Kurdistan Operational Update

RNS Number : 8307T

Gulf Keystone Petroleum Ltd.

13 December 2011

 



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.

13 December 2011

Gulf Keystone Petroleum Ltd. (AIM: GKP)

("Gulf Keystone" or "the Company")

Kurdistan Operational Update

Gulf Keystone today provides an update on its ongoing exploration and appraisal programme in the Kurdistan Region of Iraq, which includes the Shaikan block, a major discovery with independently audited gross oil-in-place volumes of between 8 billion barrels to 13.4 billion barrels calculated on the P90 to P10 basis with a mean value of 10.5 billion barrels.

Shaikan-4 Appraisal Well

Gulf Keystone has completed drilling of the Shaikan-4 appraisal well, 6 km to the west of the Shaikan-1 discovery well, to a total depth (TD) of 3,387 metres in the middle Triassic with 2,375 metres of total gross pay interval. The well has been drilled through the Jurassic (Sargelu, Alan, Mus and Butmah formations) and the upper and middle Triassic (Baluti, Kurre Chine A and Kurre Chine B formations) with an indication of potential new Jurassic reservoirs in Sargelu sands and Barsarin carbonates. 

The Company is now embarking on a well testing programme for Shaikan-4 which will target several formations in the Jurassic and Triassic, including the Chia Gara/Barsarin, Sargelu, Butmah, Kurre Chine-A, Kurre-Chine-B and Kurre Chine-C formations.

Preliminary results from Shaikan-4 formed part of the new data used by Dynamic Global Advisors (DGA), independent Houston-based exploration consultants, to calculate the most recent significant upgrade of the gross oil-in-place volumes for the Shaikan discovery announced in November 2011.

Shaikan-5 Appraisal Well

The Shaikan-5 appraisal well, 6 km to the north-east of the Shaikan-2 appraisal well, has drilled to a measured depth of 856 metres and 20" casing is currently being set. The well will then continue drilling to the estimated TD of 3,500 metres subject to technical conditions.

Shaikan-6 Appraisal Well

The move of the WDI 842 rig to the location of the Shaikan-6 appraisal well is ongoing. The well, which will be drilled 9 km to the east of the Shaikan-2 appraisal well, is due to spud in December 2011. Estimated TD for Shaikan-6 is 3,800 metres subject to technical conditions.

Shaikan oil sales

Gulf Keystone has recommenced sales of the Shaikan crude to the domestic market of the Kurdistan Region of Iraq at a rate of about 1,500-2,000 barrels of oil per day.  This initial rate for the crude produced at the Shaikan-1 & 3 Extended Well Test (EWT) facilities has been set to meet current domestic oil sales specifications. Volumes of oil production and sales, both into the domestic and export markets, are due to increase significantly after the ongoing upgrade of the Shaikan-1 & 3 EWT facilities has been completed.

Gulf Keystone is the Operator of the Shaikan block with a working interest of 75 per cent and is partnered with Kalegran Ltd. (a 100 per cent subsidiary of MOL Hungarian Oil and Gas Plc.) and Texas Keystone Inc., which have working interests of 20 per cent and 5 per cent respectively.

Ber Bahr-1 Exploration Well

The first exploration well on the Ber Bahr block has drilled to a measured depth of 1,765 metres   at the top of the Triassic with hydrocarbons indications observed in the well. Wireline logging is underway which will be followed by running of 9 5/8" casing. The well will then continue drilling to the estimated TD of 2,100 metres.   

Gulf Keystone has a 40 percent working interest in the Ber Bahr block operated by Genel Energy, which holds a 40 percent working interest in the block. The Kurdistan Regional Government has a 20 percent carried interest in the Ber Bahr Production Sharing Contract. The Operator's resource estimate for the Ber Bahr block is 1.5 billion barrels of oil equivalent-initially-in-place.

Bekhme-1 Exploration Well

The testing programme for Bekhme-1, the second exploration well on the Akri-Bijeel block drilled 20 km to the north-east from the Bijell‑1 discovery well, is ongoing. After the testing programme has been completed in December, the Operator will issue an appropriate announcement.

Gulf Keystone has a 20 percent working interest in the Akri-Bijeel block operated by Kalegran Ltd., 100% subsidiary of MOL Hungarian Oil and Gas Plc., which holds 80 percent working interest in the block. Operator's P50 resource estimate for the Akri-Bijeel block is 2.4 billion barrels of oil-in-place.

John Gerstenlauer, Gulf Keystone's Chief Operating Officer commented:

"Following our recently completed tests at the Shaikan-2 appraisal well, we plan to replicate this successful programme at Shaikan-4. Our preliminary results for this well are very promising and we look forward to the Shaikan-4 well testing programme which is yet another step in the process of unlocking the full potential of the giant Shaikan discovery in the Kurdistan Region of Iraq. In this regard, the recommencement of our domestic oil sales is particularly significant as we prepare to upgrade the existing test production facilities and ramp up both domestic sales and oil exports of the Shaikan crude in the first half of 2012."  

Enquiries:

Gulf Keystone Petroleum:	[phone]
Todd Kozel, Executive Chairman and Chief Executive Officer
Ewen Ainsworth, Finance Director
Strand Hanson Limited	[phone]
Simon Raggett / Rory Murphy / James Harris
Mirabaud Securities LLP	[phone]
Peter Krens
Pelham Bell Pottinger	[phone]
Mark Antelme

or visit: www.gulfkeystone.com

John Gerstenlauer, the Company's Chief Operating Officer, who has 31 years of relevant experience within the sector and meets the criteria of a qualified person under the AIM note for mining, oil and gas companies, 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 and production company focused on exploration in the Kurdistan Region of 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 of the London Stock Exchange since listing on 8^th September 2004.

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

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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