Gulf Keystone raises $200m in rights issue

City A.M. Reporter
KURDISTAN-FOCUSED explorer Gulf Keystone said it raised $200m (£127m) in a placing to help accelerate the development of the massive oil discoveries it has made in the semi-autonomous region of Iraq.

The company said yesterday it issued 91m new shares in an oversubscribed placing at a price of 140p, representing a 14 per cent discount to Monday’s closing price.

Gulf Keystone, which confirmed that it was considering its options with regards to a fundraising earlier in the week, said the proceeds would be used to fund an aggressive exploration and appraisal programme in Kurdistan where it has found at least 12bn barrels of oil so far.

The company is planning to build a pipeline from its Shaikan oil field to the vital Kirkuk-Ceyhan export pipeline, which transports some 500,000 barrels per day of crude from northern Iraq to Turkey.

Cash will also be spent on a development plan for the field, upgrading production facilities at Shaikan and drilling another well on its Sheikh Adi oil field.

The company, which is seeking a move to London’s main market from the junior alternative investment market, also plans to raise additional funds from selling a minority interest in one of its Kurdistan blocks.

Kurdistan has enjoyed a surge of investment in the past year as relations between its regional government and Iraq’s national government in Baghdad improved. BP’s former boss Tony Hayward staged a reverse takeover of Turkish explorer Genel Energy earlier this month to create a Kurdistan-focused group worth $4bn.

Shares in Gulf Keystone closed down six per cent at 152.5p yesterday, valuing the company at £1.2bn.