Gulf Keystone 'Excited About Iraqi Prospects'

Gulf Keystone provided an update for its drilling campaign in the Kurdistan Region of Iraq ("Kurdistan").

Seismic survey progress 

On April 20, 2010, GKP's seismic contractor, Terraseis commenced acquisition of the 530 km2 3D seismic survey over the Shaikan structure. To date, fourteen per cent of the acquisition has been conducted, with completion expected by September 2010. 

The survey follows on from the 2D seismic program on Shaikan in 2008 and will be extended to cover the Sheik Adi block in the event of encouraging early results on the exploration well at Sheikh Adi. 

Shaikan-1 well work over (SH-1B), EWT and Temporary Facilities 

A work-over rig has been contracted from Arar Petrol Ve Gaz Arama Uretim Pazarlama and is scheduled to arrive at SH-1B at the beginning of June, to enable short term production testing of several previously tested Jurassic targets (DST zones 2 and 3) using an electric submersible pump. 

Immediately following on from this, an extended well test will be performed in the initial upper Jurassic discovery zone in Shaikan-1 (DST #1). As previously announced, current evaluated data indicates the zone to be capable of a flow-rate of approximately 8,000 to 10,000 bopd. Hydrocarbon flows will be received into a temporary production facility which is currently under construction. The first shipment of equipment for this facility is expected to leave from Canada in May 2010 with production expected to commence in August 2010. 

Shaikan-2 appraisal well (SH-2) 

SH-2 will be the first appraisal well drilled on the Shaikan structure, and will be used to evaluate the Cretaceous, Jurassic and all zones in the Triassic through to the Permian, in which total oil in place volumes of 1.9 (P90) to 7.4 (P10) billion barrels, with a mean value of 4.2 billion barrels, were discovered. 

The well location 9km to the east of SH-1 has been constructed and is awaiting the return of the WDI rig-842 from the Akri-Bijeel Block, expected towards the end of May 2010. 

Shaikan-4 appraisal well (SH-4) 

SH-4 will be the second appraisal well drilled in the Shaikan structure and will appraise all zones down to and including the upper Triassic, with an option to go to the Permian. 

The well location 6km to the west of SH-1 is being constructed and the well will be spudded in Q4 2010. 

Shaikan-3 appraisal well (SH-3) 

The appraisal well at SH-3, targeting the shallow Cretaceous zone, will be located near Shaikan-1. It will be drilled using the rig currently operating at SH-1B immediately following completion of the SH-1B work-over, and should spud in Q3 2010. 

Sheikh Adi-1 exploration well (SA-1) 

Construction has been completed on the well location of SA-1, the first exploration well in the Sheikh Adi block. The well will be drilled using the Atlantic Onshore Services rig, Discoverer-1, which is currently expected to arrive during July. 

SA-1 will explore all zones down to and including the upper Permian and is on schedule to spud in the third quarter of 2010. 

Bijeel-1 Exploration well 

The Bijeel-1 exploration well in the MOL operated Akri Bijeel block is very near final TD and is still conducting operations to test and evaluate recent drilling results. 

Todd Kozel, Executive Chairman and CEO of Gulf Keystone, commented, "The sums raised secure our development and appraisal program across Gulf Keystone's assets in Kurdistan for the coming months. The results of the early stages of GKP's 2010 work program have been very positive and we do not want to lose this momentum. We have already made two discoveries and still have two blocks and a number of appraisal wells to drill. While we still have a lot of work ahead of us, we are very excited about our prospects."