Gulf Keystone Petroleum Limited

Adjusted EBITDA increased 26% to $52 million in H1 2026 from $41 million in H1 2025. Operating costs fell 25% to $20 million and other G&A expenses were 6% lower at $4.3 million. Free cash outflow was $2 million, and net CapEx in the period was $18 million. Gross average production was 14,600 barrels of oil per day versus 44,100 barrels per day in H1 2025, reflecting shut-ins from February 28 to June 23. Management said gross volumes are currently approaching 40,000 barrels of oil per day after the August 16 restart, and expects to be back close to 44,000-45,000 barrels per day in about 3 weeks from restart. The company also announced an interim semiannual dividend of $10 million for payment in September 2026, following a $12.5 million dividend paid in April. For the balance of 2026, management is focused on completing the ramp-up, maintaining stable exports if security allows, and progressing toward full PSC entitlement for export sales at international prices; it also said PF-2 water handling facilities remain on track for full start-up in Q1 2027 and could add 4,000 to 8,000 barrels per day of incremental gross production above baseline, with total capacity around 77,000 barrels per day.

Jon Harris framed the half-year as a resilience story: protecting people, preserving the balance sheet, and keeping strategic projects moving through repeated security-related interruptions. He emphasized that production has restarted, exports have resumed, and the key strategic goal is to move from interim arrangements to full PSC entitlement and international pricing. His tone was cautiously optimistic, repeatedly linking that step to stronger cash flow and a return to production growth in 2027.

Gabriel Papineau-Legris highlighted the financial discipline that helped the company absorb the shut-ins: adjusted EBITDA of $52 million, operating costs of $20 million, G&A of $4.3 million, and only $2 million of free cash outflow. He said the working capital outflow mainly reflects cash received at around $30 per barrel versus international prices in the entitlement invoices, with a top-up receivable increased to around $80 million net to GKP at period end. He also noted the board’s confidence in the balance sheet and cash balance, which supported the decision to declare a $10 million interim dividend, while keeping flexibility to cut CapEx and costs if needed.

Analysts focused on the reserve life versus license duration, the speed of the production ramp, the recovery of the receivable, and whether CapEx would rise in H2. Management said the 27-year reserve life assumes production ramps up and that the reserves are expected to be produced within the license period; it also said the production shutdowns should not materially affect reserves. On receivables, management said the Q4 2025 amount has been validated after the independent consultants’ review and is now being pursued via additional cargo allocations from September, with Q4 viewed as the first priority before moving to 2026 receivables. On drilling and CapEx, management said it is tendering for a rig and expects drilling in H2 next year, while CapEx may rise but is still too early to quantify because some spend remains discretionary and tied to pricing and cash recovery.