Gulf Keystone has set the intermediate 9-5/8" casing on its Shaikan-1 exploration well operated by Gulf Keystone Petroleum International (50% GKP, 50% ETAMIC). The well is located in the Shaikan Block, situated near the city of Dihok, in the Kurdistan region of northern Iraq.
Casing has been set at 2,275 meters and completes our drilling of the Jurassic portion of the exploration well. Prior to setting the casing, the open hole interval was logged and preliminary log results indicate the addition of approximately 80 additional net meters of oil pay from the Butmah formation to previously announced discoveries in the Sargelu, Alan and Mus formations.
With the drilling of the Butmah formation, the gross reservoir interval has increased from 335 meters to 575 meters and the net reservoir interval has increased from 93 meters to 172 meters.
This additional reservoir section exhibits low energy with oil gravities in the range of 18 degrees API and very little associated gas. As with other pay intervals encountered in this well, there is a well developed, natural fracture system throughout the carbonate pay intervals. The drilled formations have excellent overall permeability, often in excess of 5 darcies. At this initial stage, the well characteristics indicate that the application of standard production technology, such as electric submersible pumps, should result in commercial production rates and this will be evaluated as part of an extended well test following completion of the well.
These log results combined with knowledge gained from the previously announced interval has raised the estimation of the total barrels of oil in place by the Gulf Keystone internal technical team. Based upon the Company's own internal analysis, this data provides for a revised range of oil-in-place volumes for the Shaikan structure of between 2.0 and 4.0 billion barrels for the oil in place, encountered thus far.
Drilling into the top of the Triassic formations has begun and the Company anticipates reaching a final drilling depth of 3,200 to 3,500 meters, subject to well results.
Todd Kozel, Chairman and Chief Executive Officer of Gulf Keystone, commented, "The incremental volumes found in the Butmah formation give further encouragement that we have made an outstanding discovery which will prove transformational for Gulf Keystone."
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