Company Update

Gulf Keystone Petroleum Ld
20 February 2006

       Gulf Keystone Petroleum Limited ("the Company" or "Gulf Keystone")

                                     Update

The Company has previously announced that it is reviewing the possibility of
bringing in potential partners into certain of the Company's Algerian licences.
Ahead of, and in conjunction with this, the Board recently commissioned an
internal review of its entire potential reserve and resource base, covering the
newly acquired Blocks 129, 108, 128, 317b, 322b, 347b, 348, 349b together with
its original holding in Block 126a.

As an integral part of that review, a detailed evaluation of the production
sharing contracts for each licence has been carried out together with a
calculation of the likely net reserves allocation to Gulf Keystone that would
result from those contracts. It should be noted that the net allocation can vary
annually when factors such as capital investment, production levels and product
prices are considered. Accordingly, the contract terms that determine
entitlement are different for each block.

In the case of Block 126a, an evaluation of the cost recovery provisions
contained in the production sharing contract for Block 126a indicates that the
percentage of net reserves that would be attributable to Gulf Keystone, from any
commercial development within Block 126a, would, the Company believes, be
materially lower than was indicated in the last independent review of the
Company's reserves contained in the Competent Persons Report of September 2004
set out in the company's AIM admission document.

In view of the internal reserves review that the Company is presently
completing, the significant drilling and work-over activity that the Company has
carried out since the last independent resource review in 2004 and the very
substantial expansion of the Company's portfolio of oil and gas assets that has
taken place since that time, the Company is now commissioning a full, updated
and independent review of the Company's resource potential. This is expected to
be completed and available within 8-10 weeks.

Enquires:

Citigate Dewe Rogerson                       0207 638 9571

Media: Martin Jackson/George Cazenove

Analysts: Nina Soon/ Kate Delahunty


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