Gulf Keystone Petroleum Ltd on Monday said sales were solid in 2024, as the company also unveiled a $10 million share buyback programme, intended to close a perceived discount to its share price.
The oil and gas producer, which operates in the Kurdistan region of Iraq, said that local sales of crude from its Shaikan field have been robust in the year so far.
In the year to May 11, sales averaged around 37,000 barrels per day, peaking monthly at 44,100 barrels in March.
Sales in May have averaged 48,300 barrels per day, following a slowdown in April due to the temporary impact of Eid celebrations on truck availability.
Gulf Keystone said that realised prices have improved to $27 per barrel from $25 per barrel, ‘reflecting continued strong local market demand’.
Subject to sales demand remaining at current levels, Gulf Keystone estimates its gross production potential at between 45,000 and 48,000 barrels per day, following recent optimisations to its well performance.
GKP also announced a new share buyback programme, arguing that its share price represents ‘a significant discount to the intrinsic value of the Shaikan field and does not adequately reflect the near-term free cash flow generation potential from local sales’.
The company will repurchase shares worth up to $10 million.
The programme, which commenced on Monday, is scheduled to run until the earlier of Gulf Keystone’s annual general meeting on June 16 or when the maximum dollar amount has been reached.
Gulf Keystone said it will consider cash dividends and additional share buybacks, depending on the operating environment and its own liquidity position.
Chief Executive Officer Jon Harris said: ‘While we remain focused on retaining sufficient liquidity in the current operating environment and ensuring we are able to unlock significant potential value from the restart of Kurdistan exports, we recognise the importance of distributing excess cash to shareholders.’
Gulf Keystone shares were up 8.1% at 129.44 pence each in London on Monday afternoon.
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