Gulf Keystone Petroleum Limited · LSE:GKP
Gulf Keystone Petroleum — FY2016 Earnings Presentation
24 slides from Gulf Keystone Petroleum's earnings presentation, Apr 6, 2017
Slide 1: Gulf Keystone Petroleum Full Year Results 2016
Gulf Keystone Petroleum Full Year Results 2016 6 April, 2017
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
Slide 3: Overview: Jón Ferrier, CEO
Overview: Jón Ferrier, CEO
Slide 4: Gulf Keystone Today
4 Gulf Keystone Today Robust and predictable asset with strong current production levels at c.38,000 bopd Regular payments throughout 2016 – 2017 Free cash flow positive and strong balance sheet No additional external funding required to increase production capacity to 55,000 bopd Safe and
Slide 5: 2016 Results Highlights
5 2016 Results Highlights OPERATIONS Record gross production from Shaikan 12.7 MMstb of oil (+14% y-o-y) Daily production of 34,794 bopd, at the upper-end of our 31,000-35,000 bopd guidance Production guidance for 2017 is 32,000-38,000 bopd (gross) Shaikan production for Q1 2017 averaged 3
Slide 6: Operations: Stuart Catterall, COO
Operations: Stuart Catterall, COO
Slide 7: Shaikan Overview
7 Shaikan Overview Located c.60km north of Erbil, the Shaikan field is one of the largest fields in Kurdistan – by reserves and production Discovered in 2009, commercial production commenced in July 2013 and over 35 MMstb have been produced to date Low production costs by global standards – wi
Slide 8: A Differentiated Sub-Surface Story
8 A Differentiated Sub-Surface Story Illustrative cross section through Shaikan Cretaceous Heavy oil 2P: 3 MMstb / 2C: 53 MMstb Burj Khalifa Jurassic c.1,000m oil column with gravity ranging from 18° API at the top to 11° API at the bottom 2P: 568 MMstb / 2C: 80 MMstb Triassic Light oil with 38-43 °
Slide 9: Predictable Performance
9 Predictable Performance Production Steady production rate of c.38,000 bopd Production continues to be dry oil with no breakthrough of aquifer water or gas Plant uptime of over 98% in 2016, with no lost-time incidents Reserves & Sub-Surface Interpretation Remaining 2P gross reserves of 615
Slide 10: Shaikan Production Investment: Staged, Risk-Managed, Modular Approach
10 Staged, Risk-Managed, Modular Approach Focus 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, 110,000 bopd in the mid- to long-term Work continues on the o
Slide 11: Financial Review: Sami Zouari, CFO
Financial Review: Sami Zouari, CFO
Slide 12: Financial Highlights
12 Financial Highlights Positive Cash Flow and Profit from Operations in Kurdistan for the first time Strong Upward Trends Strong Downward Trends (2016 vs 2015) (2016 vs 2015) Cash Balance: +113% Shaikan Gross Field Opex: $3.5/bbl (vs. $5.3/bbl in 2015) Revenue: +126% Operating Expenses: –
Slide 13: Financial Highlights (cont'd)
13 Financial Highlights (cont’d) Successful completion of the Restructuring in October 2016 Adequate level of debt at $100m First $5m coupon due on 18 April 2017 will be paid in cash GKP has the option to pay interest either on a PIK basis at 13% or in cash at 10%(1) 2017 – off to a good s
Slide 14: Strong Revenue and Cash Receipts
14 Strong Revenue and Cash Receipts Revenue Change in Cash $122m of revenue accounted for on a cash First year of positive cash flow from assured basis operating activities $72m of payables to the MNR offset against $114m net receipts from export sales in 2016 revenue arrears $25m Open Off
Slide 15: Downward Trend in Costs
15 Downward Trend in Costs Lower costs achieved against higher production in 2016 Costs reductions driven by: Renegotiating key contracts Rationalising organisational structure Operating Expenses(1) General & Admin. Expenses Gross Opex $7.0/bbl $5.3/bbl $3.5/bbl per barrel 60 14 60 14 50 12
Slide 16: EBITDA and Capex Review
16 EBITDA and Capex Review EBITDA Capital Expenditure 2016 led to positive results for the first time Robust production levels despite low capex since Kurdistan entry $9m capital expenditure in 2016 primarily on $108m EBITDA studies and production facilities improvement projects $26m Profi
Slide 17: Shaikan Arrears
17 Shaikan Arrears Net position to GKP as at: 31 December 31 December ($m) 2015 2016 Revenue Arrears (unrecognised) $44m $25m MNR Government Participation Option $75m $71m (back costs) Lower and manageable level of arrears compared to peers operating in Kurdistan Prudent accounting approach as o
Slide 18: 2017 Financial Outlook
18 2017 Financial Outlook 1 Secure continuous payment cycle 2 Achieve further contractual and commercial clarity Execution of the Second Shaikan PSC Amendment Revenue receipts in accordance with the PSC entitlements Marketing terms 3 Prudent resource management Ongoing cost optimisation
Slide 19: Outlook: Jón Ferrier, CEO
Outlook: Jón Ferrier, CEO
Slide 20: Summary and Outlook
20 Summary and Outlook 1 Safe, reliable operations 2 Achieve commercial certainty 3 Unrivalled organic growth; 40,000–55,000–110,000 bopd
Slide 21: Appendices
Appendices
Slide 22: Reserves and Resources Summary
22 Reserves and Resources Summary Shaikan Reserves Gross Field Oil Reserves (MMstb) GKP (WI 58%)(1) Reserves (MMstb) Field Formation 1P 2P 3P 1P 2P 3P Shaikan Cretaceous 1 3 4 1 2 2 Shaikan Jurassic 212 568 877 123 329 508 Shaikan Triassic 18 44 63 10 25 37 Shaikan Total 231 615 944 134 356 547 Shai
Slide 23: Shaikan Cost Recovery
23 Shaikan Cost Recovery R-Factor: 0.4, for a maximum share of profit oil to Contractors (30%) Recovery of Shaikan Cost Petroleum 31 Dec. 2016 ($m) 31 December Shaikan Cost Pool ($m) 2016 Gross Costs(1) $1,022m 292 Recoverable Costs Pool $974m o/w Recovered Costs Estimate $292m 48 682 Available fo
Slide 24: Thank you
Thank you More resources are available at: www.gulfkeystone.com
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