Gulf Keystone releases Iraqi block updates

Gulf_Keystone_IraqGulf Keystone has provided an update on its exploration and appraisal programme in Iraq.Gulf Keystone has provided an update on its ongoing exploration and appraisal programme in the Kurdistan region of Iraq

This includes the Shaikan block, a major discovery with independently audited gross oil-in-place volumes of between eight billion barrels to 13.4bn barrels calculated on the P90 to P10 basis with a mean value of 10.5bn barrels.

Shaikan-4 Appraisal Well: The well testing program for the Shaikan-4 appraisal well, drilled six kilometres to the west of the Shaikan-1 discovery well, is ongoing with two well tests in the Triassic having been completed to date. Five further tests are planned in the Jurassic and Triassic.

In the course of the first well test conducted in the Kurre Chine C formation, Shaikan-4 achieved a flow rate of 563 bpd and 3.65 mmscf/d of gas at a 328 psi flowing wellhead pressure. In the course of the second well test, Shaikan-4 tested a thin zone at the bottom of the Kurre Chine B formation achieving a flow rate of 4,970 bpd and 7.0 mmscf/d of gas at a 1,101 psi flowing wellhead pressure with initial results indicating a 39 degree API fluid.

Shaikan-5 Appraisal Well: The Shaikan-5 appraisal well, six kilometres to the north-east of the Shaikan-2 appraisal well, is currently drilling at a measured depth of 1,571 m in the lower Cretaceous to the estimated total depth (TD) of 3,500 m subject to technical conditions.

Shaikan-6 Appraisal Well: The Shaikan-6 appraisal well, nine kilometres to the east of the Shaikan-2 appraisal well, has drilled to a measured depth of 844 m in the Cretaceous and 20" casing has been set. The well will drill to the estimated TD of 3,800 m subject to technical conditions.

Aqra-1 Appraisal Well Spudding: On January 17, 2012, the operator of the Akri-Bijeel block spudded Aqra-1, the first appraisal well, to assess the Bijell discovery with the operator's current P50 estimate of 2.4bn barrels of oil in place. The well is being drilled eight kilometres to the north-west of the Bijell-1 discovery well and 26 km to the west-northwest of the Bekhme-1 exploration well to an estimated TD of over 4,700 m in the Triassic subject to technical conditions.

According to the operator's Akri-Bijeel block operational update and 2012 outlook dated 28 December 2011, the Aqra-1 appraisal well, which is expected to be tested in H2 2012, will be followed in 2012 by two exploration wells (Bakrman-1 and Gulak-1) and three additional appraisal wells (Bijell-2, Qalati-1 and Qandagul-1), as well as by two further appraisal wells in 2013. In addition, an extended well test is planned for the Bijell-1 discovery well in 2012, similar to the ongoing successful Shaikan-1 & 3 extended well test.

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 an 80 per cent working interest in the block. The operator's P50 resource estimate for the Akri-Bijeel block is 2.4bn barrels of oil-in-place.

Ber Bahr-1 Exploration Well: The first exploration well on the Ber Bahr block is drilling at a measured depth of 2,778 m in the Triassic to the estimated TD of 3,000 m subject to technical conditions. 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 1.5bn barrels of oil equivalent-initially-in-place.

"Initial results of the Shaikan-4 well testing program are very encouraging with logging results indicating that Shaikan-4 may be the best well which Gulf Keystone has logged to date in the Kurdistan Region of Iraq,” said John Gerstenlauer, Gulf Keystone's Chief Operating Officer. “We look forward to adding to our already outstanding drilling success in the region by completing further Shaikan-4 well tests, which will be followed by more results from the Shaikan-5 and Shaikan-6 appraisal wells before the appraisal program of the Shaikan world-class discovery is completed. Initial results from the Ber Bahr-1 exploration well and progress in the 2012 wide-ranging exploration, appraisal and early development program of the Akri-Bijeel block are also highly anticipated."

Alain Charles Publishing, University House, 11-13 Lower Grosvenor Place, London, SW1W 0EX, UK
T: +44 20 7834 7676, F: +44 20 7973 0076, W: www.alaincharles.com

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