Gulf Keystone has announced that it has successfully raised $200 million to fund its exploration programme in Iraqi Kurdistan.
In line with the Company's forward strategy announced on 14 September 2011 and in order to increase the focus on the aggressive programme of exploration and appraisal of the Shaikan, Sheikh Adi and Ber Bahr blocks in the Kurdistan Region of Iraq, the net proceeds of the Placing will primarily be applied towards:
- Progressing the work on the Shaikan Field Development Plan by the dedicated development team
- Completing the Front End Engineering and Design for the Company's pipeline capable of transporting a minimum of 440,000 barrels of oil per day ("bopd") from the Shaikan field to the existing Kirkuk-Ceyhan export pipeline
- Ordering of long lead items for the construction of the Company's dedicated pipeline, subject to necessary approvals
- Upgrading the Shaikan Extended Well Test ("EWT") facilities to increase existing production from Shaikan-1 & 3 to 20,000 bopd
- Building additional testing and production facilities for Shaikan-2 & 4 capable of producing 20,000 bopd, following successful well tests at Shaikan-2 and in anticipation of positive results from Shaikan-4
- Drilling of the second exploration well on the Sheikh Adi block
- Acquisition of 3D seismic data over the Ber Bahr block where the first exploration well is due to spud in October 2011
This additional funding, alongside the announced intention to sell the 20% interest in the Akri-Bijeel block, will further strengthen Gulf Keystone's financial position and allow the Company to concentrate fully on the task of proving up the resource base across the Shaikan, Sheikh Adi and Ber Bahr blocks.
Todd Kozel, Executive Chairman and CEO, commented:
"Gulf Keystone's forward strategy is about successfully proving the full potential of our assets in the Kurdistan Region of Iraq and becoming one of the top E&P players in the FTSE 250 index. The Board views this most recent oversubscribed fund-raising as an important vote of confidence from existing shareholders and new institutional investors in the Company's ability to explore and appraise at least 12 billion barrels of gross oil-in-place across our three licences, to increase production from the world-class Shaikan discovery to 20,000 bopd in 2012 and potentially up to 40,000 bopd thereafter, and to bring Shaikan crude to the international markets via our own pipeline. We are proceeding with our aggressive drilling schedule for the Shaikan, Sheikh Adi and Ber Bahr blocks and look forward to completing the ongoing work on the Shaikan production facilities, the Shaikan Field Development Plan and the pipeline project. This work will continue adding significant value to our working interest position in the Kurdistan Region of Iraq".