Gulf Keystone Petroleum Ltd. has completed a fully subscribed placing of 89,509,488 new ordinary shares at a placing price of 28p per share raising gross proceeds of approximately £25.10 million. These shares were placed by the Company's brokers, Tristone Capital Ltd. and RBC Capital Markets, with institutional clients and certain of the Company's Directors, management and associates.
Use of Proceeds
Together with the Company's existing cash balances and forecast cash flow from oil production the net proceeds of the Placing will be used to fund the further exploration and appraisal of the HBH Permit in Algeria and the drilling of an additional well in Kurdistan.
The HBH Permit, which contains the HBH gas field, comprises five blocks within an area of 18,380 square kilometers in the Bechar Basin in Algeria's Western Desert. Gulf Keystone and its partners are currently drilling the fourth well of a six well campaign. Following the recently announced success of the RM-1 exploration well, Gulf Keystone and its partners agreed to go into the second prospecting period of the HBH Permit ("Phase 2"). Phase 2 includes a work program obligation of 500 km2 of 3D seismic, 1 exploration well and 2 appraisal wells. In addition the Company and its partners are considering acquiring additional discretionary 2D and 3D seismic.
In November 2007 Gulf Keystone was awarded interests in two blocks in the Kurdistan Region of Iraq. 2D seismic has already been completed over the Shaikan Block and the acquisition of 2D seismic on the Akri-Bijeel block is ongoing. The Company has previously announced plans to drill a well on the Shaikan block, currently scheduled for early 2009. Following positive initial analysis of the acquired seismic, combined with the large reserve potential of the asset, the Company now plans to drill an additional exploration/appraisal well on its Shaikan block.
Admission of Placing Shares
Application has been made for the Placing Shares to be admitted to trading on AIM and dealings are expected to commence on July 31, 2008. Following the Placing there will be 368,000,348 shares in issue.
Todd Kozel, Chairman and CEO, said, "Gulf Keystone is at the beginning of an exciting stage in its growth. We are preparing to drill our first well in Kurdistan where our prospects have real company making potential, and our exploration and appraisal successes on HBH have encouraged us to move quickly towards the development of the HBH gas field in Algeria. Our future upside could be significant and I believe this is reflected in the investor response to the Placing, and further evidenced in the support of my fellow directors, who joined me in subscribing for new shares."
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