Gulf Keystone Spuds First Well on Shaikan Block in Kurdistan

Gulf Keystone announced that drilling activities have now commenced in Kurdistan and just before midnight on April 27, the Company spudded its first exploration well, Shaikan-1, on the Shaikan Block. Drilling is anticipated to take 4 to 5 months to complete.

The Shaikan Block is situated near the city of Dihok, approximately 85 kilometers North-West of Erbil and covers an area of 283 square kilometers. The Shaikan-1 well is being drilled in a proven hydrocarbon area, in reasonable proximity to other successful discovery wells. The Shaikan Block lies directly between the Tawke and Taq Taq oil fields and in an area of active oil seeps.

Shaikan-1 is targeting multiple horizons ranging from 600 meters to approximately 3,000 meters in depth. In the event of a discovery well being drilled, the multiple horizons have aggregate anticipated in place reservoir volumes in the range of 2 billion barrels of oil as estimated by the Gulf Keystone technical team.

Upon completion of the Shaikan-1 well the commitments under the first phase of the PSC will have been completed with an option to enter into phase 2.

Mr. Todd Kozel, Executive Chairman of Gulf Keystone, commented, "The spudding of our first well in Kurdistan is perhaps one of the most significant milestones in the Company's history to date. Given the multiple target horizons and the 2 billion barrels anticipated in place reservoir volumes, this is clearly an exciting moment for Gulf Keystone."