Gulf Keystone Gets $15 Million Oil Payment, Doesn't Need Deal

(Updates with Chief Executive comment, more detail, updated share price)

By Philip Waller

LONDON--The chief executive of Gulf Keystone Petroleum Ltd. (GKP.LN) Monday said his company doesn't need a takeover deal to grow the business, but he would be willing to consider any sensible offer.

Analysts have said the company, an oil producer in Iraqi Kurdistan, is more attractive as an investment proposition after it completed a debt restructuring in October.

Last month, its shares rose following reports that Chinese oil major China Petroleum & Chemical Corp., or Sinopec Ltd., had made a takeover approach for the group.

CEO Jón Ferrier said the company would have welcomed a farm-in deal when it was facing financial problems, though the debt shake-up had changed that.

"That's not the case any more and we don't need a deal," Ferrier told Dow Jones Newswires in a telephone interview.

"But I know that if someone comes along and makes a sensible offer, of course I'll put it to the board."

Gulf Keystone earlier Monday said it has received $15 million from the Kurdistan Regional Government for oil sales made in October.

The group, which produces 40,000 barrels of oil a day from its Shaikan field in the semi-autonomous region of Iraq, said it has $106.1 million of cash after receiving the payment.

Gulf Keystone has been receiving regular oil-related payments from the KRG since September 2015, albeit with delays.

The company remains in talks with the regional government about further potential payments to which it claims to be entitled for past oil production and field development costs.

Mr. Ferrier said Gulf Keystone is in a good position because it is cash-flow positive and because the Kurdistan government knows that keeping up payments to oil producers is important to the region's credibility with investors.

Kurdistan is under-explored with relatively low exploration costs, oil prices are stable and members of the Organization of the Petroleum Exporting Countries appear to be in agreement about proposed production cuts, Mr.Ferrier said.

"There's still [likely to be] nice, steady oil demand for some years to come so Kurdistan is among the most attractive investment destinations," he said.

At 1418 GMT, shares in Gulf Keystone were up 1.7 pence, or 1.3%, at 131.5 pence.

-Write to Philip Waller at philip.waller@wsj.com

(END) Dow Jones Newswires

January 23, 2017 10:24 ET (15:24 GMT)

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