It’s been a turbulent few months for Gulf Keystone Petroleum (LSE: GKP) (NASDAQOTH: GFKSY.US) shareholders, and I’m pretty sure that this week’s AGM should be a lively occasion.
Or at least it might be, if Gulf Keystone wasn’t sticking to its dubious tradition of holding shareholder meetings outside the UK. Last year’s AGM was in Bermuda, pretty much guaranteeing that private shareholders would be unable to attend.
This year, it’s in Paris, which is better, although it’s hard to avoid the conclusion that this is a deliberate choice, aimed at limiting the attendance of troublemakers (sorry, private shareholders).
I won’t be able to attend, but in case you are, I’ve put together a list of three questions I believe chairman Simon Murray should address.
1. Are oil buyers paying promptly?
One of the largest oil and gas producers in Kurdistan is UAE-based Dana Gas, which leads a consortium producing 80,000 barrels of oil equivalent a day.
Dana recently won an interim arbitration award in London, regarding outstanding payments from the Kurdistan Regional Government (KRG). The firm claims that the KRG owes the Dana-led consortium a total of $1.46bn.
Gulf Keystone is selling oil into both the domestic and international markets, and my question for Mr Murray is whether Gulf Keystone is receiving prompt payments for oil sold, or if there is a backlog?
2. Can we have some directors, please?
In the last month, Finance Director Ewen Ainsworth and three non-executive directors have all resigned, while chief executive Todd Kozel has announced his intention of standing down from the CEO role.
This means that as of Thursday, Gulf Keystone will not have a permanent finance director or a CEO. As a result, I have two questions for Mr Murray.
Firstly, has any progress been made in finding replacements for any of these directors?
Secondly, assuming outgoing CEO Todd Kozel is re-elected to the board as an executive director, can Mr Murray provide more clarity Mr Kozel’s future role, his remuneration, and the nature of his commitment to the company, given his lack of a significant shareholding? (Mr Kozel only owns 255,004 shares in the company he founded).
3. Operations and funding
Can the board provide an update on Shaikan field development operations: does the company expect to be able to complete the development of production facility PF-3 and its associated wells in 2015 from cash flow and existing resources, or will further fundraising be needed?