Desperate for cash, company says it’s owes $10 million after reaching production milestone.
LONDON, July 1 (UPI) — The Kurdish government of Iraq is due a bonus because of a production milestone at a northern Iraqi oil field, Gulf Keystone Petroleum said.
Gulf Keystone Petroleum, an Iraqi-focused company that lists headquarters in London, said cumulative production at its Shaikan oil field reached 25 million barrels.
“In line with the terms of the Shaikan production sharing contract, a production bonus in the amount of $10 million is due to be paid to the Kurdistan Regional Government’s Ministry of Natural Resources,” the company said in a statement.
In a note to shareholders in April, the company said it ended 2015 with an average daily production rate of 36,000 barrels of oil per day at Shaikan and the field is now on pace to reach 55,000 bpd potentially.
“To get to the next stage requires additional investment, so our priority is to strengthen the balance sheet to allow this forward move,” CEO Jon Ferrier said in a statement issued at the time.
The company estimated reaching the new target would require capital expenditures of between $71 million and $88 million, which Ferrier said was contingent upon regular payments for exports from the Kurdish government and available finances.
This week, the company said it received an $8 million payment for the crude oil it exported from the Shaikan field in May, which was a partial payment of the invoiced amount. At the end of April, the company said it reached a deal with a committee of holders of notes and bonds to enter into a “standstill agreement” on interest payments for April.
The terms of that agreement expire Friday.
Gulf Keystone Petroleum last year said it was looking for partners or potential buyers as part of a long-term strategic review.