By John Lee.
Shares in Gulf Keystone Petroleum (GKP) closed up more than 16 percent up on Tuesday, after the company issued an update on its operations at Shaikan, its key producing asset in Iraqi Kurdistan.
The shares had been languishing at new lows earlier in the week, having lost more than three-quarters of their value over the past two years.
The Company announced the completion of the installation of the flowlines to connect the Shaikan-7, -8, and -10 wells to the existing production facilities ("PF-1" and "PF-2").
The Shaikan-7 and -8 wells are now tied to PF-1 and Shaikan-10 to PF-2. The flowlines are currently being hydro-tested and first oil is expected to flow to the production facilities in December.
With the addition of the three new producers, the current total production levels of between 23,000 and 25,000 gross bopd will increase to 40,000 gross bopd.
An amine plant is currently being tested at PF-2, to be followed by the similar plant at PF-1 in early 2015. The amine plants will sweeten the associated gas stream, allowing it to be used as fuel for the production facilities instead of diesel, representing savings of up to US$400,000 per month to the project.
A rig package is moving to a location in the vicinity of Shaikan-10 in order to drill Shaikan-11, an additional producer. An 11 km flowline to tie this well to PF-2 has already been laid.
Shaikan crude oil exports by truck to the Turkish coast continue uninterrupted.
John Gerstenlauer (pictured), Gulf Keystone's Chief Executive Officer commented:
"Despite numerous challenges earlier this year, Gulf Keystone has completed the work on the three additional producers on time. We are now testing the flowline connections, including an 11 km link between Shaikan-10 and PF-2, and look forward to boosting Shaikan production to our near-term target of 40,000 bopd.
"I would like to thank our entire team in the Kurdistan Region, which today includes over 300 employees and contractors, for their effort and diligent delivery in the area of construction, production and crude oil export sales."
(Source: Gulf Keystone Petroleum)