Update on New Blocks
Gulf Keystone Petroleum Ld
25 April 2005
25 APRIL 2005
GULF KEYSTONE PETROLEUM LIMITED
("Gulf Keystone" or "the Company")
UPDATE ON NEW BLOCKS
Gulf Keystone Petroleum, Ltd. (AIM-GKP), an independent oil & gas exploration
company, is pleased to announce that following the award of two contracts in the
Algerian Sixth Licensing Round it has increased the size of its total holdings
in the Republic of Algeria to more than 22,700 square kilometres. The contracts
significantly increase Gulf Keystone's existing Algerian portfolio, previously
consisting of block 126a, by adding an additional six blocks. A total of 35 bids
were placed involving 25 companies for 9 blocks. The other license winners were
Shell (2 blocks), BHP (2 blocks), and BP (3 blocks).
On April 23, 2005, Gulf Keystone signed contracts with the Algerian Ministry of
Energy and Mines for both the Hassi Ba Hamou perimeter (blocks
317b1-322b3-347b-348-349b) in central Algeria's Bechar Oued Namous Basin, and
the Bottena perimeter (Block 129) in north eastern Algeria's Constantine Basin.
Hassi Ba Hamou Perimeter
The Hassi Ba Hamou perimeter covers an area of 18,380 square kilometres and
contains one existing gas field, HBH, which SONATRACH's engineers estimate
contains over 1 trillion cubic feet of gas in place. The HBH Field was
discovered in 1965 before the existence of the gas pipeline that now crosses the
block, and, thus, has never been developed and put on production. The HBH-1
discovery well flowed at an initial rate of approximately 3 million cubic feet
per day from porous sands above 3,200 feet depth. SONATRACH's interpretation of
the previously acquired 4,069 kilometres of 2D seismic has identified 8
additional prospects and leads with combined exploratory potential of an
additional 4.4 trillion cubic feet of gas in place. Gulf Keystone plans to
appraise the existing discovery, HBH-1, drill two exploration wells, acquire 100
square kilometres of 3D seismic and acquire 400 kilometres of 2D Seismic during
the first three year phase of the contract.
Bottena Perimeter
The Bottena perimeter covers an area of 4,368 square kilometres and is situated
next to the eastern border of Gulf Keystone's Block 126a extending eastward to
the Tunisian border. The license area contains the Djebel Onk Field, which is
excluded from the license, and the Hassi El Kerma (HEK) Field which was
discovered in 2001 and which SONATRACH identifies as containing 178 million
barrels of oil in place (27 million barrels defined as proven and probable).
This is more than 2.5 times larger than the resources they attribute to Djebel
Onk which to date has produced 9 million barrels of oil. SONATRACH recently
drilled two additional structures, on the permit area, DDN (2000) and HCZ
(2002). SONATRACH have estimated that these structures contain a combined 182
million barrels of oil in place. Using its 5,300 kilometres of 2D seismic,
SONATRACH has mapped an additional two prospects and 21 leads that they assign
estimated oil in place resources of more than 750 million barrels.
Finally, SONATRACH has drilled 4 wells on what was the first hydrocarbon
discovery in the basin (1954), the Djebel Foua Field. SONATRACH has previously
tested gas at rates greater than 8 million cubic feet per day from depths above
than 3,000 feet. This field is only 20 kilometres from the Trans-Mediterranean
Pipeline. Gulf Keystone intends to appraise the discoveries Hassi El Kerma and
Djebel Foua, drill one exploration well and acquire additional 2d and 3d seismic
on the Bottena Perimeter.
The Company also confirms that drilling on GKS-3 commenced on Thursday 7 April.
Todd Kozel, Chief Executive Officer of Gulf Keystone said:
"We have significantly increased our opportunities in the Algerian oil and gas
sector. Whilst Gulf Keystone will have the benefit of appraising the existing
oil & gas discoveries on these newly awarded blocks, we will also actively
pursue the substantial exploration upside that SONATRACH estimates as over 1.5
billion barrels of oil equivalent in place."
Enquiries
Evolution Securities 020 7071 4300
Robert Collins
Citigate Dewe Rogerson 020 7638 9571
Martin Jackson/George Cazenove
This information is provided by RNS
The company news service from the London Stock Exchange
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