Gulf Keystone to Raise $250m Debt

The increase of Shaikan production capacity to 66,000 bopd, which is the Company's next step towards reaching the medium-term target of 100,000 bopd set for Phase 1 of the approved Shaikan Field Development Plan, is expected to require construction of at least one additional production facility (PF-3) with gas injection and water handling capabilities, as well as the drilling of a substantial number of development and production wells.

The increase of Shaikan production capacity from 40,000 bopd to 66,000 bopd, alongside the continuation of the planned work programmes at Sheikh Adi, Ber Bahr and Akri-Bijeel, is anticipated to require further capital expenditure of approximately US$340 million through 2014 to the end of 2015.

Commenting on today's announcement, Todd Kozel (pictured), Chief Executive Officer of Gulf Keystone, said:

"We have reached a crucial milestone in Gulf Keystone's transition from an exploration company to an exploration and production company. This is the first time in the Company's history that it has been in a position to access the conventional bond markets, and we are confident that this proposed bond issue will further expand the Company's financial options in the future.

"The roadmap for the Shaikan development is the field development plan approved by the KRG and its Phase 1 target of 100,000 bopd production capacity. In order to achieve this significant medium-term target, by Q1 2016 we plan to grow our production capacity from 40,000 bopd to 66,000 bopd, drilling more wells and completing our next production facility. In the near term, our intention is to maintain and increase consistent production and sales, continue to prove up reserves, diversify our funding mix, and we are looking forward to issuing our Listing Prospectus and completing our planned move to the standard segment of the Official List shortly.

"The recently published Competent Person's Report confirming some 12.5 billion barrels of gross oil in place across our portfolio in the Kurdistan Region of Iraq, demonstrates the world-class significance of the Company's asset base, especially the Shaikan field, and indicates the scale of the reserves that we can prove up as we implement Phase 1 of the development. The report has also provided us with the necessary initial baseline of minimum tangible value in order to access the credit market, which will enable us to continue to develop the Shaikan field and begin to realize its value for all of our stakeholders."

(Source: GKP)