Kurdistan-focused operator Gulf Keystone has launched a new fundraising issue as it looks to cover costs of raising production levels at its large Shaikan facility.
The new $50million bond issue, which is to be consolidated with the $275million issue made last October, will be offered to investors as the company seeks to bolster its reserves and hit the 40,000 barrels of oil per day target from the discovery in Kurdistan.
Gulf Keystone, which was embroiled in a bitter boardroom feud earlier this year, said it has cash and equivalent reserves of $72million, with the new issue aimed at ensuring it has resources to fund operations until mid-2014.
“The Company believes that stable production and oil sales of between 20,000 bopd and 40,000 bopd will underpin the company’s cash-neutral approach to growing operations in the short-term, while completing its existing commitments on the Shaikan, Sheikh Adi, Ber Bahr and Akri-Bijeel blocks in 2014,” Gulf Keystone said in a statement.
“Upon achievement of stable oil production and sales in excess of 20,000 bopd, expected in early 2014, the Company intends to access long-term debt funding to take it into the next stage of its development.”
Production is expected to hit around 20,000 boed from the first three wells on the field by the end of the year, with a fourth well due to start production early next year which will double output.