Gulf Keystone Petroleum Ltd (GKP) Operational & Corporate Update 30-Jan-2023 / 07:00 GMT/BST Dissemination of a Regulatory Announcement, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.

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30 January 2023

Gulf Keystone Petroleum Ltd. (LSE: GKP)

("Gulf Keystone", "GKP" or "the Company")

Operational & Corporate Update

Gulf Keystone, a leading independent operator and producer in the Kurdistan Region of Iraq ("KRI" or "Kurdistan"), today provides an operational and corporate update. The information contained in this announcement has not been audited and may be subject to further review.

Jon Harris, Gulf Keystone's Chief Executive Officer, said:

"2022 was a strong year for GKP, in which we made progress on multiple fronts that will position the company to maximise long-term value from the Shaikan Field. We laid the initial groundwork for a material increase in production levels in 2023 and 2024, while progressing towards key project sanction milestones of the Shaikan Field Development Plan. In addition, we paid record dividends to our shareholders of USD215 million, bringing total shareholder distributions to USD415 million since 2019, while at the same time strengthening our balance sheet through repayment of our USD100 million bond.

Looking ahead, we are positive about the outlook for oil prices, although we remain vigilant about the challenges facing the global economy and the recent delays to KRG payments. Consequently, as we move towards FDP approval and transition to increased investment in profitable production growth from the Jurassic reservoir to drive cash generation, we have put in place a flexible capital programme for 2023 that is responsive to the external environment. This will enable the Board to prudently manage the balance between our liquidity levels, growth investment and distributions to maximise total risk adjusted returns for shareholders. To underline the Board's continued commitment to reviewing the return of excess cash to shareholders as we progress, we are pleased to announce the declaration of an interim dividend of USD25 million."

Operational

-- 2022 was a Lost Time Incident ("LTI") free year with only one minor recordable incident. Following over440 days without an LTI, an incident occurred during drilling operations in January 2023. The safety of ourworkforce is our priority and we are currently carrying out an investigation

-- Gross average production in 2023 year to date of c.47,800 bopd(1), with the recent increase driven by thegradual ramp up of SH-16, which was brought online in December 2022

-- Ongoing drilling programme expected to drive production growth:? SH-17 drilled and completed in early 2023, under budget and ahead of schedule; currently being hookedup to commence production in Q1 2023, in line with guidance ? SH-18 (formerly SH-P) recently spudded, with first production expected in Q2 2023, as previouslyannounced

-- Gross average production for 2022 of 44,202 bopd in line with guidance, up from 43,440 bopd in 2021: ? Incremental production driven by:? The benefit of SH-13 and SH-14 production, brought on-stream in December 2021 ? Start-up of SH-15 in April 2022 and SH-16 in December 2022 ? Mostly offset by:? Prudent management of well production rates to avoid trace amounts of water production ahead ofinstallation of water handling capacity, including the shut-in of SH-12 for most of H1 2022 ? The temporary shut-in of one well during Q4 2022 due to an isolated ESP electrical failure ? In line with expectations and our development plan, continued base natural decline currentlyestimated at 6-10% per annum across the Shaikan Field, which remains low relative to the industry evenfollowing production of around 115 million barrels to date

Financial

-- 2022 net capex of c.USD115 million comprised of:? Drilling costs of c.USD65 million, including the SH-15 and SH-16 wells that were drilled and broughtonline during the year, and SH-17 which was completed in early 2023 ? Facilities and future well pad preparation costs of c.USD35 million, including early work related tothe expansion of PF-1 and PF-2 with water handling capacity and installation of flowlines connecting the newwell pads to the production facilities ? Well work over and intervention costs of c.USD15 million

-- 2022 gross Opex per barrel of c.USD3.2/bbl, in line with 2022 guidance of USD2.9-USD3.3/bbl, despite increasedactivity and industry cost inflation

-- During 2022, GKP received USD450 million from the Kurdistan Regional Government ("KRG") for crude oil salesand repayment of historic revenue arrears

-- GKP recently received net USD39 million from the KRG for August 2022 crude oil sales. Discussions areongoing with the KRG regarding payments for September to November 2022 crude oil sales, which are overdue

-- Continuing engagement with the Ministry of Natural Resources ("MNR") regarding proposed amendments to theShaikan Lifting Agreement, including a change in reference price for Shaikan crude oil sales from Dated Brent tothe local Kurdistan Blend benchmark ("KBT"), effective 1 September 2022

-- Record dividends paid in 2022 of USD215 million, representing a sector-leading dividend yield of 41%(2)

-- Cash balance of USD151 million(3) with no outstanding debt

Outlook

-- As we move towards approval of the Field Development Plan ("FDP"), we are focused on driving profitableproduction growth by expanding the production facilities and continuing our drilling campaign in the Jurassicreservoir, capitalising on the attractive returns resulting from the quick payback of investment under the PSC(4)following the recent recovery of the majority of our historic costs, while continuing to return excess cash toshareholders, underlined by our declaration of a USD25 million interim dividend, payable on 3 March 2023

-- In line with our rigorous focus on capital discipline and maintaining a robust balance sheet, we havebuilt flexibility into our work programme, predicating investment levels on the timeliness of KRG payments and oilprices:? Improvements in KRG payment timing and a continuation of the robust oil price environment wouldenable us to continue drilling beyond SH-18 and update our guidance ? A deterioration in market conditions, including continued delays to KRG payments, would lead us toreview potential reductions in our work programme and guidance

-- In 2023, we will bring SH-17 and SH-18 online to target double digit percentage production growth, whilelaying the foundation for an inflection in annual average production growth in 2024 by preparing well pads andflowlines to enable continuous drilling and advancing the expansion of our production facilities, including theinstallation of water handling capacity

-- We remain confident in the Shaikan Field's significant production growth potential. We are preparing aCompetent Person's Report ("CPR") as at 31 December 2022, which will provide an updated independent third-partyevaluation of Shaikan's reserves and resources. We expect to announce the results of the CPR in Q1 2023

2023 guidance

-- Gross average production in 2023 is expected to be 46,000 to 52,000 bopd, representing an 11% increasefrom 2022 at the mid-point:? Reflects anticipated contributions from SH-17 and SH-18, the benefits of well workovers, continuedprudent management of well production rates to avoid trace amounts of water production, and natural fielddeclines ? If we continue to drill beyond SH-18, we would expect to review production guidance

-- 2023 net capital expenditure guidance of USD160-USD175 million:? USD30-USD35 million: Completion of SH-17, drilling of SH-18 and well workover programme to optimiseproduction ? USD45-USD50 million: Long lead items and preparing well pads to enable continuous drilling beyond SH-18 ? USD85-USD90 million: Continued expansion of production facilities, targeting by H2 2024 an increase intotal field capacity from c.60,000 bopd currently to 85,000 bopd and installation of water handling capacity,potentially enabling the increase in production rates from constrained wells ? We continue to manage pressures in a supply constrained market

-- 2023 gross Opex guidance of USD3.0-USD3.4/bbl, underpinned by the Company's continued focus on strict costcontrol

-- Monitoring discussions between the Federal Iraqi Government and the KRG on the management of oil and gasassets in Kurdistan following the Iraqi Federal Supreme Court ruling in February 2022. GKP operations currentlyremain unaffected

Shaikan Field Development Plan

-- The FDP is expected to enhance the sustainability and longevity of the company's capacity for shareholderdistributions, while generating material economic value for Kurdistan and significantly reducing flaring throughthe Gas Management Plan, a requirement of the PSC

-- Capitalising on the Shaikan Field's significant growth potential and current estimated 2P reserves toproduction ratio of c.29 years, the FDP is expected to increase Jurassic gross production plateau up to 85,000 bopdand test the Triassic reservoir, targeting initial pilot production of up to 10,000 bopd

-- As we move towards FDP approval, we have agreed with the MNR to proceed with execution of the Jurassicreservoir expansion to increase profitable production and cash flow generation, with investment levels predicatedon timely payments from the KRG and a robust oil price environment

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