By John Lee.
Shares in Gulf Keystone closed up 5.5% on Thursday following the announcement that it has struck oil at the Sheikh Adi block in Iraqi Kurdistan.
The notification of the discovery follows the completion of a well testing programme of the Sheikh Adi-2 exploration well on the block, located immediately to the west of the Company's Shaikan Block, which is a major commercial discovery.
Sheikh Adi-2 spudded in May 2012, 1.45 km to the north of the Sheikh Adi-1 exploration well, and was drilled to a total depth of 2,754 metres in September 2012. In the course of the Sheikh Adi-2 well testing programme the Company has successfully tested four reservoir zones at measured depths of between 1,420 metres and 1,700 metres, achieving total stabilised aggregate flow rates of 4,235 barrels of oil per day across the Upper Butmah, Adaiyah, Mus and Sargelu formations in the Jurassic. Provisional results indicate the oil gravity is similar to that found in the same formations in the Shaikan Block namely 15-18 API.
In line with the Sheikh Adi PSC, following the notification of discovery, the Operator will submit a Discovery Report to the Sheikh Adi Block Management Committee within 30 days.
Gulf Keystone is the Operator of the Sheikh Adi Block with an 80 per cent working interest, while the Kurdistan Regional Government has a 20 per cent carried interest.
Todd F. Kozel (pictured), Gulf Keystone's Executive Chairman and Chief Executive Officer commented:
"We are very pleased with the outcome of the second exploration well on the Sheikh Adi Block, which is in on trend with Shaikan, our major commercial discovery declared earlier this year. This most recent exploration success points to the significant potential for further growth and future synergies across our world-class acreage in the Kurdistan Region of Iraq."
(Sources: GKP, Yahoo)