Spudding of Sheikh Adi-2 Exploration Well

RNS Number : 0894E

Gulf Keystone Petroleum Ltd.

25 May 2012

 



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.

25 May 2012

Gulf Keystone Petroleum Ltd. (AIM: GKP)

("Gulf Keystone" or "the Company")

Kurdistan Operational Update

Spudding of Sheikh Adi-2 Exploration Well

Gulf Keystone is pleased to announce that the Sheikh Adi-2 exploration well spudded on the Sheikh Adi block in the Kurdistan Region of Iraq. The Sheikh Adi block is located immediately to the west of the Company's Shaikan block, which is a major discovery.

Sheikh Adi-2, the second exploration well on the block, is being drilled 1.45 km to the north of the Sheikh Adi-1 exploration well, which was drilled to a total depth ("TD") of 3,800 metres in August 2011. Based on the Sheikh Adi-1 well log results from the Cretaceous, Jurassic and the upper Triassic formations, gross oil-in-place resources of 1 billion to 3 billion barrels (P90 to P10 estimates) with a mean estimate of 1.9 billion barrels were assigned to the western part of the Sheikh Adi field by Dynamic Global Advisors, the independent Houston-based exploration consultants. 

Sheikh Adi-2 will target prospective intervals in the Jurassic formation and has a planned TD of approximately 2,450 metres. The well is being drilled in the northern part of the Sheikh Adi structure with the Discoverer-4 rig, which had previously drilled the Shaikan-4 appraisal well. Based on detailed analysis of 215 km² of 3D data, which was fully processed in November 2011, this part of the structure appears to be more tightly folded and therefore the Board believes that it is more likely to have a well-developed system of natural fractures.

Gulf Keystone is the Operator of the Sheikh Adi block with an 80 per cent working interest, while the Kurdistan Regional Government has a 20 per cent carried interest.

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

"Sheikh Adi-2 is a significant addition to our extremely active 2012/2013 drilling programme in the Kurdistan Region of Iraq.  To date, we have completed or are currently drilling 13 exploration and appraisal wells across the four blocks in the region in which we have interest. The location for this well has been carefully selected and we believe that with Sheikh Adi-2 we are targeting a section of the reservoir which is potentially more naturally fractured and much more similar to the Shaikan discovery. Our present goal is to prove up the impressive preliminary resource estimates for the Sheikh Adi block of 1 to 3 billion barrels of gross oil-in-place (P90 to P10 estimates), which were assigned by Dynamic Global Advisors as a result of the Sheikh Adi-1 drilling.  In the future, this well will benefit from its proximity to the available infrastructure on the adjacent Shaikan block."

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

§ Gulf Keystone Petroleum International (GKPI) holds Production Sharing Contracts for fourexploration blocks in Kurdistan, including the Shaikan, Sheikh Adi, Ber Bahr and Akri-Bijeel blocks.

§ Shaikan is 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.

§ The Company's shares have traded on the AIM market of the London Stock Exchange since listing on 8^th September 2004.

§ Gross oil-in-place (or petroleum-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 (petroleum-initially-in-place) volumes is represented by a probability distribution with a low, mid 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; P50 represents at least a 50% probability (mid) that the quantities determined to be in place will equal or exceed the mid 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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