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Gulf Keystone Petroleum Limited (GB:GKP)
LSE:GKP

Gulf Keystone Petroleum (GKP) AI Stock Analysis

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Gulf Keystone Petroleum

(LSE:GKP)

Rating:71Outperform
Price Target:
179.00p
▲(11.88%Upside)
Gulf Keystone Petroleum's overall score reflects strong operational performance and cash flow improvements, supported by a robust earnings call. However, high valuation metrics and profitability challenges, along with uncertainties in export restart, moderate the score.

Gulf Keystone Petroleum (GKP) vs. iShares MSCI United Kingdom ETF (EWC)

Gulf Keystone Petroleum Business Overview & Revenue Model

Company DescriptionGulf Keystone Petroleum Limited engages in the exploration, evaluation, and production of oil and gas properties in the Kurdistan Region of Iraq and the United Kingdom. The company operates Shaikan field that covers an area of 280 square kilometers, which is located north-west of Erbil. It also provides management, support, geological, geophysical, and engineering services. The company was incorporated in 2001 and is based in Hamilton, Bermuda.
How the Company Makes MoneyGulf Keystone Petroleum makes money primarily through the exploration, extraction, and sale of crude oil from its flagship Shaikan oil field. The company's revenue model is based on the production and sale of oil, which is marketed and sold to international buyers. Key revenue streams include the sale of crude oil under long-term contracts and spot sales, depending on market conditions. Significant factors contributing to its earnings include the production volume, global oil prices, and the efficiency of its operations in extracting and delivering oil to market. GKP's financial performance is also influenced by its partnerships with local and international stakeholders, including the Kurdistan Regional Government, which impact the company's operational and fiscal environment.

Gulf Keystone Petroleum Earnings Call Summary

Earnings Call Date:Mar 20, 2025
(Q4-2024)
|
% Change Since: -15.82%|
Next Earnings Date:Aug 28, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive operational and financial performance for 2024, with significant improvements in production and financial metrics. Shareholder returns were resumed, and cost control measures were effective. However, challenges remain regarding the restart of pipeline exports and achieving higher realized prices. The company's outlook for 2025 is optimistic, with continued production guidance and cost management.
Q4-2024 Updates
Positive Updates
Strong Operational Performance
In 2024, Gulf Keystone returned to consistently strong production levels with volumes almost doubling, supported by a full year of local sales. They achieved this with zero lost time incidents and have been operating almost 800 days without a lost time injury.
Financial Improvements
Adjusted EBITDA increased by 52% to $76 million in 2024, driven by an 86% increase in gross average production. Free cash flow generation was strengthened, resulting in a $65 million inflow, compared to a $13 million outflow in the previous year.
Shareholder Returns
Shareholder distributions resumed with $45 million distributed in 2024, including a $25 million interim dividend in April 2025. The total shareholder return was 24% for 2024.
Low Operating Costs
Gross OpEx per barrel decreased by 21% to $4.4 per barrel, maintaining Gulf Keystone's position as a leading low-cost operator among peers.
Positive Outlook for 2025
For 2025, the company reiterates guidance for average production of 40,000 to 45,000 barrels of oil per day, with stable local sales demand and ongoing cost control.
Negative Updates
Challenges in Export Restart
Discussions with the Kurdistan Regional Government and the Federal Government of Iraq regarding the restart of pipeline exports remain inconclusive, and the company is still seeking agreements on payment surety, receivables repayment, and contract terms.
Reduced Realized Prices
Realized prices averaged around $27 per barrel in 2024, reflecting the transition to discounted local sales and the absence of international pricing.
Operational Disruptions
Production was temporarily disrupted by a lack of trucks during regional holidays and politically motivated road closures related to regional elections in Kurdistan.
Company Guidance
In the 2024 call, Gulf Keystone reported a robust operational and financial performance, with gross average production reaching 40,689 barrels of oil per day and a peak of 48,500 barrels in September. The company successfully generated $65 million in free cash flow, driven by a 52% increase in adjusted EBITDA to $76 million and a 69% reduction in net capital expenditure to $18 million. Shareholder distributions resumed with a total of $45 million, including a $25 million interim dividend. The company maintained a cash balance of $115 million as of the call date. Looking forward to 2025, Gulf Keystone reiterated its production guidance of 40,000 to 45,000 barrels per day, contingent upon stable local market demand, and outlined plans for $25 million to $30 million in net CapEx focused on maintenance and production optimization. The company also engaged in ongoing discussions with the Kurdistan and Iraqi governments about restarting pipeline exports, which could significantly enhance cash flow and shareholder value.

Gulf Keystone Petroleum Financial Statement Overview

Summary
Gulf Keystone Petroleum shows strong revenue growth and cash flow stability with low debt levels. However, profitability remains a challenge due to a low net profit margin and historical volatility in financial performance.
Income Statement
62
Positive
Gulf Keystone Petroleum displayed a significant revenue growth of 22.4% from 2023 to 2024, alongside improvements in EBIT and EBITDA margins. However, the net profit margin remains low at 4.7%, indicating challenges in converting revenue to profit. Historical volatility in revenue and profitability is a concern, although recent trends suggest recovery.
Balance Sheet
75
Positive
The company has a strong equity base with an equity ratio of 76.7% in 2024, indicating financial stability. The debt-to-equity ratio is minimal, reflecting low leverage. The return on equity at 1.4% is modest, highlighting room for improvement in generating returns for shareholders.
Cash Flow
80
Positive
Cash flow from operations increased significantly, with a strong operating cash flow to net income ratio of 13.1 in 2024. The free cash flow growth rate improved remarkably compared to previous years, indicating better cash management. However, historical fluctuations in free cash flow warrant caution.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
151.21M123.51M460.11M301.39M108.45M
Gross Profit
20.53M8.18M299.50M196.73M-19.83M
EBIT
4.70M-13.04M273.54M174.60M-33.38M
EBITDA
88.27M32.43M355.17M230.21M48.93M
Net Income Common Stockholders
7.16M-11.50M266.09M164.60M-47.34M
Balance SheetCash, Cash Equivalents and Short-Term Investments
102.35M81.71M119.46M169.87M147.83M
Total Assets
667.68M697.15M744.36M764.26M658.51M
Total Debt
1.51M398.00K710.00K100.33M104.77M
Net Debt
-100.84M-81.31M-118.75M-69.53M-43.06M
Total Liabilities
155.35M149.91M171.43M242.55M204.49M
Stockholders Equity
512.33M547.24M572.92M521.70M454.02M
Cash FlowFree Cash Flow
65.94M-14.06M266.94M122.85M-21.58M
Operating Cash Flow
93.54M51.32M374.30M178.53M36.78M
Investing Cash Flow
-27.60M-63.94M-107.36M-55.68M-58.36M
Financing Cash Flow
-45.47M-25.32M-317.25M-100.69M-21.48M

Gulf Keystone Petroleum Technical Analysis

Technical Analysis Sentiment
Positive
Last Price160.00
Price Trends
50DMA
155.76
Positive
100DMA
166.58
Negative
200DMA
147.27
Positive
Market Momentum
MACD
1.10
Negative
RSI
53.31
Neutral
STOCH
58.37
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:GKP, the sentiment is Positive. The current price of 160 is above the 20-day moving average (MA) of 158.23, above the 50-day MA of 155.76, and above the 200-day MA of 147.27, indicating a bullish trend. The MACD of 1.10 indicates Negative momentum. The RSI at 53.31 is Neutral, neither overbought nor oversold. The STOCH value of 58.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:GKP.

Gulf Keystone Petroleum Peers Comparison

Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
GBGKP
71
Outperform
£350.68M63.371.32%8.21%18.76%
58
Neutral
$7.58B3.29-4.46%10.00%0.84%-49.61%
$212.44M-15.72%
GBCNE
56
Neutral
£160.67M17.20-3.25%-28.38%90.60%
49
Neutral
£309.18M-4.37%-100.00%
GBRKH
£334.86M28.476.97%
GBTLW
72
Outperform
£268.28M5.76
-11.70%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:GKP
Gulf Keystone Petroleum
160.00
28.60
21.77%
GEGYF
Genel Energy
0.73
-0.49
-40.16%
GB:CNE
Capricorn Energy PLC
226.50
43.50
23.77%
GB:PANR
Pantheon Resources
27.30
2.65
10.75%
GB:RKH
Rockhopper Exploration
50.40
35.85
246.39%
GB:TLW
Tullow Oil
18.10
-13.70
-43.08%

Gulf Keystone Petroleum Corporate Events

Executive/Board ChangesShareholder Meetings
Gulf Keystone Petroleum Secures Shareholder Approval at 2025 AGM
Positive
Jun 20, 2025

Gulf Keystone Petroleum Ltd. announced that all resolutions proposed at its 2025 Annual General Meeting were approved by shareholders. This includes the reappointment of directors and the approval of the company’s remuneration policy, signaling strong shareholder support and stability in its governance structure.

The most recent analyst rating on (GB:GKP) stock is a Hold with a £1.20 price target. To see the full list of analyst forecasts on Gulf Keystone Petroleum stock, see the GB:GKP Stock Forecast page.

Shareholder Meetings
Gulf Keystone Petroleum Announces Virtual 2025 AGM Details
Neutral
May 15, 2025

Gulf Keystone Petroleum Ltd. has announced the details of its 2025 Annual General Meeting (AGM), which will be held via webcast on June 20, 2025. The company has published the Notice of Meeting and related documents, encouraging shareholders to vote in advance and appoint the Chairman as their proxy. This virtual AGM format allows all shareholders to participate and engage with the company’s strategic direction and governance.

The most recent analyst rating on (GB:GKP) stock is a Buy with a £190.00 price target. To see the full list of analyst forecasts on Gulf Keystone Petroleum stock, see the GB:GKP Stock Forecast page.

Business Operations and Strategy
Gulf Keystone Petroleum Announces 2025 LTIP Awards
Neutral
Apr 4, 2025

Gulf Keystone Petroleum Ltd. has announced the granting of awards under its 2024 Long Term Incentive Plan (LTIP) to employees and key management personnel. The awards, based on the company’s stock price as of March 31, 2025, are designed to vest over three years, contingent upon meeting specific performance conditions related to total shareholder return. This initiative aims to align the interests of the management and employees with those of the shareholders, potentially impacting the company’s operational focus and stakeholder engagement.

Business Operations and StrategyRegulatory Filings and Compliance
Gulf Keystone Petroleum’s 2024 Government Payments Report Highlights Transparency and Community Support
Positive
Apr 2, 2025

Gulf Keystone Petroleum Ltd. has released its report on payments to governments for the year 2024, detailing the financial transactions made to the Kurdistan Regional Government (KRG) under the Shaikan Production Sharing Contract. The report highlights that the company made significant in-kind payments, including production entitlements and royalties, amounting to a total of $175,080,000. These payments reflect the company’s ongoing commitment to transparency and compliance with UK regulations. Additionally, Gulf Keystone has contributed to local community support initiatives, enhancing its operational impact and stakeholder relations in the region.

Executive/Board ChangesBusiness Operations and Strategy
Gulf Keystone Petroleum Issues Deferred Bonus Plan Awards
Neutral
Apr 1, 2025

Gulf Keystone Petroleum Ltd. announced the issuance of awards under its Deferred Bonus Plan (DBP) for executive directors, with 30% of their annual bonus being paid in the form of nil cost options. These options will vest after three years, provided the executives remain employed with the company. The CEO, Jon Harris, received 67,810 awards, and the CFO, Gabriel Papineau-Legris, received 21,801 awards. This move aligns with the company’s strategy to retain top management and ensure long-term commitment.

Dividends
Gulf Keystone Announces $25 Million Interim Dividend with Currency Options
Positive
Mar 24, 2025

Gulf Keystone Petroleum Ltd. has announced a $25 million interim dividend, scheduled to be paid on 23 April 2025. Shareholders can elect their preferred currency for the dividend payment by 7 April 2025, with the default being GBP. This announcement underscores Gulf Keystone’s financial stability and commitment to returning value to its shareholders.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.