Gulf Keystone annual loss widens on payments dispute

Oil producer Gulf Keystone Petroleum said its annual loss widened exponentially as it was still owed approximately $100m (£67.3m) for crude exports.

The Kurdistan-focused group saw its annual after tax loss jump from $32m to $248.2m, driven by a dispute over exports with the Kurdistan regional government, which still owes the London-listed group $100m.

The group, which is in negotiations with a number of parties over sales of assets or a takeover, said its operation in Kurdistan remained solid, with export deliveries and production uninterrupted throughout 2014.

Revenue from continuing operations jumped from $6.7m to $38.6m but it was largely offset by soaring costs, which went from $11.9m to $81.8m.

In 2014, gross production amounted to approximately 6.5m barrels compared to 496,921 barrels in the previous year, with a first production of 40,000 barrels of oil per day reached in December.

Gulf Keystone added that since the end of its financial year, it had received a $26m “pre-payment” for oil sales from its Shaikan field.

The group interim non-executive chairman Andrew Simon described 2014 as a “pivotal year” for the company, which completed the “critical transition from explorer to producer”.

"We are committed to rebuilding shareholder value,” he added.

“All avenues for doing this are being considered, including expansion plans for Shaikan."

Analysts at Westhouse Research said that while the company had managed to raise new equity and was anticipating further payments, the outlook remained uncertain.

“Short and medium term liquidity are the major risks for Gulf Keystone,” they said in a note on Thursday.

Gulf Keystone shares were down 0.69% to 38.73p at 09:37 on Thursday.