crude exports continue following the recent extension of the interim agreements to the end of March 2026
- International independent consultant appointed and progressing its review of IOC invoices and contractual costs, expected to be completed during the extended term of the interim agreements
- A reconciliation to full PSC entitlement at international prices and the negotiation of longer term exports agreements continue to be anticipated following the completion of the review
- The Company continues to advance 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, and will provide an update in due course
- 2026 gross average production guidance of 37,000 to 41,000 bopd
- Reflects planned activity, including the estimated impact of the PF-2 shutdown later in 2026 of c.1,000 bopd annualised, and natural field declines in the absence of drilling
- 2026 net capex guidance of $40-$50 million, reflecting work programme focussed on protecting base production from existing wells, upgrading the safety and reliability of the facilities and installing water handling
- $5-$10 million: Ongoing well workover programme focussed on offsetting field declines
- $25-$30 million: Programme of facilities upgrades at both PF-1 and PF-2 and recurring maintenance
- c.$10 million: Remaining upfront expenditure to install water handling at PF-2, targeting incremental gross production of 4,000 – 8,000 bopd above the anticipated field baseline at the beginning of 2027
- Preparations are underway to restart drilling later in 2026; assuming consistent exports payments and a return to international prices, the Company will proceed swiftly and update capex guidance as required
- The Company expects 2026 net operating costs of $55-$60 million
- Primarily reflects higher local diesel costs following the restart of exports, increased usage of diesel in well artificial lift & exports pumps and facilities maintenance related to the planned PF-2 shutdown
- Expect 2026 other G&A expenses of less than $10 million
- The Company remains committed to returning any potential excess cash to shareholders via semi-annual dividend payments and opportunistic share buybacks
- Gulf Keystone continues to actively consider a potential listing of its shares on the Euronext Growth Oslo, subject to favourable market conditions
Source: Gulf Keystone
