Gulf Keystone Petroleum Ltd., the operator of the world class Shaikan field in the Kurdistan Region of Iraq, reported Wednesday that it has resumed production and truck loading operations at both its production facilities (PF-1 and -2), in line with the pre-payment of $26 million gross ($20.8 million net to Gulf Keystone) received for future Shaikan crude oil sales on Feb. 25. Gulf Keystone will now ramp up production to levels consistent with the installed capacity of 40,000 barrels of oil per day. The Company anticipates that a further payment of a similar nature will be received, which is expected to stabilize a payment cycle for current and future Shaikan production.
Shaikan-10, the Company's first development well and ninth producer, has demonstrated excellent productivity from the limited flow data gained to date. Drilled from the same surface location as Shaikan-10, but 1.2 miles (2 kilometers) away subsurface, Shaikan-11, an additional production well has now been completed. Shaikan-11, which will provide PF-2 with additional production capacity, was drilled nine days ahead of time and under budget. The losses observed during drilling point to Shaikan-11 being a potentially prolific producer. Furthermore, Shaikan-8 is now fully connected and able to produce into PF-1.
Commenting on today's news, John Gerstenlauer, CEO of Gulf Keystone, said:
"We are pleased to have resumed production and truck loading operations at Shaikan. Over recent weeks we have maintained a flexible and prudent approach, ensuring that we can maximize revenues from Shaikan. We remain confident of a regular payment cycle for Shaikan crude being established in the near term.
"From an operational perspective, Shaikan is performing well and we are encouraged by the initial results from Shaikan-10 and the recently completed Shaikan-11 well."
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