Gulf Keystone Petroleum Limited · LSE:GKP
Gulf Keystone Petroleum — Investor Presentation (January 2020)
26 slides from Gulf Keystone Petroleum's investor presentation, Jan 22, 2020
Slide 1: Gulf Keystone Petroleum Corporate Presentation January 2020
Gulf Keystone Petroleum Corporate Presentation January 2020
Slide 2: Disclaimer
Disclaimer This proprietary presentation (the “Presentation”) has been prepared by Gulf Keystone Petroleum Limited (the “Company”). Under no circumstances may this presentation be deemed to be an offer to sell, a solicitation to buy or a solicitation of an offer to buy securities of any kind in any
Slide 3: GKP at a glance... and in numbers
GKP at a glance… ...and in numbers bopd • Pure-play Kurdistan E&P with operatorship c.40,000 Current gross production – 80% WI in Shaikan Field MMstb Gross 579 • Vision to grow production to 110,000 bopd 2P Reserves(1) US$/bbl H1 2019 3.9 Opex per Barrel • 1st expansion phase to 55,000 bopd underway
Slide 4: Experienced management team
Experienced management team A fit-for-purpose and cohesive team to deliver the potential of Shaikan Senior management team profiles Management team with proven track record • Highly experienced management team Jón Ferrier Ian Weatherdon CEO CFO – Complementary skill sets and expertise (technical, co
Slide 5: Shaikan Overview & Development Vision
1 Shaikan Overview & Development Vision 2 Financial Strategy 3 Outlook
Slide 6: Shaikan – A giant field with proven production track record
Shaikan – A giant field with proven production track record Field overview Key information (gross figures) • Located c.60km north-west of Erbil in the • Gulf Keystone interest: 80% north-west Zagros Fold-belt • Partner: MOL 20% • One of the largest fields in Kurdistan by • Discovered: August 2009 re
Slide 7: Shaikan production at c.40,000 bopd
Shaikan production at c.40,000 bopd • 2019 average gross production of 32,883 bopd – meeting original guidance • Plan to increase average production by >30% in 2020 Last 12 Months Shaikan Gross Production (‘000 bopd) SH-3 PF-2 planned Start of PF-1 workover PF-1 planned shutdown for export via compl
Slide 8: Shaikan today – Infrastructure overview
Shaikan today – Infrastructure overview Atrush pipeline SH-4 SH-10 SH-11 SH-5 PF-1 SH-1 SH-3 SH-12 SH-6 SH-7 SH-2 SH-8 PF-1 PF-2 PF-1 pipeline SH-1&3 SH-4 SH-7 SH-8 PF-2 SH- SH-2 SH-5 SH-12 10&11 2.5 km • Two production facilities, each with a nameplate capacity of 20,000 bopd • Ten production wells
Slide 9: Strong focus on ESG
Strong focus on ESG Environment Sustainability / Societal • Plan to eliminate routine flaring and emissions • Energy sector underpins the Kurdistan economy • Effective waste management programme in • Strong investment in localisation and development place with cradle-to-grave traceability of staff i
Slide 10: Exports
Exports Turkey Iran Syria Iraq • MNR currently controls marketing and exports • All Shaikan production exported directly via tie-in at PF-2 into Kurdistan export pipeline as part of the Kurdish blend • No pipeline ullage constraints anticipated All production from Shaikan now exported via pipeline 1
Slide 11: Subsurface schematic
Subsurface schematic Cretaceous Very heavy or bituminous oil 2P: 3 MMstb / 2C: 53 MMstb Jurassic Heavy oil with 14 - 20° API 2P: 532 MMstb / 2C: 80 MMstb 3 Shards Unusually high hydrocarbon column – c.950m Triassic Light oil with 38-43° API and gas condensate 2P 44 MMstb 2C 106 MMstb Dark Green = Oi
Slide 12: Shaikan field development plan
Shaikan field development plan • Staged approach to deliver long-term potential • Revised FDP submitted in May 2019 – discussions with MNR ongoing Subject to FDP approval 120 Phase 2: 110,000 bopd Shaikan Production Capacity (‘000 bopd) 100 Triassic expansion & Cretaceous pilot Not yet 80 85,000 bop
Slide 13: 55,000 bopd expansion programme on track for Q3 2020
55,000 bopd expansion programme on track for Q3 2020 Atrush pipeline SH-9 New well SH-4 SH-10 SH-11 SH-5 SH-L & SH-I PF-1 tie-in pipeline PF-1 SH-1 SH-3 SH-7 SH-12 SH-6 SH-2 SH-8 SH-G PF-2 PF-1 pipeline 2.5 km • SH-12, first well in the drilling campaign, currently producing c.4,000 bopd • SH-9 reac
Slide 14: High levels of activity
High levels of activity PF-2 additional pumps installed PF-1 debottlenecking Rig at SH-9 PF-1 export station & pipeline 14
Slide 15: Fully funded for entire development
Fully funded for entire development Phase 1 Phase 2 Low cost base(1): 110,000 bopd Accelerated recovery of petroleum costs pool (c.US$500m gross) Opex (US$3.9/bbl) (Triassic expansion & & continuous recovery of future expenditures Focus on G&A Cretaceous pilot) 85,000 bopd (Triassic pilot) 75,000 bo
Slide 16: Financial Strategy
1 Shaikan Overview & Development Vision 2 Financial Strategy 3 Outlook
Slide 17: Financial highlights
Financial highlights • Robust balance sheet – US$192 million as at 20 January 2020 vs. US$100 million bond due in 2023 • Payments delays in Q4 2019, expecting return to regular payments Revenue EBITDA Profit/(Loss) After Tax US$m US$m US$m 140 100 50 120 $116m $27m $102m $24m $96m 75 25 100 $62m $59
Slide 18: Sustained cost optimisation
Sustained cost optimisation • Opex and G&A increases hand-in-hand with increased Shaikan capital investments • H1 2019 Opex and G&A at the lower end of guidance Operating Expenses(1) General & Administrative Expenses Operating Expenses 48 35 29 31 18 (US$m) Bopd Bopd 6 40,000 40 40,000 35,000 35,000
Slide 19: Financial strategy
Financial strategy 1 2 3 Clean Staged Cash Flow Balance Sheet Development Generation • US$192m cash • Onshore development • Regular payments • Effective cash management • Optimal reservoir • Strong revenue generation • US$100m bond management • Also, c.US$500m petroleum cost • 10% coupon • Efficient
Slide 20: Outlook
1 Shaikan Overview & Development Vision 2 Financial Strategy 3 Outlook
Slide 21: Outlook
Outlook Growth ‒ 55,000 bopd gross production target on track for Q3 2020 ‒ 2020 average gross production of 43,000-48,000 bopd: >30% y-o-y growth Return significant value to shareholders ‒ Commitment to pay annual dividend of at least US$25 million per year ‒ Complete remaining US$15 million of buy
Slide 22: Thank you
Thank you More resources are available at: www.gulfkeystone.com
Slide 23: Board of directors
Board of directors Jaap Huijskes Jón Ferrier Ian Weatherdon Martin Angle David Thomas Kimberley Wood Non-Executive Chairman Chief Executive Officer Chief Financial Officer Senior Independent Non-Executive Director Non-Executive Director Director Joined in Nov 2017 Joined in May 2015 Joined in Januar
Slide 24: Half Year 2019 highlights
Half Year 2019 highlights H1 2019 H1 2018 FY 2018 Gross production (bopd) 29,362 31,861 31,563 Brent(1) (US$/bbl) 66.1 70.7 71.1 Discount (US$/bbl) 21.7 22.8 22.3 Realised price (US$/bbl) 44.8 47.9 49.0 Revenue (US$m) 95.6 116.2 250.6 EBITDA (US$m) 59.0 61.6 149.3 Profit after tax (US$m) 24.2 26.7 7
Slide 25: Reserves and Resources
Reserves and Resources • In support of the FDP submitted in (1) Gross Shaikan Reserves (Dec-2019) 2018, GKP completed: 1000 908 – New petrophysical and geological interpretations and a comprehensive 800 fracture network modelling study 579 (MMstb) 600 – Review of updated well and facilities performa
Slide 26: Shaikan Production Sharing Contract - Summary of terms
Shaikan Production Sharing Contract - Summary of terms 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) 30%-15% 70%-85% based on linear scale 1<R<2 Corporate Tax Paid by Governm
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