Gulf Keystone Petroleum Limited

In the first half of 2025, gross average production increased 12% year over year to 44,100 barrels of oil per day, and average realized local-sales price was $27.80 per barrel. Adjusted EBITDA rose 13% to $41 million. Gross OpEx per barrel was flat at $4.2 per barrel, operating costs increased 13% to $27 million, and other G&A expenses fell 15% to $4.6 million. The company generated $25 million of free cash flow in H1 versus $27 million a year ago; net CapEx was $18 million, or $13 million cash basis excluding a noncash charge. Cash was $99 million at end-June and $106 million as of yesterday. For 2025, GKP tightened gross average production guidance to 40,000-42,000 barrels per day, raised cash net CapEx guidance to $30 million-$35 million, kept operating cost guidance at $50 million-$55 million, and kept other G&A below $10 million. Management also said the PF-2 water-handling project will require $12 million total net CapEx to commissioning, with limited incremental net CapEx in 2025.

Jon Harris emphasized disciplined operations, safety, and shareholder returns while the company waits on a potential export restart. He said the field has been ramped back toward full capacity after the July shut-in, and highlighted that the new water-handling project should unlock constrained wells while reducing reservoir risk. His tone was cautious but constructive: optimistic on recent progress in export talks, but unwilling to speculate on timing or negotiation details.

Gabriel Papineau-Legris focused on the financial resilience of the business: $41 million of adjusted EBITDA, $25 million of free cash flow, and a cash balance of $99 million at June 30, rising to $106 million recently. He said gross OpEx per barrel stayed flat at $4.2, operating costs rose with higher production and well work, and other G&A declined to $4.6 million, keeping the company on track for its full-year cost guidance. On capital allocation, he said the board approved another $25 million dividend for September, bringing 2025 dividends to $50 million, while preserving a minimum cash buffer of about $80 million and keeping buybacks as an opportunistic option.

Analysts pressed for details on export restart timing, settlement mechanics, and whether the company would accept compromises on payment surety and other terms; management repeatedly declined to disclose negotiation specifics but said discussions with the KRG and Ministry of Oil are progressing and that momentum has improved recently. Questions also focused on capital intensity and growth: management said PF-2 water handling costs $12 million through commissioning, that two new wells would cost about $35 million-$40 million net and likely add 6,000-8,000 barrels per day, and that water handling may offer better returns while also reducing downside risk. On strategy, management said the company remains focused on Kurdistan, is not pursuing near-term farm-ins, and would consider more drilling and higher dividends if exports resume and payments become more stable.