Gulf Keystone Petroleum (LSE:GKP) has revealed a deal to merge with ShaMaran Petroleum, creating what the two companies describe as a leading independent oil producer focused on the Kurdistan Region of Iraq and Federal Iraq.
The deal was announced alongside an operational and corporate update in which the London, which operates the Shaikan field in Kurdistan, said production and export operations are continuing with full well capacity of approximately 45,000 barrels of oil per day (bopd).
Shaikan output has been volatile through 2026, with the field shut in twice on security grounds, once between 28 February and 23 June and again between 19 July and 15 August, before resuming and climbing back toward full capacity.
Gulf Keystone also said a maiden top-up cargo was lifted recently after Iraq's State Oil Marketing Organisation allocated additional barrels to reconcile part of its fourth-quarter 2025 export sales to international prices, a step toward the reconciliation process it has been pursuing since securing a six-month extension of its tripartite export agreements to the end of January 2027.
Read more about Gulf Keystone Petroleum
The company is preparing for a return to drilling and field development in 2027, but said supply chain constraints have pushed back the start-up of the water handling project at production facility PF-2, intended to unlock incremental output, to the second quarter of 2027.
Gulf Keystone noted that it remains debt-free, with cash of $48.2 million as of 19 October, down from the $63.5 million it reported at the end of August after declaring a $10 million interim dividend.