Kurdish oil developer says it's primed for growth

April 6 (UPI) -- Gulf Keystone Petroleum, an operator in the Kurdish north of Iraq, said in a regular update to shareholders it's "primed for future development."

Gulf Keystone said the average production from its flagship Shaikan oil field in the Kurdish north of Iraq was 34,749 barrels per day, at the upper end of its guidance. Production during the first quarter averaged 36,293 bpd.

The company, which has headquarters in London, was the target of an unsolicited takeover from rival Iraqi player DNO, a Norwegian oil company. In 2015, Gulf Keystone mulled possible partnerships, but emerged last year with an agreement with the majority of its creditors and shareholders to restructure its debt obligations

CEO Jon Ferrier said the company is stabilizing and looking forward to a stronger future.

"We are cash flow positive with a healthy current cash balance of $112.7 million as of April 5, so we are primed for future development," he said in a statement.

His announcement came as regional counterpart Genel Energy said it was looking for growth from the natural gas assets in the Kurdish north, after coming off a rough year in 2016. Lower crude oil prices last year meant poor returns for the exploration and production sector, operations near flagship production facilities in the Kurdish north of Iraq were clouded by security challenges and production from its regional Taq Taq field moved sharply lower in part because of reserve downgrades.

For Gulf Keystone, the company stated it has the funding necessary to move regional production to 40,000 bpd and could potentially hit 55,000 bpd in northern Iraq.

The company stressed, however, that it was in discussions with the Kurdish government about commercial and contraction conditions. Payments from the Kurdish government have been an issue in the past and, provided discussions with the government yield satisfactory results, further investments in the region will continue.