Gulf Keystone Petroleum Limited · LSE:GKP

Gulf Keystone Petroleum — Investor Presentation (March 2018)

19 slides from Gulf Keystone Petroleum's investor presentation, Mar 16, 2018

  1. Slide 1: Gulf Keystone Petroleum Corporate Presentation March 2018

    Gulf Keystone Petroleum March 2018 Corporate Presentation

  2. Slide 2: Disclaimer

    2 Disclaimer These Presentation Materials are for information purposes only and must not be used or relied upon for the purpose of making any investment decision or engaging in any investment activity and should not be construed as, an offer for sale or subscription of, or solicitation of any offer

  3. Slide 3: Gulf Keystone Today

    3 Gulf Keystone Today  Predictable asset with robust production  Recent progress on commercial negotiations with new crude oil sales agreement  Regular payments for over two years leading to positive free cash flow  No additional external funding required to increase production capacity to 55k b

  4. Slide 4: Gulf Keystone Summary

    4 Gulf Keystone Summary Shaikan production facility (PF‐1) Capital structure overview US$m(1) Share price – 13‐Mar‐18 (p) 118.0p Number of shares (million) 229.4 Market capitalisation $379 Total debt(2) 100 Cash(3) (157) Enterprise value $322 Shaikan – Reserves & resources summary (net) Priorities M

  5. Slide 5: Shaikan Overview & Operations Highlights

    Shaikan Overview & Operations Highlights

  6. Slide 6: Shaikan Field Overview

    6 Shaikan Field Overview  Located c.60km north of Erbil, the Shaikan field (operated by GKP – 80% WI) is one of the largest fields in Kurdistan – by reserves and production  Discovered in 2009, commercial production commenced in July 2013 and over 45 MMbbl have been produced to date  Steady produ

  7. Slide 7: A Differentiated Sub-Surface Story

    7 A Differentiated Sub‐Surface Story  The field contains heavy oil in fractured Jurassic carbonates (c.1,000m column) and lighter oil in fractured Triassic carbonates below  Dynamic data acquired so far suggest that aquifer influx is limited, compared to other fields in Kurdistan. The recovery fro

  8. Slide 8: Staged, Risk-Managed, Modular Approach

    8 Staged, Risk‐Managed, Modular Approach  Focus remains on value Stage 1 ‐ Maintain production level in line with current production capacity at 40,000 bopd Stage 2 ‐ Grow to 55,000 bopd in the near‐term Stage 3 ‐ Full‐field development plan in the mid‐ to long‐term  Continuous optimisation of the

  9. Slide 9: Access to Market

    9 Access to Market Turkey Tawke Iran Syria Iraq Taq Taq  The KRG’s MNR currently control all marketing and crude exports from Kurdistan  In September 2015 GKP, at the request of the MNR, commenced trucking Shaikan crude oil to the Turkish border for injection into the export pipeline to Ceyhan in

  10. Slide 10: Financial Review

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  11. Slide 11: Financial Highlights

    11 Financial Highlights  Healthy financial position  Free cash flow positive through H1 2017  Eleven payments from the MNR of $15m gross ($12m net to GKP) in 2017  $157m in cash and cash equivalents as at 22 January 2018  $100m Reinstated Notes  Two coupon cash payments made in 2017  Focus on

  12. Slide 12: H1 2017 Revenue and EBITDA

    12 H1 2017 Revenue and EBITDA  $78.3m revenue (H1 2016: $102.1m)  $72.0m of revenue accounted for on a cash assured basis (H1 2016: $52.9m)  $6.3m of payables to the MNR offset against revenue arrears (H1 2016: $49.2m)  Estimated realised sales price: c.$32/bbl(1)  Brent c.$52/bbl less c.$20/bb

  13. Slide 13: Conclusion

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  14. Slide 14: Focus for 2018

    14 Focus for 2018 1 Operations 2 Meet guidance (27‐32k bopd gross) 3 Achieve commercial and contractual clarity 4 Finalise investment plans  0 5 Manage cost base

  15. Slide 15: Appendices

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  16. Slide 16: Reserves and Resources Summary

    16 Reserves and Resources Summary Shaikan Reserves Gross Field Oil Reserves (MMbbl) GKP (WI 58%)(1) Reserves (MMbbl) Field Formation 1P 2P 3P 1P 2P 3P Shaikan Cretaceous 1 3 4 1 2 2 Shaikan Jurassic 212 568 877 123 329 508 Shaikan Triassic 18 44 63 10 25 37 Shaikan Total 231 615 944 134 356 547 Shai

  17. Slide 17: Shaikan Arrears

    17 Shaikan Arrears Net position to GKP as at: 31 December 30 June ($m) 2016 2017 Revenue Arrears (unrecognised) $25m $33m MNR Government Participation Option $71m $76m (back costs)  Manageable level of arrears  Prudent accounting approach (off balance sheet)  All values are subject to audit and r

  18. Slide 18: Shaikan Cost Recovery

    18 Shaikan Cost Recovery  R‐Factor: 0.5, leading to a maximum share of profit oil to Contractors (30%) 30 June Recovery of Shaikan Cost Petroleum Shaikan Cost Pool(1) ($m) 2017 30 June 2017 ($m) Gross Costs $1,050m 349 Recoverable Costs Pool $1,002m o/w Recovered Costs Estimate $349m 653 48 Availab

  19. Slide 19: Shaikan Production Sharing Contract Summary

    19 Shaikan Production Sharing Contract Summary GROSS REVENUE 100% ROYALTY 10% NET REVENUE 90% COST RECOVERY PROFIT OIL 40% 60% Unused CR = Profit Oil CONTRACTOR (1) KRG (1) Split based on R‐Factor (Cum. Rev/Cum. Costs) based 30%‐15% 70%‐85% on linear scale 1<R>2 Corporate Tax Paid by Government CONT

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