ShaMaran Petroleum and Gulf Keystone Petroleum have signed a Bermuda merger agreement and a combination agreement to combine their businesses. PDF Version.
The Transaction will be structured as a statutory merger under corporate law in Bermuda, where both companies are incorporated, whereby ShaMaran and Gulf Keystone will merge, with Gulf Keystone as the surviving legal entity. Completion of the Transaction is subject to customary closing conditions.
The merged company resulting from the Transaction is hereinafter referred to as the 'Combined Company'.
Strategic rationale
- The Transaction will create a leading independent oil producer focused on the Kurdistan Region of Iraq and Federal Iraq.
- The Transaction creates scale and diversification across four world-class fields with combined estimated working interest ('WI') 2P reserves of 323 MMbbl(1,2) and additional reserve and resource upside from ShaMaran’s recently announced investment in the Hamrin field.
- Pro-forma WI production of 53 kbopd(1,3), ranking in the top 10 of Europe’s listed independents(4).
- Highly complementary portfolio of four low-cost, long-life assets creating an enhanced platform for cash flow generation, shareholder distributions and growth both in the near- and medium-term, with plans to formalise the Combined Company’s distributions policy around completion of the Transaction.
- ShaMaran assets operated by strategic partner HKN Energy, a proven Kurdistan operator with a strong track-record and operational approach that aligns well with Gulf Keystone’s strategy.
- Pro-forma > USD 1 billion market cap company, with improved liquidity and access to financing.
- Intention to uplist Gulf Keystone’s shares to the Euronext Oslo Børs main market and in due course discontinue their London Stock Exchange listing to provide a single liquid listing for shareholders. Listing of the ShaMaran shares and ShaMaran’s SDRs will cease in connection with the completion of the Transaction.
- The Transaction is supported by the largest shareholder of each company. The Lundin family, through Nemesia S.à r.l. (the “Lundin Family”), holds approximately 25.6% of ShaMaran. Lansdowne Partners Austria GmbH (“Lansdowne Partners”) manages shareholdings representing approximately 13% of Gulf Keystone’s issued and outstanding shares. Each has indicated that, as at the date of this announcement, it intends to vote in favour of the Transaction. The Lundin Family will become the largest shareholder in the Combined Company and will be represented by William Lundin as the proposed Non-Executive Chair.
The Board of Directors of both Gulf Keystone and ShaMaran have unanimously approved the proposed Transaction and consider it to be in the best interests of each company and their respective shareholders.
David Thomas, Non-Executive Chair of Gulf Keystone, comments:
'The merger creates a stronger company with greater scale, a highly complementary portfolio and a stronger cash flow profile. Expected near-term cash flow from ShaMaran’s assets complements the long-term growth potential of the Combined Company, enhancing our ability to invest in growth while delivering attractive and sustainable shareholder distributions. Together, we are better positioned to navigate the regional environment and to lead the next phase of value-creation as a leading independent oil producer focused on Kurdistan and Federal Iraq. The addition of Hamrin adds considerable further growth potential complementing the existing developed Kurdistan fields.'
Jon Harris, CEO and Executive Director of Gulf Keystone, adds:
'We view this combination as a natural next step for both companies. Bringing together Shaikan with the adjacent Atrush and Sarsang fields will deliver synergies and gives the enlarged company a significantly stronger platform to invest in the future development of Shaikan and Hamrin. We also look forward to working with HKN Energy as an experienced operator and partner on ShaMaran’s assets.'
Chris Bruijnzeels, Non-Executive Chair of ShaMaran, and proposed Non-Executive Director of Gulf Keystone following completion of the Transaction, comments:
'The Gulf Keystone merger is the logical continuation of the Kurdistan consolidation story, especially given the physical proximity of our assets. The ShaMaran board has been supportive of building a larger, more efficient vehicle for some time, and we expect there will be additional opportunities for growth open to the combined company, both in Kurdistan and Federal Iraq. A larger operator will deliver superior value for both Gulf Keystone and ShaMaran shareholders.'
Garrett Soden, CEO of ShaMaran and proposed Non-Executive Director of Gulf Keystone following completion of the Transaction, adds:
'ShaMaran today announced expanding into Federal Iraq with HKN Energy in the Hamrin field to create a diversified asset portfolio with an attractive production, reserves and cash flow profile. The Gulf Keystone merger amplifies that vision and is supported by the largest shareholders of both companies. We look forward to joining forces with Gulf Keystone, streamlining the combined business and building a platform for growth in Kurdistan and Federal Iraq that is backed by the Lundin Family and listed on the Oslo Stock Exchange.'
Key terms of the Transaction
Based on a Gulf Keystone share price as of close 19 October 2026 of GBp 225 (equivalent to NOK 28.18 per share using a GBP/NOK exchange rate of 12.5226 as of 19 October 2026), the Exchange Ratio of 0.07533958 newly issued Gulf Keystone shares for each share held in ShaMaran and the 2,887,504,313 currently outstanding ShaMaran Shares (settlement of long-term incentive plans of ShaMaran will be in cash), the equity value of ShaMaran in the Transaction is NOK 5.7 billion (equivalent to USD 601 million using a NOK/USD exchange rate of 9.4113 as of 19 October 2026), corresponding to a price per share of NOK 1.96.
The merger consideration to ShaMaran shareholders represents a premium of 22.9% to the ShaMaran closing share price as of close 19 October 2026, and a premium of 28.6% and 32.2% based on 30 and 90 trading days’ VWAP as of 19 October 2026, respectively (based on ShaMaran SDRs trading on Nasdaq First North Growth Market Stockholm). The share price of ShaMaran on 19 October 2026 does not reflect the investment in the Hamrin Field, which is announced today.
Adjusted for the special dividend of USD 50 million that Gulf Keystone intends to pay to its existing shareholders on closing of the Transaction, equivalent to USD 0.23 per share, the consideration to ShaMaran shareholders represents a premium of 13.5% to the ShaMaran closing share price as of close 19 October 2026, and a premium of 17.5% and 20.1% based on 30 and 90 trading days’ VWAP as of 19 October 2026, respectively (based on ShaMaran SDRs trading on Nasdaq First North Growth Market Stockholm).
Following completion of the Transaction, shareholders of Gulf Keystone and shareholders of ShaMaran will each own 50% of the shares in the Combined Company.
The number of shares issued to ShaMaran shareholders as part of the merger consideration will be based on the number of ShaMaran Shares outstanding at the time of completion of the Transaction, excluding any shares held in treasury. Under the assumption that the number of shares outstanding at completion of the Transaction is the same as at the date of this announcement, the aggregate number of newly issued ordinary shares in Gulf Keystone will be 217,543,362. On this basis, the total number of shares in the Combined Company following completion of the Transaction will be 435,086,735.
No fractional Gulf Keystone shares shall be delivered as merger consideration and the number of Gulf Keystone shares to be issued and delivered in accordance with the Transaction shall be rounded down to the nearest whole share. Any excess Gulf Keystone shares not allotted as a result of rounding shall be issued to and sold by a third party appointed by GKP, with the net proceeds distributed proportionately among the affected holders of ShaMaran Shares or ShaMaran SDRs.
Investor and analyst presentation regarding Gulf Keystone combination with ShaMaran Petroleum
Gulf Keystone is hosting a presentation for investors and analysts at 10:00 BST / 11:00 CEST today regarding the agreed combination of Gulf Keystone with ShaMaran Petroleum.
Sell-side analysts are requested to join the meeting via the dial-in details provided to them separately and ask questions verbally. Investors are encouraged to submit written questions via the webcast.
Link to webcast: https://brrmedia.news/GKPSNM2026
Further information, including the investor presentation and a replay of the conference call, will be provided on www.gulfkeystone.com.
Click here for full announcement
Source: ShaMaran
