Gulf Keystone Hits Oil in Kurdistan

PUBLISHED: Nov 08 2012 @ 03:35 | Comments (0) | More info about Kenneth G. Mondero

Independent oil and gas explorer Gulf Keystone Petroleum Limited (LSE:GKP) said today, another well drilled from the Sheikh Adi block in the Kurdistan region in Iraq further strengthened its initial assessment of the hydrocarbon deposit previously estimated in the said acreage.

In a statement, Gulf Keystone said the Sheikh Adi-2 well, the second well drilled from the Sheikh Adi block, encountered oil at four reservoir zones and flowed at an aggregate average rate of 4,235 barrels of good quality oil per day.

The 180 square kilometre Sheikh Adi block was independently assessed to contain at least one billion barrels of gross oil-in-place with a potential upside of three billion, based from well log results following the success of the first exploration well drilled in 2010.

Significant Potential

According to the company, provisional results of the oil discovered is similar to the quality found in the Shaikan block, located to the east of the Sheik Adi, which holds about 12.4 billion barrels of oil and a potential upside to 15 billion barrels.

“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,” said Gulf Keystone’s Executive Chairman and Chief Executive Officer, Todd Kozel.

The Shaikan block is now in its field development planning stage and is being targeted to produce about 40,000 bopd by 2013 and 150,000 by 2015.

“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,” he added.

Gulf Keystone holds four production sharing contracts in Kurdistan through its subsidiary, Gulf Keystone Petroleum International Limited. It has 80% interest in Sheikh Adi, with the remaining 20% held as a carried interest by the Kurdistan Regional Government, which is at a standoff with the central government in Baghdad over the right to approve licences in the autonomous region.

Back in the City however, shares of the AIM-listed firm only moved 4.4% to 189.75 pence an hour after London opened trading with over 1.7 million shares swapped.

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