Kurdistan-focused oil producer Gulf Keystone Petroleum Ltd saw a significant rise in shares on Friday after announcing plans to return an additional $15 million to shareholders via an interim dividend. This decision follows a strong performance in the first half of the year and comes just a month after unveiling a $10 million share buyback program.
The new dividend is lower than the $25 million interim dividend paid in 2023, which had followed the cancellation of the prior year’s proposed final dividend.
“With improvements in the operating environment, the company’s ambition is to reinstate an appropriate distribution policy to provide shareholders with greater clarity on returns,” Gulf Keystone said in a statement during its annual general meeting update.
“In the interim, the board will continue to review the company’s capacity for additional shareholder returns via dividends or buybacks based on the operating environment and the company’s liquidity needs.”
Chief Executive Jon Harris highlighted the company’s “significant progress” since last year when it had to adjust to a new operating environment following the suspension of Kurdistan crude exports in March 2023.
He noted that the company had “successfully adapted by safely transitioning our operations to local sales and sharply reducing capital expenditures and costs. As a result, we have been able to generate meaningful free cash flow, enabling us to strengthen our balance sheet and subsequently return cash to shareholders this year through our recent share buyback program of up to $10 million.”
Crude sales to the local market from the Shaikan Field have been “robust,” with gross average sales in 2024 year-to-date increasing to 38,700 barrels of oil per day, and current prices improving to $28 a barrel.
Gulf Keystone stated that it continues to engage with the government to find a solution for restarting pipeline exports. Political and commercial negotiations are ongoing, making the timeline for resuming exports uncertain.
“Together with other IOCs operating in Kurdistan, Gulf Keystone is ready to restart exports, contingent upon reaching agreements on payment surety for future oil exports, the repayment of outstanding receivables, and the preservation of current contract economics,” the company said.
By 08:58 BST, shares were up 6.98%, trading at 151.70p.
