2025 Half Year Results Announcement

28 August 2025

Gulf Keystone Petroleum Ltd. (LSE: GKP)

(“Gulf Keystone”, “GKP”, “the Group” or “the Company”)

2025 Half Year Results Announcement

Gulf Keystone, a leading independent operator and producer in the Kurdistan Region of Iraq, today announces its results for the half year ended 30 June 2025.

Jon Harris, Gulf Keystone’s Chief Executive Officer, said:

“We delivered strong operational and financial performance in the first half of 2025, with material free cash flow generated from increased production and realised prices, capital discipline and cost control. Following the temporary shut-in of the Shaikan Field in July related to security concerns, production restarted earlier this month after consultation with the Kurdistan Regional Government and has gradually ramped back up towards full well capacity. Given the return to stable sales and our robust cash balance, we are pleased to announce today the declaration of a $25 million interim dividend, increasing total dividends declared in 2025 to $50 million.

Looking ahead, we have tightened 2025 gross average production guidance to 40,000 - 42,000 bopd primarily reflecting the production losses from recent temporary disruptions. We are excited to have sanctioned the installation of water handling facilities at PF-2 which we expect, once operational, to unlock incremental production above the anticipated field baseline and reduce downside risk to reservoir recovery. We continue to engage with government stakeholders regarding the restart of Kurdistan crude exports, with increasing momentum towards a solution in recent weeks.”

Highlights to 30 June 2025 and post reporting period

Operational

• Zero Lost Time Incidents for over 950 days with rigorous focus on safety maintained
• Gross average production increased 12% to 44,100 bopd in H1 2025 (H1 2024: 39,252 bopd), reflecting consistently robust local market demand and good reservoir performance
• Gross average production of c.40,600 bopd in 2025 year to date (as at 26 August 2025):
  • Primarily reflects precautionary field shut-in in July following drone attacks on certain other oil fields in Kurdistan
  • Production has gradually returned towards full well capacity after operations were restarted in August following a security assessment and consultation with the Kurdistan Regional Government (“KRG”)
  • Realised prices have averaged around $27-$28/bbl in the post reporting period
• Continued execution of disciplined work programme focused on safely maintaining existing production capacity and reliability
• Investment decision taken on installation of water handling facilities at PF-2:
  • Commissioning expected at the beginning of 2027
  • Once operational, the facilities are expected to unlock an estimated 4,000 - 8,000 bopd of incremental gross production above the anticipated field baseline while reducing reservoir risk
  • To minimise upfront capital expenditure and provide flexibility, the facilities will be leased over multiple years following commissioning, with limited incremental net capex expected in 2025

Financial

• Free cash flow generation of $24.6 million in H1 2025 (H1 2024: $26.6 million), enabled by increased production and realised prices, capital discipline and cost control
• Adjusted EBITDA increased 13% to $41.1 million (H1 2024: $36.4 million) as higher production, stronger prices and lower other G&A expenses offset the increase in operating costs and share option expense:
  • Revenue increased 17% to $83.1 million (H1 2024: $71.2m) as strong production was bolstered by a 6% increase in the average realised price during the period to $27.8/bbl (H1 2024: $26.3/bbl)
  • Gross operating costs per barrel of $4.2/bbl were flat (H1 2024: $4.2/bbl), with the decrease from the 2024 average of $4.4/bbl primarily reflecting higher production
• Net capital expenditure of $18.1 million (H1 2024: $7.8 million) reflecting the Company’s focused work programme of safety critical upgrades at PF-2 and production optimisation expenditures:
  • Includes a non-cash charge of $5.4 million associated with the capitalisation of drilling inventory previously classified as held for sale
• Interim dividend of $25 million paid in H1 2025 (H1 2024 shareholder distributions: $21 million)
• Cash balance of $99.0 million as at 30 June 2025 (31 December 2024: $102.3 million), with no outstanding debt; latest balance as at 27 August 2025 of $105.7 million

Outlook

• 2025 gross average production expected to be between 40,000 – 42,000 bopd (previous guidance: 40,000 - 45,000 bopd), reflecting production losses from the recent temporary disruptions:
  • Guidance remains subject to local sales demand and a stable security environment
• 2025 net capital expenditure expected to be $30-$35 million (previous guidance: $25-$30 million):
  • Unchanged expectation of c.$20 million net capex on PF-2 safety upgrades and maintenance and $5-$10 million on production optimisation initiatives
  • Increase in guidance primarily reflects the incremental net capex associated with the water handling project
• Unchanged guidance for operating costs of $50-$55 million and other G&A expenses below $10 million
• The Company is pleased to declare a $25 million interim dividend, equivalent to 11.52 US cents per Common Share based on the Company's total issued share capital as at 27 August 2025:
  • The dividend will be paid on 30 September 2025, based on a record date of 12 September 2025 and ex-dividend date of 11 September 2025
  • Shareholders will have the option of being paid the dividend in either GBP or USD, with the default currency GBP
• The Company continues to engage with government stakeholders regarding a solution to enable the restart of Kurdistan crude exports through the Iraq-Türkiye Pipeline:
  • The Company remains ready to resume oil exports provided satisfactory agreements are reached on payment surety for future oil exports, repayment of outstanding receivables and preservation of current contract economics

Investor & analyst presentation

GKP’s management team will be hosting a presentation for investors and analysts at 10:00am (BST) today via live audio webcast:

https://brrmedia.news/GKP_GY_25      

Sell-side analysts are requested to join the meeting via the dial-in details provided to them separately and ask questions verbally. Investors are encouraged to pre-submit written questions via the webcast registration page, with the opportunity to submit questions live during the presentation.

A recording of the presentation will be made available on GKP’s website.

This announcement contains inside information for the purposes of the UK Market Abuse Regime.

Enquiries:

or visit: www.gulfkeystone.com

Notes to Editors:

Gulf Keystone Petroleum Ltd. (LSE: GKP) is a leading independent operator and producer in the Kurdistan Region of Iraq. Further information on Gulf Keystone is available on its website: www.gulfkeystone.com 

Disclaimer

This announcement contains certain forward-looking statements that are subject to the risks and uncertainties associated with the oil & gas exploration and production business. These statements are made by the Company and its Directors in good faith based on the information available to them up to the time of their approval of this announcement but such statements should be treated with caution due to inherent risks and uncertainties, including both economic and business factors and/or factors beyond the Company's control or within the Company's control where, for example, the Company decides on a change of plan or strategy. This announcement has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. This announcement should not be relied on by any other party or for any other purpose.

CEO review

The Company performed well in the first half of 2025, with consistently robust local market demand and good reservoir performance enabling increased production relative to the prior year period. Capital and cost discipline continued to underpin free cash flow generation and shareholder distributions. While temporary market disruption and security concerns impacted sales in June and July respectively, production has gradually returned towards full well capacity in August. We have also seen increased momentum towards an exports restart solution in our engagement with government stakeholders in recent weeks.

We have maintained a rigorous focus on safety in 2025 year to date, extending our track record of days without a Lost Time Incident to over 950.

Gross average production in the first half of 2025 was 44,100 bopd, a 12% increase relative to H1 2024. Local market demand for Shaikan Field crude was consistently strong between January to May 2025, enabling monthly gross average production above 45,000 bopd. Sales reduced in June because of trucking shortages around the Eid Al-Adha holiday and some disruptions during the conflict between Israel and Iran. Average realised prices in H1 2025 were relatively healthy at $27.8/bbl, 6% higher compared to the prior year period. The Company’s ability to meet buyer demand was enabled by good reservoir performance, with successful production optimisation initiatives offsetting natural field declines and well maintenance.

Gross production has averaged c.40,600 bopd in the year to date as at 26 August 2025, with the reduction relative to the first half average primarily reflecting the temporary shut-in of the Shaikan Field on 15 July 2025 following drone attacks on a number of oil fields close to our operations and elsewhere in Kurdistan. The safety of Gulf Keystone’s staff is always our top priority and we acted quickly to move employees and contractors to safe locations. Earlier this month, the Company restarted production operations following a security assessment and consultation with the KRG. Following a gradual ramp up, production levels have returned towards full well capacity.

The Company has continued to execute its disciplined work programme, progressing safety upgrades at PF-2 and executing production optimisation initiatives. As previously announced, the planned shut-in of PF-2 that had been scheduled to take place in Q4 2025 to tie-in the safety upgrades was deferred to 2026 to support production and provide greater work programme flexibility.

Increased production, stronger prices and continued capital and cost discipline enabled the Company to generate $24.6 million of free cash flow in the first half of 2025. In line with our commitment to return excess cash to shareholders, we paid a $25 million interim dividend in April.

The Company has recently sanctioned the installation of water handling facilities at PF-2. Engineering design work has commenced and commissioning is currently expected at the beginning of 2027.

Once operational, the facilities are expected to unlock an estimated 4,000 - 8,000 bopd of incremental gross production above the anticipated field baseline from existing constrained wells and reduce downside risk to reservoir recovery. The facilities will add additional wet oil processing capacity of around 17,000 bopd to the Shaikan Field’s existing dry oil processing capacity of around 60,000 bopd. While there are no indications of a near term increase in water ingress following an extraordinary track record of dry oil production to date of over 145 MMstb, we have long viewed water handling as a critical component of the Shaikan Field’s development and natural life cycle.

To reduce costs, we have sourced second hand facilities and are combining them with an existing oil train at PF-2. To minimise upfront capital expenditure and provide flexibility, the facilities will be leased over multiple years following commissioning. Limited incremental net capital expenditure is expected in 2025, with total costs during the construction phase ahead of commissioning estimated at approximately $12 million net to GKP. The facilities are expected to generate positive cash flow, even in a local sales environment, with future operating costs associated with the lease and water disposal expected to be more than covered by the anticipated incremental production.

Looking ahead to the remainder of the year, we are expecting 2025 gross average production to be between 40,000 - 42,000 bopd (previous guidance: 40,000 - 45,000 bopd), reflecting the impact of the temporary disruptions experienced from June to August. We continue to progress our production optimisation programme, with additional well workovers planned in the second half of the year, while managing natural field declines and certain wells constrained by water and gas. The guidance remains subject to local sales demand and a stable security environment.

2025 net capital expenditure is expected to be $30-$35 million (previous guidance: $25-$30 million), primarily reflecting the incremental capex associated with water handling.

The Company, along with other international oil companies (“IOCs”) operating in Kurdistan, has been continuing to engage with government stakeholders and other relevant parties regarding the restart of Kurdistan exports. The past few weeks have been characterised by increased levels of activity as we focus on securing written agreements. We are hopeful of reaching a solution soon and remain ready to restart exports quickly.

Jon Harris

Chief Executive Officer

27 August 2025

Financial review

Key financial highlights