Gulf Keystone Petroleum (GKP) M&A announcement summary

Deal rationale and strategic fit

• Combines Shaikan with ShaMaran’s stakes in Atrush, Sarsang and Hamrin, creating a diversified portfolio of four low-cost, long-life assets across Kurdistan and Federal Iraq.

• Estimated working-interest 2P reserves of 323 MMbbl and pro forma production of 53 kbopd, nearly doubling production.

• Cash-generative Atrush and Sarsang positions are expected to support development investment at Shaikan and Hamrin.

• HKN Energy’s operating role and the complementary asset base are expected to support resilience and further regional growth.

Financial terms and conditions

• Bermuda statutory merger; ShaMaran holders receive 0.07533958 newly issued shares per share, resulting in approximately 50/50 ownership.

• Existing holders are due a $50m special dividend at completion; if the merger has not closed by late August 2027, each party may distribute up to $50m.

• Implied pro forma market capitalization of $1.202bn, net of the dividend, based on 19 October 2026 closing prices; ShaMaran equity valued at USD 601m.

• Transaction is not financing-contingent; ShaMaran plans to refinance its 2029 bond, with ~USD 144m outstanding, and a bond for Shaikan capex is under consideration.

• Distribution policy is expected to be formalized, potentially combining a regular base dividend with additional distributions during periods of excess cash flow.

Synergies and expected cost savings

• Annual G&A synergies estimated at up to $5m through optimization of corporate costs.

• A single Oslo listing is expected to consolidate trading volume and reduce listing costs; HKN operational collaboration may enable efficiency and best-practice sharing, with no value assigned.

• Greater scale and diversification are expected to support the credit profile and access to debt financing over time.