Gulf Keystone provided an update on its active work program in Kurdistan.
Sheikh Adi - 1
The Sheikh Adi-1 exploration well is currently at the 13.375 inch casing point at the bottom of the Cretaceous interval after side tracking around a section of the bottom hole assembly that had become stuck in the open hole. The forward plan is to set 13.375 inch casing and drill out into the top of the Jurassic age formations and the first of the primary exploration targets for this well.
The Shaikan-2 appraisal well (9 km east of Shaikan-1) is currently drilling 17.5 inch hole at approximately 1,210 meters. The forward plan is to drill to the bottom of the Cretaceous interval, set 13.375 inch casing and then drill into the first of the Jurassic age target intervals.
Extended Well Test
The Shaikan-1 discovery well and the Shaikan-3 well are both now tied into the extended well test facility and ready to produce from the Jurassic age Sargelu reservoir. To date, the Company has sold over 63,000 barrels of oil into the domestic Kurdistan market, which has yielded valuable commercial and marketing information. The Company has signed an initial quarterly sales contract for 2,500 tons (for Sargelu crude oil, one ton equals 6.7 barrels) of oil per week to be sold into the Kurdistan domestic market.
3D Seismic Program
The 3D seismic data acquisition program has been fully completed on both the Shaikan and the Sheikh Adi structures. Data processing and seismic interpretation will continue until at least June of this year.
The location for this well, the second deep appraisal well on the Shaikan structure (6 km west of Shaikan-1), has been completed and the Company has signed a letter of intent with AOS for their Discoverer 3 drilling rig. This 2000 hp rig will begin moving from Tunisia to Kurdistan in February and well spud is currently anticipated by the end of March. Shaikan-4 is targeted to drill the Jurassic and Triassic age formations and if warranted, into the top of the Permian.
Kalegran (100% subsidiary of MOL) is currently rigging up on the Bekhme-1. This well is designated as a Jurassic exploration well with a target depth of 2,900 meters (depending on well results). The well is expected to spud by mid March.
John Gerstenlauer, Gulf Keystone's Chief Operating Officer commented, "We will very shortly have two appraisal wells and two exploration wells underway in Kurdistan. We are very excited about the possibilities that this implies for our holdings in Kurdistan and we are looking forward to a very interesting and rewarding 2011."
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