Gulf Keystone Petroleum and ShaMaran Petroleum have signed agreements to merge in an all-share transaction that values the latter at roughly $601m.
The boards of both companies unanimously approved the transaction, which, if completed, will create an independent oil producer with a focus on the Kurdistan Region of Iraq and Federal Iraq.
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The deal, structured as a statutory merger under Bermuda corporate law, will see ShaMaran fold into Gulf Keystone, which will survive as the listed entity.
ShaMaran shareholders will be issued nearly 0.0753 new Gulf Keystone shares for every ShaMaran share they hold.
The ratio delivers a 22.9% premium over ShaMaran’s closing price on 19 October 2026, rising to 28.6% and 32.2% against the stock’s 30-day and 90-day volume-weighted average prices, respectively.
Gulf Keystone’s current shareholders are in line for a special dividend totalling $50m on completion.
Once the merger closes, each group of shareholders will control approximately 50% of the enlarged company.
The combination will bring together four producing assets with aggregate working interest proved and probable (2P) reserves estimated at 323 million barrels (mbbl) and pro-forma output of around 53,000 barrels of oil per day (bopd).
The merged group would sit among the ten largest listed independent oil producers in Europe and carry a market capitalisation above $1bn.
Gulf Keystone non-executive chair David Thomas said: “The merger creates a stronger company with greater scale, a highly complementary portfolio and a stronger cash flow profile.
“Expected near-term cash flow from ShaMaran’s assets complements the long-term growth potential of the combined company, enhancing our ability to invest in growth while delivering attractive and sustainable shareholder distributions.”
ShaMaran’s producing interests are run by HKN Energy, and in a separate announcement made alongside the merger, ShaMaran disclosed a new investment in a 25% holding in HKN Hamrin, adding further reserve and resource potential.
The Swedish-Canadian entrepreneurial Lundin family, which owns around 25.6% of ShaMaran, and Lansdowne Partners Austria, which manages approximately 13% of Gulf Keystone, have each stated their intention to vote in favour.
Under the proposed governance arrangements, the Lundin family will hold the largest stake in the combined group, with William Lundin put forward as non-executive chair.
Shareholder votes are scheduled for on or about 22 December 2026.
The merged company plans to seek a primary listing on Euronext Oslo Børs and intends in due course to withdraw from the London Stock Exchange.
Separately, ShaMaran is preparing to refinance its 2029 bond, which has around $144m outstanding, through a fresh issuance.
Gulf Keystone is also weighing a potential bond to help fund further development of its Shaikan field.
