[Update: Gulf Keystone closed the day up 31% at 161.75p]
Shares in Gulf Keystone jumped 20% on Friday morning following the company's reporting of significant initial oil flow on the Shaikan-2 Appraisal Well in a 44 meter interval (1,792m to 1,836m) in the Jurassic age formation.
Substantial smoke and/ or the oil flare is/ are visible from the Company's office in Erbil some considerable distance from the Shaikan-2 location, indicating that a significant flow has been encountered and prompting the Company to issue this announcement.
The Company is currently conducting a test, which is expected to continue for another 72 hours to obtain further results, i.e. flow rate, oil quality and similar information, which will be reported in the next announcement.
Shaikan-2 is the first deep appraisal well to be drilled on the Shaikan structure. The well is drilling approximately nine kilometres to the south-east of the Shaikan-1 discovery well.
The Company has a 75 percent working interest in the Shaikan block and is partnered with the MOL subsidiary, Kalegran Ltd., and Texas Keystone Inc. which have the remaining 20 and 5 percent working interests respectively.
Todd F. Kozel (pictured), Gulf Keystone's Executive Chairman and Chief Executive Officer commented:
"This initial oil flow continues to confirm our belief in the world class nature of the Shaikan discovery. We are eagerly anticipating more detailed results from the Shaikan-2 well test."