Gulf Keystone Update - Shaikan-4 Results 'Excellent'

Gulf Keystone has just issued 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.

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