TIDMGKP
RNS Number : 1140Z
Gulf Keystone Petroleum Ltd.
12 March 2012
Not for release, publication or distribution in or into the
United States or jurisdictions other than the United Kingdom and
Bermuda where to do so would constitute a contravention of the
relevant laws of such jurisdiction.
12 March 2012
Gulf Keystone Petroleum Ltd. (AIM: GKP)
("Gulf Keystone" or "the Company")
Kurdistan Operational Update
Gulf Keystone today provides an update on its ongoing
exploration and appraisal programme in the Kurdistan Region of
Iraq, which includes the Shaikan block, a major discovery with
independently audited gross oil-in-place volumes of between 8
billion barrels to 13.4 billion barrels calculated on the P90 to
P10 basis, with a mean value of 10.5 billion barrels.
Shaikan-4 Appraisal Well
The well testing programme for the Shaikan-4 appraisal well,
drilled 6 km to the west of the Shaikan-1 discovery well, remains
ongoing, with six out of seven planned tests completed to date.
Portions of major intervals, such as the Kurre Chine, Butmah, Mus,
Alan and Sargelu formations will continue to be tested and so far
aggregate flow rates in excess of 14,000 barrels of oil equivalent
per day ("boepd") have been achieved. Portions of the well that
appear to be high quality oil reservoir on the electric logs, and
where proven commercial flow rates were achieved by testing
previous wells, will not be tested.
The first five tests have been conducted in the northern
"footwall" - on the lower side of the inclined fault bounding the
Shaikan structure. This is the first occurrence of flow from the
footwall and proves an extension of the Triassic and Jurassic
reservoirs outside the central part of the structure. The latest
test (Test 6) is being conducted in the "hanging wall" (the upper
side of the inclined fault) from a new reservoir in the uppermost
Sargelu formation which had not been previously flow tested. The
test is ongoing and rates in excess of 4,000 boepd have been
recorded.
Shaikan-5 Appraisal Well
After drilling the Shaikan-5 appraisal well, 6 km to the
north-east of the Shaikan-2 appraisal well, to the depth of 1,876
metres in the Jurassic, it became necessary to drill a sidetrack
due to a portion of the drill string becoming stuck in the hole.
The sidetrack operations were successfully performed at the depth
of 1,370 metres, after which the Shaikan-5 drilling operations have
resumed below 1,730 metres, to continue drilling to the estimated
total depth ("TD") of 3,500 metres, subject to technical
conditions.
Shaikan-6 Appraisal Well
The Shaikan-6 appraisal well, 9 km to the east of the Shaikan-2
appraisal well, is currently drilling a 12.25" hole at the depth of
2,058 metres in the Jurassic. The well will drill to the estimated
TD of 3,800 metres subject to technical conditions.
Shaikan-7 Exploration Well
The tendering process has commenced for a rig to drill the
Shaikan-7 exploration well, which will target the lower Triassic
and the Permian, the deepest prospective undrilled horizons of the
Shaikan structure.
Shaikan Extended Well Test
As part of the ongoing Extended Well Test ("EWT") on the Shaikan
block, the output from the Shaikan-1 & 3 EWT facility reached
137,060 gross barrels of oil between 1 January and 6 March 2012.
Due to unprecedented cold weather and poor visibility, combined
with work required to connect an additional 20,000 barrel storage
tank, the average test production between 1 January and 25 February
was 2,077 gross barrels of oil per day ("bopd"). Since 25 February
test production has averaged 5,641 gross bopd.
Shaikan Field Export Pipeline Project
On 6 March 2012, Gulf Keystone initiated a tendering process for
the export pipeline site construction and installation for the
Shaikan field export pipeline project.
As part of the ongoing tendering process for the materials
procurement for the Shaikan field export pipeline project, which
was announced on 12 January 2012, bids are currently being received
with the technical and commercial evaluation to follow.
Gulf Keystone is the Operator of the Shaikan block with a
working interest of 75 per cent and is partnered with Kalegran Ltd.
(a 100 per cent subsidiary of MOL Hungarian Oil and Gas Plc.) and
Texas Keystone Inc., which have working interests of 20 per cent
and 5 per cent respectively.
Akri-Bijeel Block: Aqra/ Bekhme Anticline Resources
Following the completion of the Bekhme-1 exploration well
testing programme in December 2011, after the well reached TD at
5,000 metres in the Triassic, Gulf Keystone has received results of
an independent evaluation of estimated petroleum resources for the
Aqra/Bekhme anticline on the Akri-Bijeel block by Dynamic Global
Advisors (DGA), independent Houston-based exploration
consultants.
The DGA report, based on the Bekhme-1 wireline logging data and
2D seismic data, while recognizing the fact that no hydrocarbons
had been produced to surface, has indicated a significant range of
between 2.5 billion barrels and 5.4 billion barrels of gross
oil-in-place volumes calculated on the P90 to P10 basis, with the
mean resource estimate for the reservoirs in the Aqra/ Bekhme
anticline of 3.9 billion barrels. While this range of resource
estimate is significant, a considerable portion of the oil resource
is likely to comprise heavy oil. Further evaluation would be
required as to whether the oil is commercially recoverable.
DGA's previous assessments of assets on behalf of Gulf Keystone
included independent evaluation of the Shaikan discovery, including
two major upgrades of the gross oil-in-place volumes announced in
April and November 2011, as well as a preliminary evaluation of the
Sheikh Adi resources (1 billion barrels to 3 billion barrels
calculated on the P90 to P10 basis) announced in August 2011.
Akri-Bijeel Block: Aqra-1 Appraisal Well
The first appraisal well to assess the Bijell discovery on the
Akri-Bijeel block, is being drilled 8 km to the north-west of the
Bijell--1 discovery well and 26 km to the west-northwest of the
Bekhme-1 exploration well. After reaching the depth of 989 metres,
the Aqra-1 drilling operations have been temporarily halted in
order to repair the rig following a lightning strike. Once the
drilling operations have resumed, Aqra-1 will drill to an estimated
TD of over 4,700 metres in the Triassic subject to technical
conditions.
Gulf Keystone has a 20 per cent working interest in the
Akri-Bijeel block, operated by Kalegran Ltd., a 100 per cent
subsidiary of MOL Hungarian Oil and Gas Plc., which holds 80 per
cent working interest in the block. The Operator's P50 resource
estimate for the Bijell discovery is 2.4 billion barrels of
oil-in-place, while the ongoing 2012/13 exploration and appraisal
programme is targeting existing and identified hydrocarbon
prospects in the Akri-Bijeel block.
Ber Bahr-1 Exploration Well
After the setting of 7" casing at the depth of 3,343 metres in
the Triassic, the first exploration well on the Ber Bahr block is
drilling at the depth of 3,347 metres.
Gulf Keystone has a 40 per cent working interest in the Ber Bahr
block, operated by Genel Energy, which holds a 40 per cent working
interest in the block. The Kurdistan Regional Government has a 20
per cent carried interest in the Ber Bahr Production Sharing
Contract. The Operator's resource estimate for the Ber Bahr block
is 1.5 billion barrels of oil equivalent-initially-in-place.
John Gerstenlauer, Gulf Keystone's Chief Operating Officer
commented:
"We believe that these new results of the ongoing Shaikan-4 well
testing programme are excellent, confirming our early understanding
that this well may prove to be our best one to date in the
Kurdistan Region of Iraq. We anticipate that future test production
from Shaikan-4 will significantly increase our existing production
level, which reached 6,970 gross barrels of oil per day on 4 March
2012. In parallel to the continuing increase in the test production
of the Shaikan crude, our work on the Shaikan export pipeline
project is progressing. In addition to a number of important
operational developments on the Shaikan block, we are pleased to
report on the progress in the Ber Bahr-1 exploration well drilling
activities and to present results of an independent report by
Dynamic Global Advisors on estimated resources for the Aqra/ Bekhme
anticline on the Akri-Bijeel block. The substantial remaining
potential of the Akri-Bijeel block is currently being targeted by
the Operator's 2012/13 wide-ranging exploration, appraisal and
early development programme."
Enquiries:
Gulf Keystone Petroleum: +44 (0) 20 7514 1400
Todd Kozel, Executive Chairman
and
Chief Executive Officer
Ewen Ainsworth, Finance Director
Strand Hanson Limited +44 (0)20 7409 3494
Simon Raggett / Rory Murphy /
James Harris
Mirabaud Securities LLP +44 (0)20 7878 3362
Peter Krens
Pelham Bell Pottinger +44 (0) 20 7861 3232
Mark Antelme
or visit: www.gulfkeystone.com
John Gerstenlauer, the Company's Chief Operating Officer, who
has 33 years of relevant experience within the sector and meets the
criteria of a qualified person under the AIM note for mining, oil
and gas companies, has reviewed and approved the technical
information contained in this announcement. Mr. Gerstenlauer is a
member of the Society of Petroleum Engineers.
Notes to Editors:
-- Gulf Keystone Petroleum Ltd. (AIM: GKP) is an independent oil
and gas exploration and production company focused on exploration
in the Kurdistan Region of Iraq.
-- Gulf Keystone Petroleum International (GKPI) holds Production
Sharing Contracts for fourexploration blocks in Kurdistan,
including the Shaikan block.
-- Shaikan is a major discovery with independently audited gross
oil-in-place volumes of between 8 billion barrels to 13.4 billion
barrels.
-- The Company's shares have traded on the AIM market of the
London Stock Exchange since listing on 8(th) September 2004.
-- Gulf Keystone Petroleum Limited is registered in Hamilton,
Bermuda with further offices in Erbil, Kurdistan (Iraq), Algiers,
Algeria and London, UK.
-- Gross oil-in-place (or petroleum-initially-in-place) is that
quantity of petroleum that is estimated, as of a given date, to be
contained in known accumulations prior to production. The range of
uncertainty of the oil-in-place (petroleum-initially-in-place)
volumes is represented by a probability distribution with a low,
mid and high provided: P90 represents at least a 90% probability
(high) that the quantities determined to be in place will equal or
exceed the low estimate; P50 represents at least a 50% probability
(mid) that the quantities determined to be in place will equal or
exceed the mid estimate; and P10 represents at least a 10%
probability (low) that the quantities determined to be in place
will equal or exceed the high estimate.
Not for release, publication or distribution, directly or
indirectly, in or into the United States or jurisdictions other
than the United Kingdom and Bermuda where to do so would constitute
a contravention of the relevant laws of such jurisdiction. This
document (and the information contained herein) does not contain or
constitute an offer of securities for sale, or solicitation of an
offer to purchase securities, in the United States or jurisdictions
other than the United Kingdom and Bermuda where to do so would
constitute a contravention of the relevant laws of such
jurisdiction. The securities referred to herein have not been and
will not be registered under the US Securities Act of 1933, as
amended (the "Securities Act"), and may not be offered or sold in
the United States unless the securities are registered under the
Securities Act, or an exemption from the registration requirements
of the Securities Act is available. No public offering of the
securities will be made in the United States.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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