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Gulf Keystone Petroleum Ltd. announced its Half Year Results for the period ended 30 June 2026 on 25 August 2026, reporting a gross average production of 14,600 bopd for H1 2026. The company recorded $82.8 million in revenue (invoiced) and $51.7 million in Adjusted EBITDA, paid a $12.5 million semi-annual dividend in April 2026, and declared a $10 million interim dividend ($0.046 per Common Share) payable on 28 September 2026, with a cash balance of $63.5 million as of 24 August 2026.
| Date | 25 Aug 2026 |
| Time | 07:00:00 |
| Category | Half-year Financial Report |
| ID | nsm:bcb8debf-60ba-480d-92a3-932cd4e8e1ae.html |
Disseminated via PRN on 25 August 2026
Gulf Keystone Petroleum
25 Aug 2026 06:00 UTC
25 August 2026
Gulf Keystone Petroleum Ltd. (LSE & OSE: GKP)
(“Gulf Keystone”, “GKP”, “the Group” or “the Company”)
2026 Half Year Results Announcement
Gulf Keystone, a leading independent operator and producer in the Kurdistan Region of Iraq, today announces its results for the half year ended 30 June 2026.
Jon Harris, Gulf Keystone’s Chief Executive Officer, said:
“GKP’s operational and financial performance in the first half of 2026 demonstrated the resilience of our business, our people and the Shaikan Field through a period of significant regional disruption. Our priority throughout has been the safety of our workforce while decisive action to reduce expenditures has enabled us to minimise cash outflow, maintain a robust, debt-free balance sheet and pay a $12.5 million dividend to shareholders.
We are pleased to have recently restarted production and exports following the extension of the tripartite interim export agreements, with volumes continuing to ramp up to prior levels. Despite the security issues in 2026 impacting production, the interim export agreements have worked effectively, with improved remuneration relative to local sales and consistent payments without delay following crude liftings.
Looking ahead to the remainder of the year, our focus is on maintaining stable production and exports, progressing the PF-2 water handling project and securing full PSC entitlement for past and present export sales at international prices. The latter would bolster cash flow generation, supporting our decision today to announce a semi-annual dividend of $10 million, and provide the foundations for a return to production growth in 2027. I would like to thank our staff, shareholders and wider stakeholders for their continued support.”
Highlights to 30 June 2026 and post reporting period
Operational
Financial
Outlook
Shareholder distributions
Investor & analyst presentation
GKP’s management team will be hosting a presentation for investors and analysts at 10:00am (BST) today via live audio webcast:
Sell-side analysts are requested to join the meeting via the dial-in details provided to them separately and ask questions verbally. Investors are encouraged to pre-submit written questions via the webcast registration page, with the opportunity to submit questions live during the presentation.
A recording of the presentation will be made available on GKP’s website.
Disclosure regulation:
This announcement contains information which is considered to be inside information pursuant to the UK Market Abuse Regulation (“UK MAR”) and the EU Market Abuse Regulation (“EU MAR”) and is subject to the disclosure requirements pursuant to UK MAR, EU MAR article 17 and section 5-12 of the Norwegian Securities Trading Act. This stock exchange announcement was published on behalf of Gulf Keystone by Aaron Clark, Head of Investor Relations and Corporate Communications of Gulf Keystone, at the date and time as set out above.
Enquiries:
| Gulf Keystone: | +44 (0) 20 7514 1400 |
| Aaron Clark, Head of Investor Relations
& Corporate Communications |
[email protected] |
| FTI Consulting | +44 (0) 20 3727 1000 |
| Ben Brewerton
Nick Hennis |
[email protected] |
or visit: www.gulfkeystone.com
Notes to Editors:
Gulf Keystone Petroleum Ltd. (LSE & OSE: GKP) is a leading independent operator and producer in the Kurdistan Region of Iraq. Further information on Gulf Keystone is available on its website: www.gulfkeystone.com
Disclaimer
This announcement contains certain forward-looking statements that are subject to the risks and uncertainties associated with the oil & gas exploration and production business. These statements are made by the Company and its Directors in good faith based on the information available to them up to the time of their approval of this announcement but such statements should be treated with caution due to inherent risks and uncertainties, including both economic and business factors and/or factors beyond the Company's control or within the Company's control where, for example, the Company decides on a change of plan or strategy. This announcement has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. This announcement should not be relied on by any other party or for any other purpose.
CEO review
GKP’s performance in the first half of 2026 was impacted by the precautionary shut-in of production for much of the period due to the deterioration in the regional security environment. By taking decisive action, we have been able to protect our assets and workforce, minimise cash outflow and pay a $12.5 million dividend to shareholders. The Shaikan Field has responded well to the recent restart in production and we are now focused on achieving full PSC entitlement for export sales at international prices and a return to production growth and shareholder value creation.
The safety of our staff and contractors has been our number one priority through the recent period of turbulence. Following the beginning of the conflict between the U.S. and Iran at the end of February 2026, we immediately took measures to protect our people by shutting in production operations and removing personnel from site, with only critical maintenance continuing. There have been zero Lost Time Incidents in 2026 year to date, extending our track record without an LTI to over three and a half years. We remain focused on safe operations following the recent restart of production and activity in the Shaikan Field.
Gross average production in the first half of 2026 was 14,600 bopd, a 67% decrease relative to the prior period (H1 2025: 44,100 bopd) due to the shut-in of the Shaikan Field for nearly four months between 28 February and 23 June 2026. Gross production prior to the shut-in had averaged 41,303 bopd from the beginning of 2026, with volumes exceeding 44,000 bopd on several days towards the end of February 2026 reflecting the completion of well workovers and interventions. Following the production restart on 24 June 2026, gross volumes were ramped up to above 40,000 bopd in under two weeks and had exceeded 45,000 bopd prior to the second precautionary shut-in on 19 July 2026.
Our response to the production interruptions has been to swiftly moderate expenditures while maintaining the ability to quickly restart production at full capacity. Almost all capital projects have been slowed down or suspended since the initial shut-in, with only safety critical or highly strategic projects proceeding.
We have continued to progress the PF-2 water handling project in the first half of 2026, with engineering work completed earlier this month, and have maintained the targeted start-up schedule of Q1 2027. Once operational, the water handling facilities are expected to unlock an estimated 4,000-8,000 bopd of incremental gross production above the anticipated field baseline from existing constrained wells while reducing downside risk to reservoir recovery. The facilities will add additional wet oil processing capacity of around 17,000 bopd to the Shaikan Field’s existing dry oil processing capacity of around 60,000 bopd.
We were pleased to promptly restart production on 16 August 2026 upon the signing of the tripartite export agreement extension. The Shaikan Field has again responded well, with gross volumes currently approaching 40,000 bopd. Well activities are underway to bring incremental volumes online and return to prior production levels soon.
The production restart has been enabled by a number of factors. First, the security environment in-country has remained relatively quiet following the recent de-escalation between the U.S. and Iran and the FGI’s provision of security guarantees to Kurdistan IOCs. Second, the ITP agreement between Iraq and Türkiye was extended earlier this month for one year, with negotiations ongoing regarding a new agreement beyond July 2027. Finally, the tripartite interim export agreements between the IOCs, FGI and KRG have been extended for six months to the end of January 2027 to enable the negotiation of longer-term agreements for export sales at international prices.
We are also pleased to report that the independent consultant’s review of IOC invoices and contractual entitlements for Q4 2025 production has recently been completed. GKP and other IOCs now expect to receive full PSC entitlement for export sales. The Company is working with SOMO and the KRG to secure additional liftings and associated payments to reconcile export sales since September 2025 to international prices. See the “Financial review” section for further detail.
Achieving full PSC entitlement for export sales at international prices would provide strong foundations for a return to field development. In anticipation, the Company has been discussing an updated Shaikan Field Development Plan (“FDP”) with the MNR. The FDP is similar to the version under execution prior to the ITP closure in March 2023 and suspension of activity. The Company is targeting an increase of the production plateau from the Jurassic reservoir to 85,000 bopd gross; a test of the Triassic reservoir of up to 10,000 bopd gross with an appraisal of the Cretaceous accumulation and; the implementation of a Gas Management Plan (“GMP”) aiming to eliminate routine gas flaring associated with oil production, a requirement of the Shaikan PSC. We will provide further updates as we firm up our plans.
Looking ahead to the remainder of 2026, we are focused on completing the ongoing ramp-up of production to prior levels and maintaining stable export sales, subject to the security environment. Assuming stable production and export sales, the Company will continue to progress the PF-2 water handling project, safety critical facilities upgrades and selective, low-cost production optimisation initiatives, while laying the foundations for a potential return to field development and drilling in 2027.
Despite the security issues in 2026 impacting production, the interim export agreements have worked as expected, with improved remuneration relative to local sales and consistent payments without delay following crude liftings. Good progress has also been made towards achieving full PSC entitlement for export sales at international prices, which would bolster cash flow generation and provide us with the conditions to unlock significant growth and value from the Shaikan Field. We are excited about the future and would like to thank all GKP shareholders for their continued support.
Jon Harris
Chief Executive Officer
24 August 2026
Financial review
Key financial highlights
|
|
|
Six months ended
30 June 2026 |
Six months
ended 30 June 2025 |
Year
ended 31 December 2025 |
| Gross average production(1) | bopd | 14,600 | 44,100 | 41,560 |
| Dated Brent(2) | $/bbl | 92.3 | 71.9 | 69.1 |
| Realised price(1)(3) | $/bbl | 83.5 | 27.8 | 33.9 |
| Discount to Dated Brent | $/bbl | 8.8 | 44.1 | 35.2 |
| Revenue (invoiced for the period)(1)(4) | $m | 82.8 | 83.1 | 193.1 |
| Revenue (IFRS)(5) | $m | 57.8 | 83.1 | 164.8 |
| Operating costs | $m | 20.2 | 26.9 | 52.6 |
| Gross operating costs per barrel(1) | $/bbl | 9.6 | 4.2 | 4.3 |
| Other general and administrative expenses | $m | 4.3 | 4.6 | 9.3 |
| Share option expense | $m | 2.4 | 4.4 | 7.0 |
| Adjusted EBITDA(1)(6) | $m | 51.7 | 41.1 | 111.4 |
| Profit/(loss) after tax | $m | 12.9 | (7.2) | 15.1 |
| Basic earnings/(loss) per share | cents | 5.9 | (3.3) | 7.0 |
| Revenue receipts | $m | 49.6 | 78.2 | 122.4 |
| Net capital expenditure(1)(7) | $m | 18.3 | 18.1 | 38.8 |
| Free cash flow(1) | $m | (2.0) | 24.6 | 29.1 |
| Dividends | $m | 12.5 | 25 | 50 |
| Cash and cash equivalents | $m | 61.1 | 99.0 | 78.2 |
Gulf Keystone delivered a resilient financial performance in the first half of 2026. Swift action to reduce capital expenditures and costs following the production shut-in enabled us to minimise the free cash outflow in the period, maintain a robust balance sheet and pay a semi-annual dividend of $12.5 million to shareholders in April 2026. With the recent restart of production and progress towards achieving full PSC entitlement for export sales at international prices, the Board has decided to declare a semi-annual dividend of $10 million for payment in September 2026 as we also firm up plans for investment in profitable growth.
Adjusted EBITDA
Adjusted EBITDA of $51.7 million in H1 2026 was 26% higher relative to the prior period (H1 2025: $41.1 million) as reduced production resulting from the temporary shut-in of the Shaikan Field was more than offset by lower associated operating costs and higher realised prices reflected in entitlement invoices for export sales.
Revenue based on entitlement invoices issued in 2026, a non-IFRS measure, of $82.8 million was broadly flat relative to the prior period (H1 2025: $83.1 million). Higher average realised prices of $83.5/bbl (H1 2025: $27.8/bbl) reflected in entitlement invoices for export sales largely offset the 67% decrease in gross average production to 14,600 bopd (H1 2025: 44,100 bopd) due to the shut-in of the Shaikan Field from 28 February to 23 June 2026.
Revenue on an IFRS basis in H1 2026 was $57.8 million (H1 2025: $83.1 million) which reflects an adjustment for the effective recovery of the cost oil portion of past receivables (see “Net entitlement” section below). The Group is restricted from reporting a total receivable balance in excess of the unrecovered cost oil balance (or ‘Cost Pool’) and therefore cannot recognise revenue under IFRS beyond this point. See note 4 in the financial statements for further details.
Under the interim export agreements signed in September 2025, crude pricing is linked to Dated Brent around cargo lifting windows as opposed to average monthly Brent pricing in the month of production. Realised prices for Shaikan Field crude reflect a differential to Dated Brent for the Kirkuk blend official selling price (“the Kirkuk blend OSP”) as determined by the Iraqi State Organization for Marketing of Oil (“SOMO”), with further adjustments for quality and transportation costs.
The average realised price of $83.5/bbl reflected in entitlement invoices for export sales in H1 2026 represented a discount to Dated Brent of $8.8/bbl, a significant improvement relative to the discount to Dated Brent in H1 2025 for local sales of $44.1/bbl. The discount was also lower than the discount to Dated Brent of $13.4/bbl reflected in entitlement invoices for export sales in 2025, as previously reported.
The improvement in discount to Dated Brent in H1 2026 primarily reflects higher demand for the Kirkuk blend during the period, resulting in some liftings of Kurdistan crude selling at a netback price which included a premium for the Kirkuk blend OSP. Adjustments for quality and transportation were broadly stable. It remains relatively early in the new export process to provide long-term guidance regarding the discount to Dated Brent, given the limited number of cargo liftings to date, the recent volatility in the Kirkuk blend OSP and the implementation of the independent consultant’s review.
In the first two months of 2026, gross Opex per barrel was relatively stable at $4.4/bbl compared to the prior period (H1 2025: $4.2/bbl). Following the shut-in of production operations on 28 February 2026 due to the security environment, the Company moved swiftly to reduce costs and expenditures while maintaining the ability to quickly restart production at full capacity. Operating costs in the first half of 2026 were $20.2 million, 25% lower relative to the prior period (H1 2025: $26.9 million) reflecting the production shut-in and the prompt implementation of cost reduction measures.
Other G&A expenses reduced 6% to $4.3 million (H1 2025: $4.6 million), reflecting reduced staff costs and depreciation charges in the period partially offset by non-recurring fees related to the dual listing of the Company’s shares on Euronext Growth Oslo, which was completed in February 2026. The retail offer was multiple times oversubscribed and we were pleased to welcome approximately 700 new shareholders.
Share option expense was $2.4 million in H1 2026 (H1 2025: $4.4 million), reflecting the vesting in April 2026 of a reduced number of awards associated with the 2023 LTIP relative to the vesting of the 2022 LTIP award in 2025.
Cash flows
Revenue receipts in H1 2026 were $49.6 million, reflecting cash received in the period for export sales. Revenue receipts were 36% lower relative to the prior year period (H1 2025: $78.2 million), primarily due to the impact of the production shut-in.
Under the interim export agreements, the Company has been receiving approximately $30/bbl in cash for its net entitlement of export sales. Payments have been consistent and without delay, received no later than 30 days after each crude lifting allocated to the IOC’s nominated trader at the Ceyhan oil terminal in Türkiye. Since the restart of exports in September 2025, crude liftings have typically occurred around one month following the month of production, resulting in a timing difference of around two months between production and payment for Shaikan Field sales. Due to the production shut-in from 28 February 2026, liftings for February 2026 production were delayed to April and June 2026, with payments received within 30 days of the liftings.
As at 30 June 2026, the Company had accrued a receivable for interim volumes of $11.7 million net to GKP (post Capacity Building Payment (“CBP”)) reflecting outstanding payments for production in February 2026 and between 23-30 June 2026 following the restart. An amount of $11.2 million net to GKP was paid in July and August 2026.
The Company has also accrued a top-up receivable for export sales to date under the interim agreements to account for the differential between realised prices for cash received (approximately $30/bbl) and the expected reconciliation to international prices, reflected in the realised prices for invoiced revenue, following the anticipated implementation of the independent consultant’s review. This additional receivable totalled $31.3 million net to GKP (post CBP) at year end 2025 and has since increased to $79.6 million net to GKP (post CBP) as at 30 June 2026, reflecting the Company’s net entitlement of export sales during the period.
The Company's continued expectation is that this top-up receivable, as well as increases accrued for export sales going forward under the interim export agreements, will be paid in the form of additional allocated liftings of crude and associated payments. The estimated payment timing and value of the receivable are subject to the implementation of the independent consultant’s review. The consultant’s final report has been submitted to the FGI and the Company is seeking the commencement of additional liftings in Q3 2026.
Net capital expenditure in H1 2026 was $18.3 million (H1 2025: $18.1 million) reflecting investment in safety critical facility upgrades, well workovers and the ongoing construction of water handling facilities for installation at PF-2. Almost half of the expenditure in the period took place prior to the production shut-in on 28 February 2026. Subsequently, the Company moved quickly to slow down or suspend almost all capital projects, with the exception of safety critical or highly strategic work, such as the installation of water handling facilities at PF-2.
The Company’s decisive action to reduce capital expenditures and costs following the production shut-in helped to minimise the free cash outflow in the period to $(2.0) million (H1 2025 free cash flow: $24.6 million).
Following careful consideration of the Company’s liquidity needs, outlook and ability to moderate capital expenditures and costs during the production shut-in, the Board decided in March 2026 to declare an interim dividend of $12.5 million which was paid on 27 April 2026.
The Company’s cash balance was $61.1 million as at 30 June 2026 with no debt. The reduction relative to the 31 December 2025 cash balance of $78.2 million primarily reflects the free cash outflow, dividend payment and share purchases in the period amounting to $3.6 million to satisfy the vesting of the 2023 LTIP award. Cash outflows were offset by $1.0 million of interest income and $0.9 million of placing proceeds net of fees associated with the Euronext Growth Oslo dual listing share raise.
The Company’s cash balance as at 24 August 2026 was $63.5 million, primarily reflecting payments received for production during February and June 2026, offset by ongoing capital expenditures and costs.
Net entitlement
GKP’s net entitlement of Shaikan Field sales was approximately 36% in H1 2026 for amounts invoiced during the period. The level of net entitlement reflects the Company’s monthly cost oil and profit oil entitlements, determined by the Cost Pool and R-factor. Definition of key PSC terms can be found in the Glossary at the end of this report.
As at 30 June 2026, there was $149.9 million of unrecovered cost oil for the Shaikan Contractor ($119.9 million net to GKP) in the Cost Pool, which includes capex and opex incurred while production was shut-in during the period. The R-factor, calculated as cumulative Contractor revenue receipts of $2,649 million divided by cumulative Contractor costs of $2,126 million, was 1.25 as at 30 June 2026. Both the Cost Pool and the R-factor are subject to potential cost audit by the KRG.
As the Cost Pool is reported on a cash receipt basis, it includes the cost oil portion of the outstanding October 2022 to March 2023 export sales receivable balance, as previously reported. The Company’s net entitlement in H1 2026 reflected the continued effective recovery of $25.0 million of cost oil owed to GKP from the 2022-2023 receivable balance, reducing the overall receivable balance to $97.8 million net to GKP (comprising $67.1 million cost oil and $30.7 million profit oil net to GKP post CBP) as at 30 June 2026.
The repayment of the 2022-2023 receivable balance is a component of the Company’s ongoing commercial negotiations with the MNR. These include the settlement of other KRG-related assets and liabilities and the agreement of a formal amendment to the Shaikan PSC to reflect current invoicing terms, outstanding since 2017. The negotiations continue to progress but no agreement has been reached as at the date of this report.
Should the negotiations conclude, a settlement may result in a lower Cost Pool and higher R-factor relative to the current reported levels, as well as potential material adjustments to the specific assets and liabilities on the Company’s balance sheet. See notes 12, 13 and 15 in the financial statements for further details. In the absence of a settlement, the Company expects to continue to invoice for crude sales based on the reported Cost Pool and R-factor as at 30 June 2026.
Outlook
Looking ahead to the remainder of 2026, the Company will retain its focus on disciplined capital expenditure and strict cost control as it proceeds, subject to stable production and exports, with key initiatives to enhance production and facility safety. Should the security environment deteriorate again, we retain significant flexibility to moderate expenditures and preserve cash.
Gulf Keystone remains committed to returning excess cash to shareholders via semi-annual dividend payments and opportunistic share buybacks. The Board has carefully considered the Company’s operating environment and outlook, current cash balance, ability to reduce expenditures and progress towards achieving full PSC entitlement for its export sales. Consequently, the Board has decided to declare an interim dividend of $10 million, equivalent to $0.046 per Common Share. The dividend will be paid on 28 September 2026, based on a record date of 11 September 2026 and ex-dividend date of 10 September 2026.
Gabriel Papineau-Legris
Chief Financial Officer
24 August 2026
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