Establishment of Employee Ben

RNS Number : 1393N

Gulf Keystone Petroleum Ltd

07 June 2010

 



Not for release, publication or distribution in or into the United States or jurisdictions other than the United Kingdom and Bermuda where to do so would constitute a contravention of the relevant laws of such jurisdiction.

7 June 2010

Gulf Keystone Petroleum Ltd.

("Gulf Keystone" or the "Company")

Establishment of Employee Benefit Trust and Intentions regarding Share Option Grants and Awards under the Executive Bonus Scheme

Employee Benefit Trust

Gulf Keystone Petroleum Limited (AIM: GKP) announces that it has executed the Gulf Keystone Employee Benefit Trust (the "Trust") and settled an initial cash contribution on the independent trustee (the "Trustee"). Future funding is anticipated to be made by way of loan from the Company. The Trustee may acquire common shares in the Company, by subscription or by purchase, and, at the discretion of the Trustee, make available interests in those common shares for the benefit of Directors and employees under the Company's Share Option Plan and Executive Bonus Scheme (the "Plans").

The Company is often in a close period, as defined in the AIM Rules for Companies, due to the nature of its operations and therefore the directors of the Company (the "Directors") are often not permitted to deal in the Company's shares. 

Accordingly, the Company will recommend to The Trustee that the following awards and option grants are made when the Company is not in a close period:

Executive Bonus Scheme for 2009

It is recommended that the Trustee make discretionary awards for 2009 on the same terms as the Company's Executive Bonus Scheme ("Executive Bonus Scheme") such that no more than one third of the maximum number of common shares set out below will be considered for award in each year. The maximum number of common shares available under the Executive Bonus Scheme for 2009 for the Directors is set out below.

Todd Kozel                    5,000,000 common shares

Ewen Ainsworth             1,000,000 common shares

John Gerstenlauer          1,000,000 common shares

Ali Al-Qabandi               1,000,000 common shares

Mehdi Varzi                   100,000 common shares

Lord Peter Truscott        100,000 common shares

In total, it is recommended that the Trustee award 11,519,000 common shares for 2009 under the Executive Bonus Scheme to Directors and employees.

Share Option Plan with Long Term Incentive Performance Conditions

The Remuneration Committee of the Company, following extensive review by external advisers, has proposed structured option grants under the existing Share Option Plan with stretching performance criteria known as the Long Term Incentive Performance Conditions.  It will be recommended that the Trustee grant the following Directors share options ("LTIP Share Options") over the number of common shares shown below, at a price to be determined but not substantially less than the market price of the shares at the time of grant.

Todd Kozel                    9,766,473 common shares

John Gerstenlauer          1,953,295 common shares

Ewen Ainsworth             1,953,295 common shares

The LTIP Share Options will be available for exercise in equal tranches over 3 financial years and be subject to the following performance conditions:

i) One third of the LTIP Share Options will be subject to operational performance conditions as follows:

·      50% of the one third tranche of LTIP Share Options will vest only on the achievement of sustained production of at least 8,000 barrels of oil per day resulting in sustained oil sales and revenue flow;

·      30% of the one third tranche of LTIP Share Options will vest only on successful resource addition through a combination of appraisal and production testing resulting in a significant movement of P10 hydrocarbon in place resources to P90 hydrocarbon in place resources; and

·      20% of the one third tranche of LTIP Share Options will vest only in the event of a significant new discovery.

ii) One third of the LTIP Share Options will vest on the share price reaching 150 pence.

iii) One third of the LTIP Share Options will vest on the share price reaching 200 pence.

A total of 22,500,000 common shares may be the subject of LTIP Share Options for Directors and employees.

Directors Interests in Shares

Assuming the proposed awards in relation to the Executive Bonus Scheme for 2009 and proposed grant of LTIP Share Options are made the interests of the Directors are set out in the table below. These figures will be confirmed following the actual awards and grants. These interests comprise the following:

-     existing common shares held by Directors

-     proposed award of common shares under the Executive Bonus Scheme for prior years and 2009

-     existing share options and proposed LTIP Share Options

	Total number of common shares held as at 7 June 2010	Potential award of common shares under the Executive Bonus Scheme	Number of options over common shares under the Share Option Plan including proposed grants
Todd Kozel*	4,084,448	5,166,667	12,766,473
Ewen Ainsworth	538,414	1,150,000	2,953,295
John Gerstenlauer	0	1,000,000	3,953,295
Ali Al-Qabandi*	5,300,000	1,150,000	1,000,000
Mehdi Varzi	180,000	0	100,000
Lord Peter Truscott	500,000	0	100,000

* Todd Kozel and Ali Al-Qabandi are shareholders in Gulf Keystone Petroleum Company LLC which owns 40,000,000 common shares

Enquiries:

Gulf Keystone Petroleum	[phone]
Todd Kozel, Executive Chairman
Ewen Ainsworth, Chief Financial Officer
Strand Hanson Limited	[phone]
Simon Raggett / Rory Murphy / James Harris
Mirabaud Securities LLP	[phone]
Peter Krens
Brunswick Group LLP	[phone]
Patrick Handley

or visit: www.gulfkeystone.com

Notes to Editors:

§  Gulf Keystone Petroleum Ltd. (AIM: GKP) is an independent oil and gas exploration company focused on exploration in the Kurdistan region of Northern Iraq.

§  Gulf Keystone Petroleum International (GKPI) holds Production Sharing Contracts for fourexploration blocks in Kurdistan.

§  The Company's shares have traded on the AIM market, since listing on 8 Sept 2004.

§  Gulf Keystone Petroleum Limited is registered in Hamilton, Bermuda with offices in Erbil, Kurdistan, Algiers, Algeria and London, UK.

§  Oil initially-in-place is that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The range of uncertainty of the oil-in-place volumes is represented by a probability distribution with a low and high provided: P90 represents at least a 90% probability (high) that the quantities determined to be in place will equal or exceed the low estimate and P10 represents at least a 10% probability (low) that the quantities determined to be in place will equal or exceed the high estimate.

Not for release, publication or distribution, directly or indirectly, in or into the United States or jurisdictions other than the United Kingdom and Bermuda where to do so would constitute a contravention of the relevant laws of such jurisdiction. This document (and the information contained herein) does not contain or constitute an offer of securities for sale, or solicitation of an offer to purchase securities, in the United States or jurisdictions other than the United Kingdom and Bermuda where to do so would constitute a contravention of the relevant laws of such jurisdiction. The securities referred to herein have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States unless the securities are registered under the Securities Act, or an exemption from the registration requirements of the Securities Act is available. No public offering of the securities will be made in the United States.

 

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