Cash needed to keep Kurdish oil flowing

LONDON, April 14 (UPI) -- Northern Iraqi oil player Gulf Keystone Petroleum said Thursday it was looking for a cash infusion in order to keep its production levels steady.

The company warned that, without additional capital spending, the output from its Shaikan oil field in the Kurdish north of Iraq would start to experience natural declines as early as this year. With cash paid of the Kurdish government for oil exports, the company said it was still short on the capital needed to keep production steady.

"We are working to achieve the best possible way to restructure our balance sheet," CEO Jon Ferrier said in a statement." Addressing our funding needs will ensure the company's longer term future and ability to continue developing the Shaikan field for the benefit of all our stakeholders."

The company, which has headquarters in London, started sounding the alarm last month, with Ferrier saying "strenuous efforts" were underway to ensure operations were moving toward the goal of returns on investments and increased production.

The company last year averaged 30,500 barrels of oil per day and said it could maintain levels at 40,000 bpd, provided regular payments from the Kurdish government are made and finances are available. The company was short of the necessary capital to keep output steady by around 3 percent and 27 percent short of the funds necessary to raise production to its target rate of 55,000 bpd.

The company has already relinquished non-core assets in the Kurdish north and was still working to "aggressively manage" its costs.

Gulf Keystone Petroleum last year said it was looking for partners or potential buyers as part of a long-term strategic review.

"The additional detail on the potential interim investment scenarios being released today ensures an orderly market, and represents an important step as we prepare to embark upon detailed discussions with stakeholders," Ferrier said.