Commodities● Neutral
Gulf Keystone Output Slumps but EBITDA Rises on Prices
Shaikan output fell to 14,600 bpd from 44,100 after prolonged shutdowns, but adjusted EBITDA rose 26% to $52 million on higher export prices and lower costs.
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Gulf Keystone Petroleum reported first-half adjusted EBITDA rose 26% to $52 million as higher export prices and lower operating costs offset a prolonged shutdown at its Shaikan field in the Kurdistan Region of Iraq.
Gross average output fell to 14,600 barrels per day from 44,100 a year earlier. The field was shut in from February 28 through June 23 after conflict between the U.S. and Iran disrupted the region. Chief Executive Officer Jon Harris said the company's priority was employee safety. Gulf Keystone extended its record of zero lost-time incidents to more than 3.5 years.
Production resumed on June 24 and rose above 45,000 barrels per day before a second precautionary shut-in on July 19. After the extension of interim export arrangements and an updated security assessment, output restarted on August 16. Harris said volumes were approaching 40,000 barrels per day and that well workovers were under way to restore prior levels.
Chief Financial Officer Gabriel Papineau-Legris said higher realized prices in export entitlement invoices and lower operating costs more than offset the decline in production. Operating costs fell 25% to $20 million, with the majority of the reduction coming from lower spending on diesel and chemicals during the shutdown. Before the February shut-in, operating costs were roughly $4.4 per barrel, in line with prior years.
Net capital expenditure was $18 million for the half, nearly half of it incurred before the shutdown. The company cut discretionary spending after production halted but continued safety-critical and strategic work. Free cash outflow was limited to $2 million.
The board declared a $10 million interim semi-annual dividend, payable in September 2026, following a $12.5 million dividend paid in April. Papineau-Legris said the company remained committed to returning excess cash to shareholders while preserving balance-sheet flexibility for future investment.