DJ 2025 Full Year Results Announcement
Gulf Keystone Petroleum Ltd (GKP)
2025 Full Year Results Announcement
19-March-2026 / 07:00 GMT/BST
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19 March 2026
Gulf Keystone Petroleum Ltd. (LSE & OSE: GKP)
("Gulf Keystone", "GKP", "the Group" or "the Company")
2025 Full Year Results Announcement
Gulf Keystone, a leading independent operator and producer in the Kurdistan Region of Iraq, today announces its results
for the full year ended 31 December 2025.
Jon Harris, Gulf Keystone's Chief Executive Officer, said:
"We delivered a strong operational and financial performance in 2025 in line with guidance and another year of zero
Lost Time Incidents. Free cash flow generation enabled the continued execution of our strategy as we balanced
investments in production enhancing projects with USD50 million of dividends. Kurdistan pipeline exports restarted in
September 2025, representing a significant milestone for the Company and broader industry.
We started 2026 positively, with production increasing above 44,000 bopd towards the end of February and consistent
export payments generating cash flow. We have also been making good progress towards a return to international prices,
with lower discounts to Brent visible in 2025 export invoices.
Since the outbreak of the regional conflict, we have shut-in the Shaikan Field as a precaution and taken measures to
protect staff. We have also suspended 2026 guidance until production restarts. We are hopeful that the security
situation will stabilise soon and we are ready to quickly restart production and exports once it is safe to do so. We
are in a strong position to navigate the disruptions, with a robust, debt-free balance sheet and significant
flexibility to reduce expenditures.
Following careful consideration of these factors and the current outlook, the Board has approved the declaration of a
USD12.5 million interim dividend. I would like to thank all of GKP's staff, shareholders and broader stakeholder base for
their continued support at this challenging time."
Highlights to 31 December 2025 and post reporting period
Operational
-- Strong operational delivery in 2025:
- Gross average production of 41,560 bopd, up 2% relative to the prior year (2024: 40,689 bopd) and towards the
top end of tightened 40,000 - 42,000 bopd guidance range
- Successful transition from trucking sales to pipeline exports via the Iraq-Türkiye Pipeline ("ITP") on 27
September 2025
- Sanction of water handling facilities at PF-2 to unlock future production growth and reduce reservoir risk
- Safe operations, with zero Lost Time Incidents for over three years despite busy work programme and security
disruptions
-- Gross average production of c.41,300 bopd in 2026 year to 28 February:
- Gross average production had increased above 44,000 bopd towards the end of February 2026 reflecting the
successful completion of well workovers and interventions
-- On 28 February 2026, the Shaikan Field was shut in as a safety precaution following the strikes by the US and
Israel on Iran and the subsequent retaliatory strikes in the Middle East, including in Kurdistan
- Gross average production of c.32,100 bopd in 2026 year to 17 March, with estimated annualised losses to date
from the shut-in of approximately 840 bopd a week
- The Company is ready to restart production and exports quickly with an improvement in the security environment
Shaikan Field estimated reserves
-- The Company estimates gross 2P reserves of 416 MMstb as at 31 December 2025 (31 December 2024 internal estimate:
443 MMstb)
- Reduction relative to prior year reflects gross production of 15 MMstb in 2025 and minor revisions of 12 MMstb
Financial
-- Strong financial performance, with disciplined investment in production enhancing projects, strict cost control and
free cash flow generation underpinning shareholder distributions
-- Revenue based on sales invoices, a non-IFRS measure, increased 28% to USD193.1 million (2024 revenue: USD151.2
million), reflecting the production increase and average realised price of USD33.9/bbl (2024: USD26.8/bbl)
- Average realised price of USD50.5/bbl for 2025 exports sales, a significant improvement on the price achieved
from 2025 local sales of USD27.6/bbl and representing a USD13.4/bbl discount to Dated Brent
- Cash receipts for 2025 exports sales equated to USD30/bbl as per the interim exports agreements
-- Adjusted EBITDA up 46% to USD111.4 million in 2025 (2024: USD76.1 million), driven by resilient production, cost
control in line with guidance and the sharp increase in realised prices visible in exports sales invoices
- Stable gross Opex per barrel of USD4.3/bbl relative to prior year (2024: USD4.4/bbl), with 18% reduction in other G
&A expenses to USD9.3 million (2024: USD11.4 million)
-- Net capital expenditure of USD38.8 million (2024: USD18.3 million), in line with guidance and reflecting investment in
PF-2 safety upgrades, well workovers and initial expenditure on PF-2 water handling installation
-- Free cash flow of USD29.1 million (2024: USD65.4 million), with the increase in Adjusted EBITDA offset by incremental
net capex and a working capital outflow related to 2025 exports sales receivables
- 2025 exports sales receivables reflect the timing difference of around two months between production and
payment and the differential between invoiced realised prices and cash receipts of USD30/bbl
- The amounts receivable at the year-end related to the timing difference of exports sales have since been
collected as expected in 2026
-- USD50 million returned to shareholders in 2025 through semi-annual dividend payments in April and September
-- 2025 year-end cash balance of USD78.2 million (31 December 2024: USD102.3 million) and no debt
- Cash balance as at 18 March 2026 of USD89.1 million reflecting consistent payments for exports sales in the year
to date
Dual listing on Euronext Growth Oslo
-- On 18 February 2026, the Company's shares began trading on Euronext Growth Oslo operated by the Oslo Stock Exchange
("OSE")
-- Arrangements are being progressed to enable cross-border transfers of the Company's shares between Euronext Growth
Oslo and the London Stock Exchange ("LSE") on or around 1 April 2026
Outlook
-- Considering the deterioration of the regional security environment and the production shut-in, the Company has
placed under review its previous 2026 gross average production guidance of 37,000 - 41,000 bopd
-- The Company has also suspended its previous 2026 net capex, net operating costs and other G&A expenses guidance
(respectively USD40-USD50 million, USD55-USD60 million and less than USD10 million)
-- The Company retains a robust balance sheet and significant flexibility to reduce its work programme and cost base
if the production shut-in persists
-- The current interim exports agreements, which expire on 31 March 2026, are expected to be extended while a review
by an international independent consultant of exports invoices and contractual costs progresses
- On completion of the review, the Company anticipates a reconciliation to full PSC entitlement at international
prices, both for future sales and volumes sold under the interim agreements, as well as the negotiation of
longer-term exports agreements
-- The Company continues to progress its negotiations with the Kurdistan Regional Government ("KRG") regarding a
number of historical Shaikan commercial matters, including the settlement of past oil sales arrears and other
KRG-related assets and liabilities
Shareholder distributions
-- Gulf Keystone remains committed to distributing excess cash to shareholders according to its established approach
to shareholder returns:
- The Board reviews the Company's capacity to pay a dividend on a semi-annual basis, considering the liquidity
needs of the business and the operating environment and
- share buybacks are considered opportunistically throughout the year
-- Consistent payments for export sales have continued in 2026 to date, demonstrating the viability of the new export
arrangements and generating positive cash flow. However, the recent deterioration in the regional security
environment has impacted production and the Shaikan Field remains shut-in as a precautionary measure
-- The Board has carefully considered these factors, the current security outlook, the Company's debt-free balance
sheet and ability to reduce capex and costs. Consequently, it has decided to declare an interim dividend of USD12.5
million, equivalent to USD0.0575 per Common Share
- The dividend will be paid on 27 April 2026, based on a record date of 10 April 2026 and ex-dividend date of 9
April 2026
-- The Board intends to review the feasibility of a supplementary dividend payment following a restart of production,
exports and payment receipts
Investor & analyst presentation
Gulf Keystone's management team will be hosting a presentation for analysts and investors at 10:00am GMT (11:00am CET)
today via live audio webcast:
https://brrmedia.news/GKP_FY25
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.
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March 19, 2026 03:01 ET (07:01 GMT)
DJ 2025 Full Year Results Announcement -2-
A recording of the presentation will be made available on Gulf Keystone's website.
Disclosure regulation:
This announcement contains information which is considered to be inside information pursuant to the UK Market Abuse
Regulation ("UK MAR") and the EU Market Abuse Regulation ("EU MAR") and is subject to the disclosure requirements
pursuant to UK MAR, EU MAR article 17 and section 5-12 of the Norwegian Securities Trading Act. This stock exchange
announcement was published on behalf of Gulf Keystone by Aaron Clark, Head of Investor Relations and Corporate
Communications of Gulf Keystone, at the date and time as set out above.
Enquiries:
Gulf Keystone: +44 (0) 20 7514 1400
Aaron Clark, Head of Investor Relations
& Corporate Communications aclark@gulfkeystone.com
FTI Consulting +44 (0) 20 3727 1000
Ben Brewerton
GKP@fticonsulting.com
Nick Hennis
or visit: www.gulfkeystone.com
Notes to Editors:
Gulf Keystone Petroleum Ltd. (LSE & OSE: 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.
Chair's statement
Gulf Keystone delivered a strong operational and financial performance in 2025, with gross average production of 41,560 bopd reflecting an increase of 2% compared to the prior year. This was despite some operational disruptions in the summer due to trucking shortages and security issues related to neighbouring oil fields which caused a temporary field shutdown. Net capital expenditure and operating costs were delivered in line with annual guidance, and an important project to install produced water handling facilities at PF-2 was sanctioned during the year using lease financing to minimise upfront expenditures. I am pleased to report that the Company's safety performance has also remained exemplary, with another year without a Lost Time Incident.
The robust operational performance, coupled with the Company's disciplined approach to capital and operating cost management, meant that significant free cash flow was generated during the year and this enabled the Company to distribute USD50 million in dividends to our shareholders.
A highlight of 2025 was the successful restart of international pipeline exports from the Shaikan Field on 27 September 2025. The reopening of the Iraq-Türkiye Pipeline was the result of two and a half years of sustained engagement by the Company and other International Oil Companies with key Government stakeholders. When the pipeline closed in 2023, the Company had to rapidly respond to the revenue shortage by winding down a large development programme, reducing its cost base and re-establishing a presence in the local sales market. The signing of a tripartite interim export agreement with the Kurdistan Regional Government ("KRG") and Federal Government of Iraq ("FGI"), as well as the commencement of consistent crude oil liftings and payments by an international oil trading company, is expected to allow a normalisation of export operations with improved cash generation.
The Company is now working to negotiate and finalise long term export agreements and to secure payment arrangements with the KRG and FGI, which are commensurate with the Shaikan PSC terms. These developments should unlock an improved investment environment for the Kurdistan oil and gas industry and a strong foundation for future field development. With the Shaikan Field's large remaining reserves and resources base, there is a significant opportunity ahead to invest in profitable production growth and create additional shareholder value.
We were pleased to announce in September 2025 that the Company was exploring a potential dual listing of the Company's shares on Euronext Growth Oslo, operated by the Oslo Stock Exchange ("OSE"). On 13 February 2026, the Company completed a small retail offering connected with the listing of just over 500,000 shares, welcoming around 700 new shareholders. On 18 February 2026, GKP's shares began trading on Euronext Growth Oslo for the first time.
The Oslo listing will provide investors active in the Norwegian markets with better access to GKP's shares and is expected to improve the liquidity of the Company's share capital. It will also enable the Company to attract new institutional and retail investors from a capital market that knows GKP and Kurdistan well and who have been very proactive in financing the oil and gas industry in the region. In early April, cross-border transfers to Oslo will become possible for all holders of the UK-listed shares and, in due course, the Company expects to upgrade its listing to the OSE's Main Market. As a Board, we are excited about engaging with new investors in Norway and would like to thank the existing GKP shareholders for their support during the dual listing process.
While the Company's medium-term outlook and potential for value creation remain strong, we are currently adapting to the recent deterioration in the regional security environment following the strikes by the US and Israel on Iran on 28 February 2026 and subsequent retaliatory strikes in the Middle East, including in Kurdistan. The Company's assets have not been impacted as at the date of this report and measures have been taken to protect staff. However, production has been shut-in as a precautionary measure since the hostilities began, in line with other oil fields in Kurdistan and Federal Iraq. GKP is in a strong position to weather the storm, with a robust balance sheet, and we are hopeful that the security situation will stabilise in the near future and production and exports can resume. Notwithstanding this, the Company is taking prudent steps to identify initiatives to reduce capital, operating and running costs if this proves to be necessary.
Balancing investment in profitable production growth with shareholder distributions remains central to the Company's strategy and our established approach to shareholder distributions is to review the capacity for dividend payments around the full and half year results, while considering share buybacks opportunistically throughout the year. Consistent with this approach, the Board has carefully considered the regional security outlook and the Company's current cash position and proven ability to significantly reduce costs if required. Following this review, the Board has decided to declare an interim dividend of USD12.5 million, to be paid on 27 April 2026, and will consider the feasibility of a supplementary dividend payment following the restart of production, exports and payment receipts.
Finally, in June 2025, along with the other members of the GKP Board, I was delighted to visit the Company's business operations in Erbil and the Shaikan Field. During the trip, we met senior officials from the Kurdistan Regional Government, the Ministry of Natural Resources and various local authorities, spent time with the GKP team and visited the field facilities, well sites and local community development projects. It is clear that GKP has made a significant contribution to Kurdistan during its long history of investment and operations in the region and, despite the current security challenges, we believe it will continue to do so. The Shaikan Field remains a world-class asset and the Board would like to thank the Company's management team and staff for their continued efforts to realise its full potential.
David Thomas
Non-Executive Chair
18 March 2026
CEO review
2025 was a significant year of transition for the Company, defined by the restart of Kurdistan pipeline exports in September 2025 after over two and a half years of suspension. Our operational and financial delivery remained consistent, with production towards the top end of tightened guidance and investments in production-enhancing projects, primarily the sanction of water handling at PF-2, balanced with USD50 million of dividends paid to shareholders. While the near-term outlook is uncertain considering the recent deterioration in the regional security environment, the Company is in a strong position to navigate this period of turbulence with our robust cash position, flexibility to moderate our costs should the need arise and ability to swiftly return to production and exports once the current situation stabilises.
2025 performance
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Safe operations are our number one priority at Gulf Keystone and we were pleased to record another year without a Lost Time Incident ("LTI") in 2025. Our continued strong safety performance was delivered in the context of disruptions to production and field operations over the summer due to trucking shortages and security issues, the transition from local sales to exports in September 2025 and a number of active work fronts across our facilities and well sites. In January 2026 we celebrated three years without an LTI. We have extended our track record of LTI-free days to over 1,150 as at the date of this report and have gone more than a year without a recordable incident.
Gross average production in 2025 was 41,560 bopd, towards the top end of the Company's tightened guidance range of 40,000 - 42,000 bopd and 2% higher than the prior year (2024: 40,689 bopd). Cumulative volumes from the Shaikan Field since commercial production began passed 150 million barrels in November 2025, which is testament to the enduring quality of the asset.
Local market demand for Shaikan Field crude was consistently strong between January and May 2025, enabling monthly gross average production above 45,000 bopd. Production reduced from June to August because of trucking shortages and security disruptions caused by drone attacks on other oil fields in the region, the latter leading to the temporary shut-in of the Shaikan Field between 15 and 31 July 2025. The total loss of gross production due to these factors amounted to approximately 1.3 MMstb, or approximately 3,500 bopd on an annualised basis.
On 27 September 2025, pipeline exports from the Shaikan Field restarted based on interim agreements signed by the Company and other IOCs with the KRG and FGI. All trucking sales ceased on 26 September 2025. The transition was smooth with volumes quickly ramping up towards full well capacity following the reopening of the Iraq-Türkiye Pipeline ("ITP").
The interim exports agreements are in full compliance with the 2023-2025 Federal Iraqi Budget Law (the 'Budget Law') while maintaining the sanctity of Kurdistan's Production Sharing Contracts ("PSCs"). The Budget Law provides for an interim period during which IOCs are compensated USD16/bbl for exported production to cover the costs of production and transportation. As the KRG is no longer paid for its entitlement, but rather is compensated through FGI budget transfers, the USD16/bbl equated to USD30/bbl for 2025 exports sales on a cash received basis, based on the level of net entitlement for the Shaikan Contractor in the second half of the year.
Following the interim period, a reconciliation to full PSC entitlement at international prices and the signing of longer-term agreements is expected following a review of IOC invoices and contractual costs conducted by an international independent consultant. The Company expects the interim exports agreements to be extended beyond their current expiry of 31 March 2026 to facilitate the completion of the consultant's review. The Company's invoiced revenue for exports sales in 2025 indicate the potential level of international netbacks we could expect to receive, both in top-up payments for interim period sales and for future exports sales, with discounts to Dated Brent significantly reduced relative to both 2025 local sales and exports sales prior to the ITP closure in March 2023 (see the 'Financial review' for further detail).
Regular monthly liftings of crude allocated to the Company and other IOCs by a nominated trader commenced at the Ceyhan oil terminal in Türkiye in November 2025 and associated payments began in December 2025. Monthly liftings and payments have continued into 2026 as expected.
The Company's work programme in 2025 comprised disciplined and targeted investment in maintaining the safety and reliability of the Shaikan Field's production facilities, with safety upgrades progressed at PF-2, and optimising production through well workovers and interventions.
In August, we were pleased to sanction the installation of water handling facilities at PF-2. Once operational, the water handling 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 also 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 good progress has been made on the project since sanction, the schedule is currently under review due to the regional security environment.
2026 outlook
Gross production averaged c.41,300 bopd in 2026 year to 28 February, with production exceeding 44,000 bopd on several days towards the end of February 2026 reflecting the successful completion of well workovers and interventions.
Gross production has averaged c.32,100 bopd in 2026 year to 17 March, with the reduction reflecting the precautionary shut-in of the Shaikan Field following the strikes by the US and Israel on Iran on 28 February 2026 and subsequent retaliatory strikes in the Middle East, including in Kurdistan. Annualised losses to date from the shut-in are estimated at approximately 840 bopd a week. The Company is ready to restart production and exports quickly with an improvement in the security environment.
Due to the security situation the Company has placed its previous gross average production guidance for 2026 of 37,000 - 41,000 bopd under review. The Company has also suspended its 2026 net capex, net operating costs and other G&A expenses guidance and is assessing initiatives to reduce expenditures, if required. We will look to reinstate guidance once production has resumed and the overall impact of the shut-in is known.
Shaikan Field estimated reserves
The Company estimates gross 2P reserves of 416 MMstb as at 31 December 2025 contained in the Jurassic reservoir. The reduction relative to the 2024 year-end internal estimate of 443 MMstb reflects gross production of 15 MMstb in 2025 and minor revisions of 12 MMstb.
Gross 2P reserves have been internally estimated based on a draft FDP, which models a return to development drilling towards the end of 2026. Revisions to estimated reserves reflect updated assumptions regarding reservoir and well performance, partially offset by additional infill drilling.
Gross 2C resources continue to be estimated at 311 MMstb based on the Company's latest independent Competent Person's Report ("CPR") prepared by ERC Equipoise ("ERCE") as at 31 December 2022. Total gross 2C resources include an estimated 101 MMstb in the Jurassic reservoir, 157 MMstb in the Triassic reservoir and 53 MMstb in the Cretaceous reservoir.
The 2022 CPR was the Company's last published independent third-party evaluation of the Company's reserves and resources. The Company expects to commission an updated CPR, including a comprehensive independent assessment of 1P and 2P reserves and 2C resources, once a path to future field development has been established.
Jon Harris
Chief Executive Officer
18 March 2026
Financial review
Key financial highlights
Year Local sales Year
Export sales
ended 1 January to ended
27 September to 31
December
31 December 26 September 31 December
2025
2025 2025 2024
Gross average production(1) bopd 41,560 43,434 40,891 40,689
Dated Brent(2) USD/bbl 69.1 63.9 71.0 80.8
Realised price(1)(3) USD/bbl 33.9 50.5 27.6 26.8
Discount to Dated Brent USD/bbl 35.2 13.4 43.4 53.9
Revenue (invoiced for the period)(1) USDm 193.1 79.2 113.9 151.2
(4)
Revenue (IFRS)(5) USDm 164.8 50.9 113.9 151.2
Operating costs USDm 52.6 14.0 38.6 52.4
Gross operating costs per barrel(1) USD/bbl 4.3 4.2 4.4 4.4
Other general and administrative USDm 9.3 2.0 7.3 11.4
expenses
Share option expense USDm 7.0 1.0 6.0 4.4
Adjusted EBITDA(1)(6) USDm 111.4 56.8 54.6 76.1
Profit/(loss) after tax USDm 15.1 24.0 (8.9) 7.2
Basic earnings/(loss) per share cents 7.0 11.1 (4.1) 3.3
Revenue receipts(1) USDm 122.4 14.1 108.3 144.1
Net capital expenditure(1)(7) USDm 38.8 14.6 24.2 18.3
Free cash flow(1) USDm 29.1 (8.3) 37.4 65.4
Shareholder distributions(8) USDm 50 0 50 45
Cash and cash equivalents USDm 78.2 78.2 87.2 102.3
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March 19, 2026 03:01 ET (07:01 GMT)
DJ 2025 Full Year Results Announcement -4-
1. Represents either a non-financial or non-IFRS measure which are explained in the summary of non-IFRS measures where
applicable. 2. Simple average Dated Brent price; provided as a comparator for realised price. 3. 2024 realised prices reflect a full year of local sales, 2025 realised prices reflect local sales from 1 January to
26 September 2025 and export sales from 27 September to 31 December 2025. Realised prices for 2025 export sales
reflect the full value of entitlement invoices at international prices with adjustments for quality and
transportation costs. Cash received for 2025 export sales equated to USD30/bbl. 4. Revenue (invoiced for the period) is a non-IFRS measure reflecting the full value of local and export sales
entitlement invoices. See note 2 in the financial statements for further details. 5. Revenue (IFRS) reflects 'Revenue (invoiced for the period)' adjusted for the effective recovery of past
receivables. 6. Adjusted EBITDA is based on 'Revenue (invoiced for the period)'. 7. 2025 net capital expenditure includes a USD5.4 million non-cash charge associated with the capitalisation of drilling
inventory previously classified as held for sale. 8. 2025: USD50 million of dividends; 2024: USD35 million of dividends and USD10 million of completed share buybacks.
2025 was another year of strong delivery in line with annual guidance, with targeted investment in production-enhancing projects, strict cost control and continued free cash flow generation underpinning USD50 million of dividend payments to GKP shareholders. The restart of Kurdistan exports was a pivotal milestone for the Company, with significantly higher realised prices visible in our invoiced revenue in Q4 2025 and consistent payments to date for sales under the interim exports agreements.
Looking ahead, the Company is currently navigating the recent deterioration of the regional security environment and shut-in of production. We are in a strong position, with a robust balance sheet and significant flexibility to reduce expenditures should the shut-in persist.
Notwithstanding these immediate challenges, we see several opportunities for shareholder value creation ahead by securing a return to exports sales at international prices, concluding our commercial negotiations with the KRG and capitalising on a new phase of balancing investment in profitable production growth with shareholder returns as we approach the full recovery of past recoverable costs.
Adjusted EBITDA
Adjusted EBITDA increased 46% to USD111.4 million in 2025 (2024: USD76.1 million), driven by a resilient production performance, tight cost control in line with annual guidance and the sharp increase in realised prices visible in exports sales invoices following the restart of Shaikan Field pipeline exports on 27 September 2025.
Revenue based on sales invoices issued in 2025, a non-IFRS measure, increased 28% to USD193.1 million (2024: USD151.2 million), reflecting the 2% improvement in annual production and an average realised price of USD33.9/bbl (2024: USD26.8/ bbl). Revenue on an IFRS basis was USD164.8 million (2024: USD151.2 million) which reflects an adjustment for the effective recovery of past receivables. The Group is restricted from reporting a total receivable balance in excess of the unrecovered cost oil balance (or 'Cost Pool') and therefore cannot recognise revenue under IFRS beyond this point. See note 2 in the financial statements for further details.
Under the exports agreements signed in September 2025, crude pricing is now linked to Dated Brent around cargo lifting windows as opposed to average monthly Brent pricing in the month of production. The realised price achieved from export sales in 2025 was USD50.5/bbl and therefore represented a significant improvement on the price achieved from local sales of USD27.6/bbl in January to September 2025 and USD26.8/bbl in 2024. The average discount to Dated Brent of USD13.4/bbl arising from 2025 export sales is encouraging and represents a sizeable reduction compared to the average discount to Dated Brent of USD27.2/bbl in 2022, the last full year of exports sales prior to the ITP closure in March 2023. However, it is relatively early in the new export process to project the precise discount for exports sales going forward given the limited time period, the limited number of cargo liftings in the period and the ongoing review of the independent consultant.
The Company continued to exercise rigorous cost control in 2025, with operating costs and other G&A expenses in line with annual guidance. Gross operating costs per barrel and operating costs were broadly flat at USD4.3/bbl (2024: USD4.4/ bbl) and USD52.6 million (2024: USD52.4 million) respectively. Other G&A expenses reduced 18% to USD9.3 million in 2025 (2024: USD11.4 million), primarily reflecting the absence of one-off retention awards in 2024.
Share option expense was USD7.0 million in 2025 (2024: USD4.4 million), principally reflecting the increase in vested awards associated with the 2022 LTIP relative to the vesting of the 2021 LTIP award in 2024.
Cash flows
Revenue receipts, which reflect cash received in the year for the Company's net entitlement of local and interim period exports sales (with the latter reflecting cash receipts of USD30/bbl as per the interim exports agreements), were USD122.4 million. Revenue receipts were 15% lower relative to the prior year (2024: USD144.1 million) reflecting the transition from pre-paid local sales to payments for exports sales typically in the second month after production. As such, two exports sales payments were received in December 2025 for two crude liftings in November 2025 covering September and most of October exports sales. This timing difference of around two months is reflected as a receivable as at 31 December 2025 of USD32.0 million net to GKP. Payments for exports liftings have continued consistently to the date of this report, in line with the interim exports agreements, enabling us to collect the amounts receivable at the year end.
The Company has also accrued a receivable for exports sales under the interim agreements to account for the differential between realised prices for cash received from 2025 export sales and the expected reconciliation to international prices, reflected in the realised prices for invoiced revenue. This additional receivable totalled USD32.8 million net to GKP at year end 2025. The Company's current expectation is that this receivable, as well as increases accrued for export sales ahead of the conclusion of the consultant's review and interim exports agreements, will be paid in the form of additional allocated liftings of crude and associated payments. The estimated payment timing and value of this receivable are subject to the independent consultant's report. The current interim exports agreements, which expire on 31 March 2026, are expected to be extended to facilitate its completion of the report.
Net capital expenditure in 2025 was USD38.8 million (2024: USD18.3 million) reflecting investment in PF-2 safety upgrades, well workovers and initial expenditure on the installation of water handling facilities at PF-2. Net capex in the period included a non-cash charge of USD5.4 million associated with the capitalisation of drilling inventory purchased and paid for in 2022 and 2023 that had previously been classified as held for sale following the wind down of the Company's expansion programme in 2023. Excluding this charge, cash net capital expenditure of USD33.4 million was in line with annual guidance.
Free cash flow generation in 2025 was USD29.1 million (2024: USD65.4 million), with the increase in Adjusted EBITDA offset by the increase in net capital expenditure in the year and a working capital outflow related to the 2025 exports sales receivables.
The Company was pleased to pay dividends in the year of USD50 million (2024: USD35 million of dividends and USD10 million of completed share buybacks), according to the Company's announced approach of semi-annual dividend reviews around the full-year and half-year results.
To satisfy the vesting of the 2022 LTIP award in 2025, purchases of the Company's shares were made by the Employee Benefit Trust ("EBT") in the first half of the year, amounting to USD4.0 million. The Company expects the EBT to purchase shares to satisfy the potential vesting of future LTIP awards. The vesting of LTIP awards in previous years has been satisfied by the issuance of shares.
GKP's cash balance was USD78.2 million as at 31 December 2025 (31 December 2024: USD102.3 million) with no outstanding debt. The cash balance as at 18 March 2026 was USD89.1 million, with the increase since year end 2025 driven by continued consistent cash payments for exports sales.
The Group performed a cash flow and liquidity analysis, including the impact of the ongoing conflict in the Middle East region and the precautionary shut-in of the Shaikan Field since 28 February 2026. Consequently, the Group has considered a range of sensitivities, including delays to a production restart, and remains satisfied that sufficient levers and mitigating actions are available to preserve liquidity, which are set out in more detail in the 'Going concern' note within the financial statements. Therefore, the going concern basis of accounting is used to prepare the financial statements.
Net entitlement
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The Company shares Shaikan Field revenues with its partner, Kalegran B.V. (a subsidiary of MOL Group ("MOL"), with GKP and MOL together forming the 'Shaikan Contractor' or the 'Contractor'), and the KRG, based on the terms of the Shaikan Production Sharing Contract ('Shaikan PSC'). GKP and MOL's revenue entitlement is described as 'Contractor entitlement' and GKP's entitlement alone is described as 'net'. GKP's net entitlement includes its share of the recovery of the Company's investment in the Shaikan Field, comprising capital expenditure and operating costs, through cost oil, and a share of the profits through profit oil, less a Capacity Building Payment ("CBP") owed to the KRG.
The Cost Pool and R-factor, as defined below, are used to calculate monthly cost oil and profit oil entitlements, respectively, owed to the Shaikan Contractor from crude oil sales. Unrecovered cost oil owed to the Shaikan Contractor increases with the addition of incurred expenditures deemed recoverable under the Shaikan PSC and is depleted on a cash receipt basis as crude sales are paid.
As the Cost Pool is reported on a cash receipt basis, a large receivable balance related to 2022-2023 exports sales remains outstanding which has therefore not yet been deducted from the Cost Pool, as detailed below and within note 13 of the financial statements. As at 31 December 2025, there was USD152.7 million of unrecovered cost oil for the Shaikan Contractor (USD122.2 million net to GKP) in the Cost Pool. The R-factor, calculated as cumulative Contractor revenue receipts of USD2,582 million divided by cumulative Contractor costs of USD2,079 million, was 1.24 as at 31 December 2025. Both the Cost Pool and the R-factor are subject to potential cost audit by the KRG.
GKP's net entitlement of total Shaikan Field sales was approximately 36% in 2025 for amounts invoiced in the year. The Company's 2025 net entitlement reflects the effective recovery in the second half of the year of USD28.3 million of cost oil owed to GKP from the outstanding October 2022 to March 2023 receivable balance. Consequently, the total receivable balance for 2022-2023 exports sales as at 31 December 2025 reduced to USD122.8 million net to GKP (comprising USD92.1 million cost oil and USD30.7 million profit oil net to GKP). Including receivables in relation to September to December 2025 export sales, the combined total owed to GKP amounted to USD184.6 million as at 31 December 2025 (comprising USD141.8 million cost oil and USD42.8 million profit oil).
As previously disclosed, the repayment of the 2022-2023 receivable balance is a component of the Company's ongoing commercial negotiations with the KRG, along with the settlement of other KRG-related assets and liabilities. The negotiations continue to progress but no agreement has been reached as at the date of this report.
Looking ahead, the outlook for GKP's net entitlement in 2026 will depend on the outcome of these negotiations, among other variables, given the cost oil component of the outstanding 2022-2023 receivable balance as at 31 December 2025 essentially accounted for the Cost Pool at the same date. The net effect of settling the receivable balance and the other KRG-related assets and liabilities under discussion with the KRG is expected to lead to a lower Cost Pool relative to the 31 December 2025 level, reducing the amount of cost oil that can be recovered and reducing the Company's net entitlement.
In due course, the outstanding Cost Pool is expected to be fully recovered. Increases in realised prices and production as well as the potential settlement of past overdue invoices, as outlined above, are expected to accelerate depletion. Once the Cost Pool is fully depleted, the Company's net entitlement will be below 36% and will be determined by the revenue realised from oil sales and the amount of recoverable net capital expenditures and operating costs spent in a given period. A fully depleted Cost Pool will put the Company in an excellent position to invest in profitable production growth while continuing to generate free cash flow, assuming healthy oil prices and consistent exports payments.
Outlook
In light of the current production shut-in, the Company has suspended its 2026 net capital expenditures, net operating costs and other G&A expenses guidance. The Company retains a robust balance sheet and significant flexibility to reduce its work programme and cost base should the production shut-in persist. The Company had previously been expecting net capex of USD40-USD50 million, net operating costs of USD55-USD60 million and other G&A expenses below USD10 million in 2026. The Company will look to update guidance once production has restarted and the overall impact is known.
Gulf Keystone remains committed to returning potential excess cash to shareholders via semi-annual dividend payments and opportunistic share buybacks. As described in the 'Chair's statement', the Board has decided to declare an interim dividend of USD12.5 million, equivalent to USD0.0575 per Common Share, following careful consideration of the Company's liquidity needs, current outlook and ability to significantly reduce capital expenditures and costs. The dividend will be paid on 27 April 2026, based on a record date of 10 April 2026 and ex-dividend date of 9 April 2026. The Board intends to review the feasibility of a supplementary dividend payment following a restart of production, exports and payment receipts.
Gabriel Papineau-Legris
Chief Financial Officer
18 March 2026
Non-IFRS measures
The Group uses certain measures to assess the financial performance of its business. Some of these measures exclude amounts that are included in, or include amounts that are excluded from, the most directly comparable measure calculated and presented in accordance with International Financial Reporting Standards ("IFRS"), or are calculated using financial measures that are not calculated in accordance with IFRS. As a result, these measures are termed "non- IFRS measures" and include financial measures such as gross operating costs and non-financial measures such as gross production.
The Group uses such measures to measure and monitor operating performance and liquidity, in presentations to the Board and as a basis for strategic planning and forecasting. The Directors believe that these and similar measures are used widely by certain investors, securities analysts and other interested parties as supplemental measures of performance and liquidity.
The non-IFRS measures may not be comparable to other similarly titled measures used by other companies and have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of the Group's operating results as reported under IFRS. An explanation of the relevance of each of the non-IFRS measures and a description of how they are calculated is set out below. Additionally, a reconciliation of the non-IFRS measures to the most directly comparable measures calculated and presented in accordance with IFRS and a discussion of their limitations is set out below, where applicable. The Group does not regard these non-IFRS measures as a substitute for, or superior to, measures that are equivalent to financial measures that are calculated or presented in accordance with IFRS.
Gross operating costs per barrel
Gross operating costs are divided by gross production to arrive at operating costs per barrel.
2025 2024 Gross production (MMbbls) 15.2 14.9 Gross operating costs (USD million)(1) 65.8 65.5 Gross operating costs per barrel (USD per bbl) 4.3 4.4
(1) Gross operating costs equate to operating costs included in cost of sales (see note 3 to the consolidated financial statements) adjusted for the Group's 80% working interest in the Shaikan Field.
Adjusted EBITDA
Adjusted EBITDA is a useful indicator of the Group's profitability and excludes the impact of the costs noted below.
2025 2024
USD million USD million
Profit after tax 15.1 7.2
Finance costs 2.0 1.7
Finance income (2.7) (4.1)
Tax (credit)/charge (0.5) 0.7
Depreciation of oil and gas assets 77.3 75.8
Depreciation of other PPE assets and amortisation of intangibles 2.0 3.0
Decrease in expected credit loss provision on trade receivables (7.6) (8.2)
Adjusted EBITDA (including IFRS revenue) 83.1 76.1
Effective recovery of past receivables 28.3 -
Adjusted EBITDA (including non-IFRS revenue invoiced for the year) 111.4 76.1
Non-IFRS revenue invoiced for the year includes both local and pipeline exports as invoiced in 2025 and explained further in note 2.
Net cash
Net cash is a useful indicator of the Group's indebtedness and financial flexibility indicating the level of cash and cash equivalents less cash borrowings within the Group.
2025 2024
USD million USD million
Cash 78.2 102.3
Borrowings - -
Net cash 78.2 102.3
The Group was debt free at 31 December 2025 and 31 December 2024.
Net capital expenditure
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Net capital expenditure is the value of the Group's additions to oil and gas assets excluding the change in value of the decommissioning asset or any asset impairment.
2025 2024
USD million USD million
Net capital expenditure (see note 10 to the consolidated financial statements) 38.8 18.3
As detailed in note 10 to the financial statements, the net capital expenditure in the period ended 31 December 2025, includes USD5.4 million of items originally purchased and paid in 2022 and 2023, but were subsequently classed as impaired inventory held for sale. Upon delisting as held for sale these assets have been capitalised, as an oil and gas asset, but are a non-cash item in the current year. Excluding this charge, net capital expenditure of USD33.4 million was in line with annual guidance.
Free cash flow
Free cash flow represents the Group's cash flows before any dividends and share buybacks including related fees.
2025 2024
USD million USD million
Net cash generated from operating activities 63.1 93.5
Net cash used in investing activities (33.6) (27.6)
Payment of leases (0.4) (0.5)
Free cash flow 29.1 65.4
Consolidated income statement
For the year ended 31 December 2025
Notes 2025 2024
USD'000 USD'000
Non-IFRS measure
Revenue invoiced for the year 2 193,093 151,208
Effective recovery of past receivables 2 (28,280) -
Revenue 164,813 151,208
IFRS consolidated income statement
Revenue 2 164,813 151,208
Cost of sales 3 (141,089) (138,866)
Decrease of expected credit loss provision on trade receivables 13 7,558 8,191
Gross profit 31,282 20,533
Other general and administrative expenses 4 (9,313) (11,412)
Share option related expenses 5 (6,959) (4,419)
Profit from operations 15,010 4,702
Finance income 7 2,740 4,116
Finance costs 7 (1,976) (1,676)
Foreign exchange (loss)/gain (1,108) 724
Profit before tax 14,666 7,866
Tax credit/(charge) 8 468 (708)
Profit after tax 15,134 7,158
Earnings per share (cents)
Basic 9 6.97 3.26
Diluted 9 6.68 3.13
Consolidated statement of comprehensive income
For the year ended 31 December 2025
2025 2024
USD'000 USD'000
Profit after tax for the year 15,134 7,158
Items that may be reclassified to the income statement in subsequent periods:
Exchange gain/(loss) on translation of foreign operations 1,781 (517)
Total comprehensive income for the year 16,915 6,641
Consolidated balance sheet
As at 31 December 2025
Notes 31 December 2025 31 December 2024
USD'000 USD'000
Non-current assets
Trade receivables 13 84,007 138,175
Intangible assets 260 1,255
Property, plant and equipment 10 349,404 388,450
Deferred tax asset 16 1,365 825
435,036 528,705
Current assets
Inventories 12 7,774 9,852
Trade and other receivables 13 125,065 26,779
Cash 78,233 102,346
211,072 138,977
Total assets 646,108 667,682
Current liabilities
Trade and other payables 14 (128,314) (117,277)
Deferred income - (716)
(128,314) (117,993)
Non-current liabilities
Trade and other payables 14 (928) (1,112)
Decommissioning provision 15 (37,839) (36,247)
(38,767) (37,359)
Total liabilities (167,081) (155,352)
Net assets 479,027 512,330
Equity
Share capital 18 217,005 217,005
Share premium 18 414,139 463,985
Exchange translation reserve (2,502) (4,283)
Accumulated losses (149,615) (164,377)
Total equity 479,027 512,330
The notes form part of the financial statements.
The financial statements were approved by the Board of Directors and authorised for issue on 18 March 2026 and signed on its behalf by:
Jon Harris
Chief Executive Officer
Gabriel Papineau-Legris
Chief Financial Officer
Consolidated statement of changes in equity
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For the year ended 31 December 2025
Attributable to equity holders of the Company
Share Total
Share Exchange translation Accumulated
reserve losses
premium equity
capital
Notes USD'000 USD'000 USD'000 USD'000 USD'000
Balance at 1 January 2024 222,443 503,312 (3,766) (174,752) 547,237
Profit after tax for the year - - - 7,158 7,158
Exchange difference on translation of - - (517) - (517)
foreign operations
Total comprehensive income for the year - - (517) 7,158 6,641
Dividends paid 22 - (34,933) - - (34,933)
Employee share schemes 21 - - - 3,472 3,472
Share issues 18 255 - - (255) -
Repurchase of ordinary shares 18 (5,693) (4,394) - - (10,087)
Balance at 31 December 2024 217,005 463,985 (4,283) (164,377) 512,330
Profit after tax for the year - - - 15,134 15,134
Exchange difference on translation of - - 1,781 - 1,781
foreign operations
Total comprehensive income for the year - - 1,781 15,134 16,915
Dividends paid 22 - (49,846) - - (49,846)
Employee share schemes 21 - - - 3,660 3,660
Reissue of repurchased shares 18 - - - (3,702) (3,702)
Own shares repurchased and held in 18 - - - (330) (330)
Employee Benefit Trust
Balance at 31 December 2025 217,005 414,139 (2,502) (149,615) 479,027
Consolidated cash flow statement
For the year ended 31 December 2025
2025 2024
Notes
USD'000 USD'000
Operating activities
Cash generated from operations 19 60,381 89,427
Interest received 7 2,740 4,116
Interest paid 7 (25) -
Net cash generated from operating activities 63,096 93,543
Investing activities
Purchase of intangible assets (248) (420)
Purchase of property, plant and equipment 19 (33,314) (27,178)
Net cash used in investing activities (33,562) (27,598)
Financing activities
Payment of dividends 22 (49,846) (34,933)
Purchase of own shares - share buyback - (10,087)
Purchase of own shares - employee share-based payments (4,032) -
Payment of leases (425) (452)
Net cash used in financing activities (54,303) (45,472)
Net (decrease)/increase in cash (24,769) 20,473
Cash at beginning of year 102,346 81,709
Effect of foreign exchange rate changes 656 164
Cash at end of the year being bank balances and cash on hand 78,233 102,346
Summary of material accounting policies
General information
Gulf Keystone Petroleum Limited (the "Company") is domiciled and incorporated in Bermuda (registered address: c/o Carey Olsen Services Bermuda Limited, 5th Floor, Rosebank Centre, 11 Bermudiana Road, Pembroke, HM08 Bermuda); together with its subsidiaries it forms the "Group". On 25 March 2014, the Company's common shares were admitted, with a standard listing, to the Official List of the United Kingdom Listing Authority ("UKLA") and to trading on the London Stock Exchange's Main Market for listed securities. On 29 July 2024, new Listing Rules came into effect for the London Stock Exchange. The former categories for Main Market listed companies of Premium and Standard Listed were ceased (GKP being a Standard Listed company up until this point). From that date, GKP moved to the Equity Shares - Transition category. The Company serves as the parent company for the Group, which is engaged in oil and gas exploration, development and production, operating in the Kurdistan Region of Iraq.
The financial information set out in this results announcement does not constitute the Company's annual report and accounts for the years ended 31 December 2024 or 2025 but is derived from those accounts. The auditors have reported on those accounts; their reports were unqualified and did not draw attention to any matters by way of emphasis without qualifying their report.
Amendments to International Financial Reporting Standards ("IFRS") that are mandatorily effective for the current year
In the current year, the Group has applied a number of amendments to IFRS issued by the International Accounting Standards Board ("IASB") that are mandatorily effective for an accounting period that begins on or after 1 January 2025.
The following new accounting standards, amendments to existing standards and interpretations are effective on 1 January 2025: Lack of Exchangeability (Amendments to IAS 21) and Amendments to the SASB standards to enhance their international applicability. These standards do not and are not expected to have a material impact on the Company's results or financials statement disclosures in the current or future reporting periods.
New and revised IFRSs issued but not yet effective
At the date of approval of these financial statements, the Group has not applied the following new and revised IFRSs that have been issued but are not yet effective by United Kingdom adopted International Accounting Standards ("IAS"):
IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information
IFRS S2 Climate-related Disclosures; Amendments to Greenhouse Gas Emissions Disclosures
IFRS 19 Subsidiaries without Public Accountability: Disclosures
Amendments IFRS 9 and Classification and measurement of financial instruments; Contracts Referencing
IFRS 7 Nature-dependent Electricity
Annual Improvements to IFRS 1: Hedge accounting by a first-time adopter; IFRS 7: Gain or loss on derecognition; IFRS
IFRS Accounting Standards 7: Disclosure of deferred difference between fair value and transaction price; IFRS 7:
- Volume 11 Introduction and credit risk disclosures; IFRS 9: Lessee derecognition of lease liabilities;
IFRS 9: Transaction price; IFRS 10: Determination of a 'de facto agent' IAS 7: Cost method
Amendments to IAS 21 Translation to a Hyperinflationary Presentation Currency
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The directors do not expect that the adoption of the Standards listed above will have a material impact on the financial statements of the Group in future periods.
IFRS 18 replaces IAS 1, carrying forward many of the requirements in IAS 1 unchanged and complementing them with new requirements. In addition, some IAS 1 paragraphs have been moved to IAS 8 and IFRS 7. Furthermore, the IASB has made minor amendments to IAS 7 and IAS 33 Earnings per Share.
IFRS 18 introduces new requirements to:
-- present specified categories and defined subtotals in the statement of profit or loss -- provide disclosures on management-defined performance measures ("MPMs") in the notes to the financial statements -- improve aggregation and disaggregation
An entity is required to apply IFRS 18 for annual reporting periods beginning on or after 1 January 2027, with earlier application permitted. The amendments to IAS 7 and IAS 33, as well as the revised IAS 8 and IFRS 7, become effective when an entity applies IFRS 18. IFRS 18 requires retrospective application with specific transition provisions.
The Directors of the Company anticipate that the application of these amendments may have an impact on the Group's consolidated financial statements in future periods.
Statement of compliance
The financial statements have been prepared in accordance with United Kingdom adopted International Accounting Standards.
Basis of accounting
The financial statements have been prepared using the going concern basis of accounting and under the historical cost basis except for the valuation of hydrocarbon inventory which has been measured at net realisable value and the valuation of certain financial instruments which have been measured at fair value. Equity-settled share-based payments are recognised at fair value at the date of grant and are not subsequently revalued. The material accounting policies adopted are set out below.
Going concern
The Group's business activities, together with the factors likely to affect its future development, performance and position, are set out in the Chair's statement, the Chief Executive Officer's review and the Management of principal risks and uncertainties. The financial position of the Group at the year end, together with its cash flows and liquidity position, is presented in the Financial review.
As at 18 March 2026, the Group had USD89.1 million of cash and no debt. The Group continues to monitor and manage its liquidity closely. Cash forecasts are updated regularly, and sensitivities are run for different scenarios reflecting the latest operational and commercial outlook, including revenue receipts under interim export arrangements, the timing of the return to full Production Sharing Contract ("PSC") entitlement and expenditure phasing. The Group remains focused on taking appropriate actions to preserve its liquidity position.
On 28 February 2026, the Shaikan Field was shut-in as a safety precaution following the strikes by the US and Israel on Iran and the subsequent retaliatory strikes in the Middle East, including in the Kurdistan. Production remains shut-in at the date of this report and the Company is taking all reasonable steps to maintain security and safeguarding the value of the asset during this time. There has been no damage to the Group's assets, and appropriate steps were taken to protect staff. The Company is monitoring for an opportunity to safely and quickly restart production with an improvement in the security environment.
The Group's liquidity position has remained stable up to the date of this report, supported by the resumption of export sales in late 2025. Prior to the precautionary shut-in on 28 February 2026, regular liftings and associated payments continued under the interim agreements. While production is currently shut-in, the interim export arrangements remain in place until 31 March 2026. The Group expects that these arrangements will be extended. A review by an independent consultant of International Oil Companies' invoices and contractual cost structures is underway to support reconciliation to full PSC entitlement (see note 13).
Export sales are currently impacted by the precautionary shut-in of the Shaikan field. The key uncertainties relevant to the going concern assessment include:
-- Geopolitical and security environment: the duration and impact of the ongoing conflict in the wider Middle East
region is difficult to predict; -- Continuation of interim export arrangements: the renewal of agreements beyond 31 March 2026, and the regularity and
timing of export receipts; -- PSC entitlement reconciliation: completion of the consultant-led review and timing of transition to full
entitlement pricing; and -- Outstanding commercial matters - progression of discussions with the Ministry of Natural Resources ("MNR")
regarding arrears, cost audit, PSC amendments and associated commercial issues.
The Directors have considered a range of sensitivities, including an extension of interim export arrangements, delays to returning to full PSC entitlement and prolonged delays to production restart due to the conflict in the wider Middle East region. Across these sensitivities, the Group retains the ability to implement mitigating actions, including the deferral of discretionary expenditure and the phasing of activity, to preserve liquidity while maintaining safe operations and the ability to promptly restart production.
As explained in note 14, although the Group has recognised current liabilities payable to the Kurdistan Regional Government ("KRG"), these are not expected to be cash settled.
Overall, the Group's forecasts, taking into account the applicable risks, scenario testing and available mitigating actions, indicate that the Group has sufficient financial resources for the 12-month period from the date of approval of the 2025 annual report and accounts. Based on this analysis, the Directors have a reasonable expectation that the Group has adequate resources to continue to operate for the foreseeable future. Accordingly, the going concern basis of accounting continues to be adopted for the preparation of these consolidated financial statements.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and enterprises controlled by the Company (its subsidiaries) as at and for the year ending 31 December each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity, so as to obtain benefits from its activities.
Joint arrangements
The Group is engaged in oil and gas exploration, development and production through unincorporated joint arrangements; these are classified as joint operations in accordance with IFRS 11. The Group accounts for its share of the results and net assets of these joint operations. Where the Group acts as Operator of the joint operation, the gross liabilities and receivables (including amounts due to or from non-operating partners) of the joint operation are included in the Group's balance sheet.
Sales revenue
The recognition of revenue is considered to be a key accounting judgement.
Revenue is earned based on the entitlement mechanism under the terms of the Shaikan Production Sharing Contract ("PSC"). Entitlement has two components: cost oil, which is the mechanism by which the Group recovers its costs incurred, and profit oil, which is the mechanism through which profits are shared between the Group, its partner and the KRG. The Group is liable for capacity building payments calculated as a proportion of profit oil entitlement. Entitlement from cost oil and profit oil are reported as revenue, and capacity building payments are included in cost of sales.
For sales to the local market for all of 2024 and up until 26 September 2025, the delivery point was the point at which crude oil was loaded into the buyers' nominated trucks. The consideration was determined by reference to the selling price as per crude sales agreements with local customers, with other fees and royalties due as determined by commercial agreements; revenue was reported net of these deductions.
Since the reopening of the ITP on 27 September 2025, all oil is sold by the Shaikan Contractor (the Group and Kalegran BV, a subsidiary of MOL Hungarian Oil & Gas Plc, ("MOL")) to the KRG, who in turn resell the oil.
Under IFRS 15: Revenue from contracts with customers, GKP considers that control of crude oil is transferred from the Shaikan Contractor to the KRG or local buyer at the delivery point as defined in the lifting agreement or crude sales agreement. At this delivery point the Shaikan Contractor is due economic benefits which can be reliably measured and are probable to be received.
For sales since the reopening of the ITP, the delivery point is the export pipeline flange at the production facilities. The sale price determined by the closing oil market price on the last day of the production month, with deductions for quality and transportation fees, with other fees and royalties due as determined by commercial agreements; revenue was reported net of these deductions. Consideration is due based upon the oil market price upon lifting at the port of Ceyhan, after other fees and royalties due as determined by commercial agreements. The variation between the sales price and consideration received is recorded as an embedded derivative in line with IFRS 9, not as variable consideration according to IFRS 1 (see note 2 to the consolidated financial statements)
Income tax arising from the Group's activities under its PSC is settled by the KRG on behalf of the Group. Since the Group is not able to measure the amount of income tax that has been paid on its behalf, the notional income tax amounts have not been included in revenue or in the tax charge.
Finance income
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