In the update published on 9 July, Gulf Keystone (GKP) announced sound operational performance and an improving situation with payments. Production has been consistently high, with rates of over 40mb/d achieved in June. On the key question of payments and offtake, GKP has received a second payment from the recently announced domestic contract, taking cash received to $11.6m (gross). Additionally, the company expects to start trucking to Fyshkhabour for injection into the export pipeline to Ceyhan (realising higher netbacks). Should this occur, GKP will have three avenues for offtake, and we expect it to prioritise the methods that will ensure payments. Due to the production outage in Q115 (due to irregular offtake), production guidance for 2015 has fallen to 30-34mb/d, leading to an adjusted core NAV of 55p/share (from 56p/share).
