Gulf Keystone (LSE:GKP) delivered resilient results for the first half of 2026 despite security-related disruption in the Kurdistan Region of Iraq, which resulted in precautionary production shutdowns and significantly reduced output from the Shaikan Field.
Average production for the period stood at approximately 14,600 barrels per day as the temporary shut-ins weighed on volumes. Despite the operational disruption, cost reductions helped Gulf Keystone restrict its free cash outflow to around $2 million.
Revenue from entitlement invoices remained broadly stable at $82.8 million, while adjusted EBITDA increased to $51.7 million, supported by higher realised prices on export sales. The company also maintained a strong cash position during the period while returning $12.5 million to shareholders through a dividend paid in April.
Operations at Shaikan have since resumed, with production recovering towards 40,000 barrels per day. Gulf Keystone is continuing work to increase output while progressing investment in the PF-2 water handling project, which is scheduled to become operational in early 2027.
The company is also seeking to secure its full production sharing contract entitlement for crude sold into export markets at international prices. This is being pursued under extended interim export arrangements as Gulf Keystone works with stakeholders on the commercial framework surrounding exports from the Kurdistan Region.
Reflecting confidence in the company’s liquidity and ability to generate cash, the board has declared a further interim dividend of $10 million. Management is also preparing for the possibility of restarting broader field development activities and drilling at Shaikan during 2027.
The financial outlook continues to benefit from Gulf Keystone’s low leverage and solid equity position, alongside generally positive cash generation despite the recent disruption. These strengths provide the company with flexibility to fund operational priorities while continuing shareholder distributions.
Technical indicators are currently less supportive, with the shares trading below several important moving averages and the MACD remaining negative. Valuation signals are mixed, as an attractive dividend yield is balanced by a comparatively high price-to-earnings multiple.
About Gulf Keystone Petroleum
Gulf Keystone Petroleum is an independent oil and gas company focused on the Shaikan Field in the Kurdistan Region of Iraq.
The company produces and exports crude oil from Shaikan and is listed on both the London Stock Exchange and Oslo Stock Exchange. Its strategy centres on maintaining financial strength, optimising the long-term development of the field and generating sustainable returns for shareholders.
Gulf Keystone has maintained a low-debt financial structure while investing in infrastructure and production capacity at Shaikan. Its longer-term plans include further field development and drilling, subject to operating conditions, commercial arrangements and the wider regional environment.
Leave a Reply