Gulf Keystone's outlook stronger in Kurdistan despite Iraq turmoil
Gulf Keystone [LON:GKP] has the best asset in Kurdistan and the semi-autonomous region is now “looking much better,” Chairman Simon Murray said at the company’s AGM in Paris today, 17 July. Current political instability in Iraq has left Kurdistan in a more stable position, Murray told shareholders.
Iraq's turmoil has had the effect of strengthening Kurdistan’s autonomy and has been largely beneficial to the company, officials said. Still there has been some negative impact. In June there was no production for a few days due to an absence of police in the area, according to the group’s Chief Executive John Gerstenlauer. Some local villagers “came by to see if we wanted to share money or other things with them,” he said.
While investors voted in favour of all resolutions, 33% of shareholders voted against a long-term incentive plan, while 21.59% of investors voted against the directors’ remuneration package.
Minutes before today’s meeting, the company announced that founder and CEO Todd Kozel would not seek re-election to the board as an executive director, and would instead take a more minor role. Bowing to shareholder pressure, Kozel had previously announced he was stepping down as CEO. Major investors, such as M&G and Capital have been critical of Kozel’s remuneration and personal expenses when the company has been loss making.
COO Gerstenlauer was appointed chief executive during the meeting. The group has been without a CFO since Ewen Ainsworth departed in June. Four non-executive directors have also left the group in the past month.
The group’s cash flow issues have been largely resolved, said Murray. Exports had previously been hampered by Iraq’s national government’s attempts to stop oil being exported from Kurdistan. Since December 2013, the company has been exporting crude oil by truck through Turkey.
The group is producing between 21,000 and 25,000 barrels of oil per day (bopd) with total production of more than 4m barrels at its Shaikan oil field. The group has a target of 40,000 bopd by the end of 2014, and aims to produce 66,000 bopd in around 24 months. The company will look to hit a 100,000 bopd in the second half of 2017, Gerstenlauer said.
Gulf Keystone shares closed on Thursday at GBp 89, giving it a market capitalization of GBP 804.48m.