Capital Raising & Kurdistan D

RNS Number : 4643M

Gulf Keystone Petroleum Ltd

25 May 2010

 



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

25 May 2010

Gulf Keystone Petroleum Ltd.

("GKP", "Gulf Keystone" or "the Company")

Fully Subscribed $165 million Capital Raising and

Kurdistan Drilling Campaign Update

Gulf Keystone Petroleum Ltd. (AIM: GKP; ADR: GFKSY), the independent oil and gas exploration company, announces that it has today completed a fully subscribed placing (the "Placing") of 152,300,000 new common shares of $0.01 (the "Placing Shares") at a placing price of 75p per share (the "Placing Price"), raising gross proceeds of approximately $165 million (£114.2 million). These shares were placed by Mirabaud Securities, Renaissance Capital, Fox-Davies Capital Limited and Madison Williams and Company with existing and new institutional shareholders. The net proceeds will be used to progress the remainder of its 2010 and early 2011 work programmes after receiving positive results from the early stages of its drilling campaigns in Kurdistan. 

Gulf Keystone also today provides an update for its drilling campaign in the Kurdistan Region of Iraq ("Kurdistan").  

Use of Proceeds

The proceeds raised will be used primarily to progress the three Shaikan appraisal wells, the Shaikan-1 extended well test and production facilities, Sheikh Adi exploration well and the acquisition of further 3D seismic data over Shaikan and Sheikh Adi licences. The funds raised will also be used for any future increase in GKP's interests in Kurdistan assets.

Admission of New Shares 

Application has been made for the Placing Shares to be admitted to trading on AIM with dealing expected to commence on 28 May 2010.   

Following the Placing there will be 672,185,122 common shares of $0.01 in issue.

Drilling campaign update

Seismic survey progress

On 20 April 2010, GKP's seismic contractor, Terraseis commenced acquisition of the 530 km² 3D seismic survey over the Shaikan structure. To date, fourteen per cent of the acquisition has been conducted, with completion expected by September 2010.

The survey follows on from the 2D seismic programme on Shaikan in 2008 and will be extended to cover the Sheik Adi block in the event of encouraging early results on the exploration well at Sheikh Adi.

Shaikan-1 well work over (SH-1B), EWT and Temporary Facilities

A work-over rig has been contracted from Arar Petrol Ve Gaz Arama Uretim Pazarlama and is scheduled to arrive at SH-1B at the beginning of June, to enable short term production testing of several previously tested Jurassic targets (DST zones 2 and 3) using an electric submersible pump.

Immediately following on from this, an extended well test will be performed in the initial upper Jurassic discovery zone in Shaikan-1 (DST #1). As previously announced, current evaluated data indicates the zone to be capable of a flow-rate of approximately 8,000 to 10,000 bopd. Hydrocarbon flows will be received into a temporary production facility which is currently under construction. The first shipment of equipment for this facility is expected to leave from Canada in May 2010 with production expected to commence in August 2010.

Shaikan-2 appraisal well (SH-2)

SH-2 will be the first appraisal well drilled on the Shaikan structure, and will be used to evaluate the Cretaceous, Jurassic and all zones in the Triassic through to the Permian, in which total oil in place volumes of 1.9 (P90) to 7.4 (P10) billion barrels, with a mean value of 4.2 billion barrels, were discovered.

The well location 9km to the east of SH-1 has been constructed and is awaiting the return of the WDI rig-842 from the Akri-Bijeel Block, expected towards the end of May 2010.

Shaikan-4 appraisal well (SH-4)

SH-4 will be the second appraisal well drilled in the Shaikan structure and will appraise all zones down to and including the upper Triassic, with an option to go to the Permian.

The well location 6km to the west of SH-1 is being constructed and the well will be spudded in Q4 2010.

Shaikan-3 appraisal well (SH-3)

The appraisal well at SH-3, targeting the shallow Cretaceous zone, will be located near Shaikan-1. It will be drilled using the rig currently operating at SH-1B immediately following completion of the SH-1B work-over, and should spud in Q3  2010.

Sheikh Adi-1 exploration well (SA-1)

Construction has been completed on the well location of SA-1, the first exploration well in the Sheikh Adi block. The well will be drilled using the Atlantic Onshore Services rig, Discoverer-1, which is currently expected to arrive during July.

SA-1 will explore all zones down to and including the upper Permian and is on schedule to spud in the third quarter of 2010.

Bijeel-1 Exploration well

The Bijeel-1 exploration well in the MOL operated Akri Bijeel block is very near final TD and is still conducting operations to test and evaluate recent drilling results.

Todd Kozel, Executive Chairman and CEO of Gulf Keystone, commented: 

"The sums raised secure our development and appraisal program across Gulf Keystone's assets in Kurdistan for the coming months. The results of the early stages of GKP's 2010 work programme have been very positive and we do not want to lose this momentum. We have already made two discoveries and still have two blocks and a number of appraisal wells to drill. While we still have a lot of work ahead of us, we are very excited about our prospects."

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
Renaissance Capital Limited	[phone]
Ed Johnson / Simon Matthews
Brunswick Group LLP	[phone]
Patrick Handley / Elizabeth Adams / Natalia Erikssen

or visit: www.gulfkeystone.com

John Gerstenlauer, the Company's Chief Operating Officer, who has 31 years of relevant experience within the sector meets the criteria of a qualified person under the AIM note for mining, oil and gas companies and has reviewed and approved the technical information contained in this announcement.  Mr. Gerstenlauer is a member of the Society of Petroleum Engineers.

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 four exploration blocks in Kurdistan.

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

§  The Company established a sponsored Level 1 American Depositary Receipt ("ADR") programme on 5th December 2008. The ADRs are traded under the ticker symbol GFKSY in the US over-the-counter ("OTC") securities market of Pink OTC Markets Inc. (www.pinksheets.com). On 26^th April 2010 GKP's ADRs commenced trading on OTCQX under the ticker symbol GFKSY.

§  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.

 

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