LONDON, April 29 (UPI) -- Iraq-focused Gulf Keystone Petroleum said Friday it reached an agreement with bondholders to delay making interest payments while it seeks debt restructuring.
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 agreement includes the bulk of the company's bondholders, though they represent less than 75 percent of total holders.
"The purpose of the standstill agreement is to provide the company with an extended period to continue the stakeholder discussions beyond the expiry of the grace periods for the April 2016 coupon payments," it explained in a statement.
The company, which has headquarters in London, started sounding the alarm last month, with CEO Jon Ferrier saying "strenuous efforts" were underway to ensure operations in the Kurdish north of Iraq were moving toward the goal of returns on investments and increased production.
The company said it was about 3 percent short of the necessary capital to keep output steady 27 percent short of the funds necessary to raise production to its target rate of 55,000 barrels of oil per day.
The company has already relinquished non-core assets in the Kurdish north and was still working to "aggressively manage" its costs. The company over the past few months has been supported by payments from the Kurdish government for oil exports from its Shaikan development, but said new capital was needed to lay a foundation for future growth.
Gulf Keystone Petroleum last year said it was looking for partners or potential buyers as part of a long-term strategic review.
"A further announcement will be made in due course," it said in its Friday statement.