Gulf Keystone Petroleum Limited · LSE:GKP

Gulf Keystone Petroleum — Shareholder Meeting (July 2015)

35 slides from Gulf Keystone Petroleum's shareholder meeting presentation, Jul 9, 2015

  1. Slide 1: Annual General Meeting 2015

    0 ANNUAL GENERAL MEETING 2015 09 July 2015

  2. Slide 2: Chief Executive Officer

    1 Chief executive officer Jón Ferrier

  3. Slide 3: Today's Presenters

    Today’s Presenters 2 Jón Ferrier – Chief Executive Officer Joined the Company as Chief Executive Officer in June 2015  Prior to GKP, Senior Vice President Business Development, Strategy & Commercial at Maersk Oil in Copenhagen where he served on the Executive team. Led Maersk Oil’s entry to Kurdist

  4. Slide 4: Market Dynamics

    Market Dynamics 3 Iraqi Kurdistan urges EU meeting to Kurds Say Iraq’s Oil Payments Coming Up arm Kurdish forces Short; Iraqi Kurdistan’s oil Minister says BBC - 15.8.14 underfunding could hurt fight against Islamic State Wall Street Journal - 9.6.15 Oil price slide claims another scalp Daily Telegr

  5. Slide 5: The headlines

    The headlines 4 Safety and CSR  Safety performance has been excellent  68% improvement in our LTI performance  At 76% - one of the highest percentage of National staff in Kurdistan  Security situation remains stable  CSR efforts making a difference Production  Milestone of 40,000 bopd was reac

  6. Slide 6: CEO Priorities

    CEO PRIORITIES 5 Safe and reliable operations  Our “licence to operate”  Maintain safe production at plant capacity Commercial Sustainability  Regular payments  Diversified marketing strategy Stakeholder Engagement  Kurdistan – MNR, others  IOCs  Shareholders 5

  7. Slide 7: CEO Priorities

    CEO PRIORITIES 6 Safe and Reliable Operations  Our “licence to operate”  Maintain safe production at plant capacity Commercial Sustainability  Regular payments  Diversified marketing strategy Stakeholder Engagement  Kurdistan – MNR, others  IOCs  Shareholders Governance  Strong Leadership te

  8. Slide 8: Operations & Safety

    7 Operations & Safety VP Operations – John Stafford

  9. Slide 9: Safe and reliable operations

    Safe and reliable operations 8 HSE  Good performance with statistics showing improvements in all areas, particularly LTI’s: 68% improvement from 2014 to 2015 (YTD)  Significant investment in improving driving to and from the facility, the most hazardous oilfield activity  IVMS installed and conti

  10. Slide 10: Safe and reliable operations: Production Performance

    Safe and reliaible operations 9 Production Performance  Total production from the field to end June exceeds 13 million barrels  This represents 4% of our 2P reserves and 1.3% of the combined 2P + 2C i.e. early days in terms of production  Over 95% of production is from the upper reservoir (Sargel

  11. Slide 11: Production Facility-1: before

    Production Facility-1 : ibefore 10 Q4 2012

  12. Slide 12: Production Facility-1: after

    Production Facility-1 : after 11 Q2 2015

  13. Slide 13: PF Debottlenecking

    PF Deibottlenecking 12 20,000 bopd nameplate now increased 25% to 25,000 bopd at PF-1 Over 150 MOC and debottlenecking tasks identified Both plants have amine system fully operational

  14. Slide 14: Production History

    Production History 13 Shaikan Field Oil Production History Shut-in due to 45,000 market 14 conditions 40,000 Receipt of first 12 pre-payment for exports 35,000 10 30,000 PF-2 online Cumulative Oil (MMstb) 8 Oil Rate (stb/d) 25,000 20,000 Intermittent production whilst 6 market conditions assessed wi

  15. Slide 15: Production Guidance

    Production Guidance 14  Average production over whole of 2015 likely to be in range of 30,000 to 34,000 subject to offtake  Production interruptions driven by non-technical factors  Five weeks suspension of production operations in Q1 2015 due to market dynamics  2H production target is in range

  16. Slide 16: Reservoir Performance

    Reservoir Performance 15 What have we learned? • The reservoir is extremely well connected at SAM level • Aquifer support not a strong as expected

  17. Slide 17: Shaikan aquifer observations

    Shaikan aquifer oibservations 16 Sargelu Alan Mus Butmah 1 km Fracture Oil Water Contact 8 km 16

  18. Slide 18: Shaikan Reservoir Performance

    Shaikan Reservoir Performance 17 Water providing pressure support OWC N Aquifer 17

  19. Slide 19: Shaikan Reservoir Performance

    Shaikan Reservoir Performance 18 Gas Cap Expansion and Gravity Drainage OWC N Aquifer 18

  20. Slide 20: Operational activity

    Operational activity 19  Work ongoing on an updated Shaikan FDP – Completion due at end 2015  Work ongoing on the Sheikh Adi FDP – Completion due in Q3 2015  FEED for Central Processing Facility underway  Debottlenecking and MOC programme ongoing  Continuous CBF and HSE measurement and monitori

  21. Slide 21: Operational Summary

    Operational Summary 20  Continue safe, sustainable operations  Asset is performing at or above expectation  New understanding being integrated into development model  Ready for next phase of development with regular payments

  22. Slide 22: Legal and Commercial Director

    21 Legal and commercial director Tony Peart

  23. Slide 23: Shaikan crude: diversified marketing strategy

    Shaikan crude: diversified marketing strateGY 22 Kurdistan Export Pipeline Tawke Tawke Taq Taq Taq Taq • Export deliveries by truck to the Turkish coast • Sales to a domestic offtaker • Export deliveries by truck to Fyshkhabour to enter export pipeline to Ceyhan 22

  24. Slide 24: Diversified Marketing Dynamics

    Diversified Marketing Dynamics 23 Export sales offtaker via Turkish port of Dortyol  Truck transported year to datee: 3.7 million barrels  For Netback to field; Average Brent Dtd US$60-65/bbl, less Shaikan quality discount of US$23/bbl, less transport of US$14.5/bbl, averaging prices to field in r

  25. Slide 25: Diversified Marketing Dynamics

    Diversified Marketing Dynamics 24 Sales by domestic offtaker  Sold at Shaikan loadrack to domestic offtaker: 0.9 million barrels  Historically MNR posted price  Currently For Netback to field; Average Brent Dtd US$60-65/bbl, less Shaikan quality discount of US$23/bbl, less transport of US$14.5/bb

  26. Slide 26: Near-term export pipeline access

    Near-term export pipeline access 25 Export via trucking to Fishkabur into existing pipeline for sale FOB Ceyhan Potential to move up to 40.000 bbl/day Trucking to nearby DNO offload Injection facility for blending with other point Kurdish crude oils Current Fob Ceyhan netted back Possible price at S

  27. Slide 27: Summary

    summary 26  Diversified marketing strategy comprising three options: sales to a domestic offtaker, exports by truck and pipeline exports  New contract with the domestic offtaker with focus on export deliveries by truck to the Turkish coast with the total payments of US$9.3 million net now received

  28. Slide 28: Chief Financial Officer

    27 Chief financial officer Sami Zouari

  29. Slide 29: 1H 2015 Financial Highlights

    1H 2015 Financial Highlights 28 28  Removal of restrictive condition in 13.0% Senior Unsecured HY Bonds successfully achieved on 7 April 2015  31 March 2015 placing raised net proceeds of US$39.0 million  New equity acts as a bridge to steady revenues and arrears payments and/or potential M&A  U

  30. Slide 30: Committed capex schedule

    Committed capex schedule 29 29 Q1 Q2-Q4E (US$m net to GKP) 2015 Total Comments 2015 2015 Shaikan Drilling of an additional well to tie into PF-2 Shaikan-11 11.1 0.9 12.0 completed under budget PF 1 & PF2 Change orders and 2.2 8.9 11.1 Maximising capacity & sustaining plant operation debottlenecking

  31. Slide 31: Financial position: significant arrears

    Financial position: significant arrears 30 30 31-Mar-2015 Source Notes net to GKP Value depends on pricing assumptions used. Unrecognised revenues $103m Further clarity required on price achieved and exact amounts lifted at port in addition to payment schedule Shaikan Government option past costs $7

  32. Slide 32: Financial outlook

    Financial outlook 31 31  Cash balance at 8 July 2015 of US$72.1 million  We have to weather the storm until political and commercial stability are achieved  Payment of arrears are being addressed with the MNR  Key short term objective is to focus on securing payments via domestic sales or export

  33. Slide 33: Chief Executive Officer

    32 Chief executive officer Jón Ferrier

  34. Slide 34: 2015 Outlook

    2015 Outlook 33  Secure regular payments  Pursue arrears  Progress M&A process  Progress towards 100,000 bopd  Deliver good governance 33

  35. Slide 35: Annual General Meeting 2015

    34 ANNUAL GENERAL MEETING 2015 09 July 2015

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