Gulf Keystone Drills Ahead at Shaikan-1

Gulf Keystone has provided a drilling update on the 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.

Drilling has now reached a depth of 1,710 meters and has encountered an oil column in excess of 170 meters within the Sargelu, Alan and Mus formations. At this stage, the Company believes this to be a single reservoir and hence an extension of the same discovery announced on August 6, 2009.

As previously announced, the Alan and Mus formations were identified as the primary oil bearing zones of interest for Shaikan-1, with total potential volumes of oil-in-place in excess of 1.5 billion barrels. The open hole log data, together with an extracted core from the new interval, confirm the presence of a extensive fracture system, which appears to be oil saturated throughout. Furthermore, no water has been encountered. This new data provides Gulf Keystone with grounds for a revised range of oil-in-place volumes of between 1.5 and 3.0 billion barrels for the oil encountered, thus far.

In the field, the Company will continue to drill ahead to the next casing point at approximately 2,500 meters, before subsequently reaching final target depth at 3,200 to 3,500 metres, subject to well results.

Todd Kozel, Executive Chairman of Gulf Keystone, commented, "We are greatly encouraged by the discovery of a second interval in what we believe to be a single and significant reservoir within the Sargelu, Alan and Mus formations. Even at this early stage, the commerciality of this discovery is substantially strengthened by our upward revision of the oil-in-place estimate. The Shaikan-1 is proving to be a value-transforming discovery for Gulf Keystone."