• 5 minutes Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 11 minutes Don't Expect Too Much: Despite a Soaring Economy, America's Annual Pay Increase Isn't Budging
  • 15 minutes WTI @ 67.50, charts show $62.50 next
  • 4 hours The EU Loses The Principles On Which It Was Built
  • 4 hours Starvation, horror in Venezuela
  • 20 mins Saudi Fund Wants to Take Tesla Private?
  • 13 hours Crude Price going to $62.50
  • 2 hours Why hydrogen economics does not work
  • 1 day Anyone Worried About the Lira Dragging EVERYTHING Else Down?
  • 9 hours WSJ *still* refuses to acknowledge U.S. Shale Oil industry's horrible economics and debts
  • 3 hours Again Google: Brazil May Probe Google Over Its Cell Phone System
  • 23 hours Chinese EV Startup Nio Files for $1.8 billion IPO
  • 1 day Oil prices---Tug of War: Sanctions vs. Trade War
  • 1 day Russia retaliate: Our Response to U.S. Sanctions Will Be Precise And Painful
  • 1 day Correlation does not equal causation, but they do tend to tango on occasion
  • 1 day Monsanto hit by $289 Million for cancerous weedkiller
Iran’s Latest Tactic To Save Market Share

Iran’s Latest Tactic To Save Market Share

Iran cut oil prices for…

Oil Prices Fall On Significant Crude Build

Oil Prices Fall On Significant Crude Build

Oil prices fell on Wednesday…

Gulf Keystone Restructures To Shore Up Balance Sheet

Iraq Oil Field

The Iraqi-Kurdistan-focused energy company Gulf Keystone Petroleum has announced that it has appointed a new chairman, as the company begins a restructuring process designed to address its debt load.

Headquartered in London, Gulf Keystone’s efforts are in developing the Shaikan oil field in the northern, Kurdish region of Iraq. Gulf Keystone has said that the restructuring effort would help to boost production in the area from 40,000 to 55,000 barrels of oil per day.

As part of the restructuring plan, former chairman Andrew Simon will step aside from his position as chairman. His seat will be filled by Keith Lough.

Lough’s task will be finding a way to convert $500 million in debt. Simon commented that shareholders and operators in the area have had difficulty coping with lower oil prices and Gulf Keystone’s $600 million debt load.

CEO Jon Ferrier commented: “Without the restructuring and the improved liquidity delivered by the transaction, the company cannot avoid insolvency or capture the significant future potential of the Shaikan field," The restructuring should lower Gulf Keystone’s debt from $600 million to $100 million.

In the restructuring plan, the holders of the $250 million bond will retain $100 million in reinstated notes and have a 65.5 percent share of the company’s ownership. Those who own $325 million in convertible bonds will have 20 percent ownership.

Related: India Taking Advantage Of Crude’s Weakness

At the same time, the company is also being taken over by its bondholders in the wake of Gulf-Keystone’s announcement that it would exchange the $500 million in debt for shares. The move would severely impact its equity shareholders. Current shareholders would be reduced to five percent ownership after the exchange.

Some of those shareholders include Capital Group, Prudential, Barclays and BlackRock. Sources indicate that London firm Sothic Capital was set to acquire a major stake in Gulf Keystone. Other players who would pick up large parts of the company include GLG Partners and Taconic Capital.

Low oil prices and an ongoing feud with the Iraqi central government over federal budget payments to the Kurdistan Regional Government (KRG) and the KRG’s unilateral oil exports have made it difficult for the Kurdish authorities to pay their producers on time.

In late May, Gulf Keystone received a US$6 million partial payment for their products, causing its London-listed stock to slip.

The KRG controls some 12 billion barrels of oil on its territory, with an upside potential of 60 billion barrels, and estimated reserves of some 45 billion barrels, along with 22 trillion cubic feet of natural gas.

Lincoln Brown for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News