Gulf Keystone Petroleum Ltd (CHIX:GKPl)

Half Year 2026 Gulf Keystone Petroleum Limited Earnings Call Transcript

Aug 25, 2026 / 09:00 AM GMT

Release Date Price: £1.95 (+6.91%)

Transcript

Key Points

Positve

Gulf Keystone Petroleum Ltd (GUKYF) extended its track record of zero lost time incidents to over three and a half years, demonstrating a strong safety culture.
The company maintained a robust balance sheet and paid a $12.5 million dividend to shareholders despite significant regional disruption and production shut-ins.
Production has successfully restarted and is ramping up quickly, with gross volumes approaching 40,000 barrels of oil per day and a target to return to prior levels of 44,000-45,000 bopd within weeks.
The Shaikan field's discount to Brent narrowed significantly to around $9 a barrel in H1 2026, down from $23-$27 previously, driven by strong demand for the Kurdistan crude blend.
The company is progressing strategic projects, including the installation of water handling facilities at Pier 2, which is on track for Q1 2027 startup and expected to unlock 4,000-8,000 bopd of incremental production.
Adjusted EBITDA increased 26% to $52 million in H1 2026, driven by higher realized prices and lower operating costs, despite lower production volumes.
The company announced an interim semiannual dividend of $10 million for September 2026, reflecting confidence in its cash flow generation and commitment to returning excess cash to shareholders.
The tripartite interim export agreements have been extended for six months to end-January 2027, providing a stable framework for continued exports and payments.
The company is actively seeking to recover an $80 million top-up receivable through additional liftings in September 2026, which could significantly bolster cash flow in H2.
Management is positioning for a return to field development and drilling in 2027, with a draft field development plan targeting a more than doubling of current production from the Jurassic reservoir.

Negative

Production in H1 2026 was severely impacted by two precautionary shut-ins related to the US-Iran conflict, totaling almost five months, with gross average production falling to 14,600 bopd from 44,100 bopd in H1 2025.
The company faces ongoing regional security risks, with the potential for further shut-ins if the security environment deteriorates, as evidenced by the second shut-in in July 2026.
Operating costs per barrel were elevated during the period due to the lower production denominator, and the majority of cost reductions were temporary, related to the shut-in rather than structural efficiencies.
The company has an $80 million top-up receivable on its balance sheet, which remains subject to the implementation of the independent consultants review and is not yet guaranteed to be recovered.
The company has not reinstated CapEx guidance for the remainder of 2026, citing uncertainty around international pricing and cash flow recovery, which may limit near-term investment flexibility.
The draft field development plan's capital expenditure is expected to be higher than the previous estimate of $800-95 million due to additional wells and the gas management program, potentially increasing funding requirements.
The company's license expiry, even with extensions, is shorter than the 27-year reserve life, and management confirmed that extending the license period is not part of the current field development plan.
The company's share price has been impacted this year due to the regional security environment and its prudent response to shutting production, while other peers have benefited from ongoing sales at international prices.
The recovery of historical receivables from 2022-2023 remains part of ongoing discussions with the Ministry of Natural Resources, with no clear timeline for resolution.
The company's ability to achieve full production sharing contract entitlement for export sales at international prices is still subject to ongoing commercial negotiations, which may take time to conclude.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

GKP.L - Gulf Keystone Petroleum Limited
Half Year 2026 Gulf Keystone Petroleum Limited Earnings Call
Aug 25, 2026 / 09:00AM GMT

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Presentation
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Unidentified_1 [1]
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Good morning and welcome to Gulf Keystone Petroleum's 2026 half year results presentation. At the end of today's presentation, there will be an opportunity for Q&A. For participants joining via the conference call, you may ask a question by pressing star one on your telephone keypad. For those listening through the webcast, you can submit a written question at any time by clicking on the control panel at the bottom of your screen and selecting the questions icon to type it in. We will take analyst questions from the conference call first, followed by investor questions from the webcast. I'll now hand over to Chief Executive Officer John Harris. John, please go ahead.

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