Struggling oil producers Gulf Keystone and Genel Energy have secured a total of $28m from the Kurdistan government for crude exports.
Gulf Keystone said it had received a March payment of $15m from the Kurdistan Regional Government just days before its looming multi-million dollar debt repayments, while Genel Energy said on Monday it had secured $13m.
The share price for both companies soared following news of the payments, with Genel shares closing more than 10pc higher after yesterday’s announcement and Gulf Keystone trading 8pc higher by late Tuesday morning. But shares remain at multi-year lows under the pressure of a heavy debt burden and continued low oil prices.
Gulf Keystone is expected to pay a debt coupon of $26.4m on April 18, and again in October. Debt payments will then escalate i
n 2017 to $250m next April and a further $325m in October 2017.
The producer said last month that it faced “material uncertainties” over whether it will meet its debt obligations because it is “unlikely” to succeed in selling off assets or completing a full corporate sale to cover its multi-million dollar debts.
Both producers are owed hundred of millions in oil payments from the regional government, which is locked in an ongoing dispute with the Iraqi government over crude revenues, and is battling the terror group Islamic State of Iraq and the Levant (Isil).
The struggle to secure payment for their oil volumes combined with the collapse in oil prices has slashed value from the companies.
Genel shares plummeted by 40pc last month after it admitted one of its biggest assets, the Taq Taq oil field, was about a third the size of initial estimates.
Genel reported a loss of $1.2bn in 2015 after it was forced to write down the value of the oil fields in light of lower prices and reserves.