June 22 (UPI) -- Plans outlined in agreements with the Kurdish government and Hungarian partners could boost Kurdish oil output by more than 50 percent, Gulf Keystone said.
The company said Friday it reached an agreement with the Kurdish Ministry of Natural Resources and MOL Hungarian Oil & Gas to invest enough in northern Iraqi oil plays to boost gross production capacity to 55,000 barrels of oil per day within the next year or so. Gulf Keystone said capital spending would be around $91 million, with a net $73 million to the company.
"We are very pleased with the progress we have made in recent months on key commercial and operational matters and are delighted that Gulf Keystone is now back to investment mode," Gulf Keystone CEO Jón Ferrier said in a statement.
Gulf Keystone, which has headquarters in London, was the target of an unsolicited takeover from rival Iraqi player DNO, a Norwegian oil company. In 2015, it had mulled possible partnerships, but emerged the following year with an agreement with the majority of its creditors and shareholders to restructure its debt obligations.
The company, the operator of the Shaikan field, said it averaged 31,138 bpd to May 31, slightly above its guidance for the year. Cumulative production from the field inside Kurdish territory reached a cumulative 50 million barrels.
The company ended 2017 with a cash balance of $160 million, a 72 percent improvement over 2016.
The Kurdish north was embroiled in a multifaceted risk environment last year, lending to uncertainty for operations. Gulf Keystone said some of those issues have "come at a considerable human and economic cost."