Gulf Keystone Pet Ord New

Good morning and welcome to Gulf Keystone Petroleum's 2026 Half Year Results presentation. At the end of today's presentation, there will be an opportunity for Q&A. For participants joining via the conference call, you may ask a question by pressing star 1 on your telephone keypad. For those listening through the webcast, you can submit a written question at any time by clicking on the control panel at the bottom of your screen and selecting the questions icon to type it in. We will take analyst questions from the conference call first, followed by investor questions from the webcast. I'll now hand over to Chief Executive Officer, Jon Harris. Jon, please go ahead.

Thank you. Welcome to Gulf Keystone's 2026 half-year results presentation. I'm Jon Harris, the CEO, and I'm joined by Gabriel Papineau-Legris, our CFO. Over the next few slides, we will discuss our operational financial performance in the first half of 2026 and the current advent for the business. We will then open the line for questions. Next slide, please. This is our regular legal disclaimer, and I'll leave you to review at your leisure. Presentation slides are available to view on our website. Next slide, please. DOS Keystone delivered a resilient operational financial performance in the first half of 2026 during a period of significant regional disruption caused by the conflict between the USA and Iran. Our priority throughout has been the safety of our people. Despite the challenging circumstances, we are pleased to have extended our track record of zero lost time incidents to over three and a half years. Decisive act to reduce expenditures following the production shutdown enabled us to minimise cash outflow, maintain a robust balance sheet and pay a $12.5 million dividend to shareholders. We are pleased to have recently restarted production and exports, with volumes continuing to ramp to prior levels. Looking ahead, we are focused on unlocking full production sharing contract entitlement for export sales at international prices, which could bolster cash flow generation in the second half of the year and support a return to production growth in 2027. Turning now to the operational review. Next slide, please. Production in 2026 year-to-date has been impacted by two precautionary shut-ins related to the regional security environment, totalling almost five months. Gross average production in the first half of 2026 was 14,600 barrels of oil per day, compared with 44,100 barrels per day in the first half of 2025, reflecting the shut-in from 28 February to 23 June. Shaikan Field and the team on the ground responded exceptionally well to these disruptions. Prior to the first shut-in, production had exceeded 44,000 barrels of oil per day on several days in late February thanks to the completion of several well workovers. Following the restart on the 24th of June, the field ramped up quickly to exceed 45,000 barrels of oil per day before the second shut-in on the 19th of July. On August 16th, we were able to restart production again following the extension of the Tripartite Interim Export Agreements and our view of the regional security environment. Growth volumes are currently approaching 40,000 barrels of oil per day and well activities are underway to increase production to prior levels soon. Our focus for the remainder of 2026 is completing the ongoing ramp-up and maintaining stable export sales. Subject to the stable security environment continuing. Next slide, please. Investment and activity in the first half of 2026 has focused on the enhanced production and on healthy production and improving safety and reliability of our facilities. Almost half of the $18 million net capex in the period was spent prior to the shutdown on the 28th of February. Subsequently, we moved quickly to moderate expenditures and preserve cash. Nonetheless, we have actively continued to progress safety critical and strategic projects during that period. In particular, the installation of water handling facilities up here too. We're making good progress and remain on track for full startup in Q1 2027. Once operational, the project is expected to unlock 4,000 to 8,000 barrels of oil per day of incremental gross production above the baseline, expand total capacity to around 77,000 barrels of oil per day, and Reduce Reservoir Risk. Looking ahead to the remainder of the year, we will continue to further progress the work program provided production remains online. We are also positioning for a return to field development and drilling in 2027 once we have unlocked full production sharing contract entitlement for export sales at international prices. Next slide, please. Despite the disruptions to production this year, the Tripartite Interim Export Agreement signed in September 2025 between the IOCs, Kurdistan Regional Government and Federal Government of Iraq have worked effectively. IOC remuneration has improved relative to local sales and payments have been consistent without delay following crude liftings. Realized prices in entitlement invoices have been very robust. with a Shaitan discount of Brent in the first half of the year at around $9 a barrel. The decrease in discount relative to Q4 2025 has been driven by strong demand for the Kukuk blend of crude marketed at Cheyhan from the Iraq-Turkey pipeline. Due to the market disruptions caused by the US-Iran conflict, some cargos of Kurdistan crude were sold at a net bag price which included a premium to the Kukuk blend official selling price. We will keep a close eye on how the discount evolves going forward, but it is too early at this stage to provide long-term guidance. In June, the Independent Consultants Review of IOC invoices and contractual costs were submitted to the Government of Iraq. Gulf Keystone and other IOCs are now focused on reconciling export sales since September 25 for international prices. As you can see from the chart, we have a top-up receivable on our balance sheet of around $80 million net to Gulf Keystone. This is estimated values the differential between cash received to date of $30 a barrel and international prices in the entitlement invoices. It remains subject to the implementation of the Independent Consultants Review. We are seeking to recover the receivable through the commencement of the districtings in September 2026. The interim export agreements have also been extended for six months to the end of January 2027. This is the final step enabling the recent restart of exports and follow the one-year extension of the Iraq-Turkey pipeline agreement earlier this month. Our focus is now on replacing the interim arrangements with longer-term agreements at international prices. Next slide, please. Chaikan remains a large, long-life asset with significant growth potential. As at the end of 2025, The Jurassic Reservoir had 416 million barrels of internally estimated gross Tupi reserves, implying a reserve life of 27 years of 2025 production levels. The field also contained 311 million barrels of estimated gross contingent resources, including 157 million barrels in the Triassic Reservoir, based on the latest CPR from 2022. Returning to stable exports and payments at international prices would provide the foundation for renewed investment in production growth. In preparation, we are discussing a revised field development plan with the M&R and positioning for a potential return to field development and drilling in 2027. The draft field development plan targets a more than doubling of current production from the Jurassic, a test of the Triassic reservoir up to 10,000 barrels a day, and the elimination of routine gas flowing through a gas management plan. We will provide further updates as we firm up our plans. With that, I'll now hand over to Gabriel for the financial review.

Thank you, Jon. We delivered a resilient financial performance in the first half of 2026. By reducing expenditures, we were able to minimize the free cash outflow, protect our balance sheets, and return cash to shareholders while continuing to program safety-critical and strategic projects. Next slide, please. The adjusted EBITDA increased 26% to $52 million in H1 2026, compared with $41 million in the first half of 2025. The increase was driven primarily by considerably higher real-life prices reflected in entanglement invoices for export sales and as well as lower operating costs. This more than offset the impact of lower production from the temporary shut-in of the shut-in field. Next slide, please. By taking decisive actions to reduce costs, we have been able to protect our balance sheet through the shut-in while maintaining our ability to quickly restart production at full capacity. Operating costs reduced by 25% to $20 million in the first half of the year relative to H1 2025 while other G&A expenses were 6% lower at $4.3 million. OPEX per barrel, while elevated over the entire period due to the lower production denominator, was around $4.4 per barrel prior to the February shut-in, in line with prior years. G&A expenses were also down in H1, despite incurring the one-off costs related to the Oslo Dual listing. Looking ahead, We remain focused on exercising strict custom control following the recent restart of production and exports. Next slide, please. The reduction in capex and cost during the period enabled us to limit the free cash outflow to $2 million. The working capital outflow primarily reflects the difference between cash received at around $30 per barrel and the international prices reflected in the entitlement invoices. As John mentioned, the difference is accrued at the top of receivables, which increased to around $80 million net GDP at the end of the period. To begin recovering the receivables, we are seeking the allocation by SOMO of additional listings of crude in September 2026, with payments expected no later than 30 days after scheduled cargoes. GKB's net entitlement of Shikenfield Stealth was approximately 36% in the first half of the year, in line with prior periods. Future net entitlement will depend on realized prices, production levels, and the outcome of the ongoing commercial negotiations with the Ministry of Natural Resources. A return to international prices would quickly defeat the current report's cost goals, incentivizing future investments. Next slide, please. GKT's robust balance sheets and ability to moderate expenditures enable us to weather the disruption in the first half of the year while paying a $12.5 million semi-annual dividend in April. We remain committed to returning excess cash to shareholders. We are therefore pleased today to announce an interim semi-annual dividend of $10 million for payment in September 2026. The dividend decision follows a careful consideration by the boards of JKP's operating environment, outlook, and cash balance. Achieving full PSE entitlement for export sales could strengthen cash flow generation in the second half of the year while the company maintains significant flexibility to reduce capex and costs if required. As Jon mentioned, export sales at international prices would also support a return to field development and drilling in 2027 as we firm up our plan with the Ministry of Natural Resources. Looking ahead, we will remain true to our strategy, balancing disciplined investment in production growth while shareholder distribution and a robot balance sheet. With that, I will lend out to Jon for closing remarks.