Gulf Keystone raises funds through share issue

Firm raised more than $40mn, but share price falls

Shares have fallen at Gulf Keystone.
Shares have fallen at Gulf Keystone.

Gulf Keystone has raised around $40.7mn through a share placement, which it discounted by 21%.

Some 85.9mn shares were snapped up at 32p per share, a marked decreased from the previous level of 40.5p.

The news spooked the markets, with shares falling by almost a fifth (18.5%) on the London Stock Exchange.

A report by Reuters said that Gulf Keystone is one among a number of oil producers in the region struggling due to irregular payments for crude oil by the Kurdistan Regional Government.

A group of investors led by former Tullow Oil chairman Patrick Plunkett said on Monday that it had offered to help Gulf Keystone solve its funding problems but the company had so far declined to engage in talks, it added.

Gulf Keystone’s CFO, Sami Zouari, said: "This successful placing will strengthen the company's financial position while discussions with interested parties in relation to possible asset transactions or a sale of the company and the Board's assessment of a number of longer-term funding options to progress to the next Shaikan production target of up to 70,000 barrels of oil per day are ongoing."

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