Gulf Keystone All Smiles over Shaikan Appraisal Program

- Gulf Keystone All Smiles over Shaikan Appraisal Program

Monday, September 05, 2011
Gulf Keystone Petroleum Ltd.

Gulf Keystone provided an update on its ongoing exploration and appraisal program for the Shaikan block in the Kurdistan Region of Iraq. Shaikan is a major discovery with independently audited gross oil-in-place volumes of between 4.9 billion barrels to 10.8 billion barrels calculated on the P90 to P10 basis with a mean value of 7.5 billion barrels.

Shaikan-2 Well Test Update

Further to the announcement on the new Triassic discovery with the Shaikan-2 Appraisal Well, the Company has completed a flow test in the lower section of the Kurre Chine B zone in the Upper Triassic zone of the Shaikan-2 Appraisal Well drilled approximately nine km to the south-east of the Shaikan-1 discovery well.

The Kurre Chine B flow test in Shaikan-2 achieved flow rates of 2,600 barrels of 40 degree API oil per day with associated gas of 5.4 MMcf per day through a 48/64"choke.

So far, the Company has conducted three wells tests on Shaikan-2 with the maximum aggregate flow rate in excess of 15,000 barrels of oil per day ("bopd") with up to five additional tests still to be performed as part of the ongoing Shaikan-2 testing program in the Triassic and Jurassic. The next test will be conducted on the upper section of the Kurre Chine B.

Shaikan-4 Drilling Update

The Shaikan-4 Appraisal Well, drilled six km to the west of the Shaikan-1 discovery well, is currently drilling ahead at a measured depth (MD) of 2,580 meters. Preliminary well logs through the upper Jurassic (down to the top of the Butmah formation) indicate that the net pay count on this well for the upper Jurassic reservoirs is significantly better than those achieved with either Shaikan-1 or Shaikan-2.

John Gerstenlauer, Gulf Keystone's Chief Operating Officer commented, "This latest in a series of successful Shaikan-2 well tests follows the announcement of the new Triassic discovery made with this well earlier this month. Together with the progress in the Shaikan-4 drilling operations and the oncoming spudding of Shaikan-5, it is a confirmation of Gulf Keystone's success in both drilling and proving the value of the giant Shaikan field, which is our immediate focus".

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Gulf Keystone Unlocks Discovery at Shaikan-2 Appraisal

- Gulf Keystone Unlocks Discovery at Shaikan-2 Appraisal

Thursday, August 18, 2011
Gulf Keystone Petroleum Ltd.

Gulf Keystone has made a new Triassic discovery with the Shaikan-2 Appraisal Well, drilled approximately nine km to the south-east of the Shaikan-1 discovery well in the Kurdistan Region of Iraq.

Gulf Keystone has completed drilling of the Shaikan-2 Appraisal Well to a TD (total depth) of 3,300 meters in the middle Triassic, following which a flow test has been performed in the newly discovered Kurre Chine C zone over a 80 meter interval (3,195m to 3,275m). This new zone is highly pressured and correlates with the high pressure zone penetrated at the bottom of Shaikan-1.

The Kurre Chine C flow test in Shaikan-2 has achieved variable flow rates up to a maximum recorded rate of 4,450 barrels of 36 degree API oil per day with associated gas of 813,000 scf per day through a 36/64" choke.

After success with this first test, the Company plans to continue with its program of Shaikan-2 testing in the Triassic and Jurassic.

The Company has a 75 percent working interest in the Shaikan block and is partnered with the MOL subsidiary, Kalegran Ltd., and Texas Keystone Inc. which have the remaining 20 and 5 percent working interests respectively.

John Gerstenlauer, Gulf Keystone's Chief Operating Officer commented, "The new Triassic discovery is yet another chapter in our Shaikan success story. As a result of these successful Shaikan-2 well test results, oil volumes that will eventually be attributed to this zone, will be in addition to the already impressive 4.86 to 10.8 billion barrels of gross oil-in-place already discovered in the Shaikan field."

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Gulf Keystone Bumps Up Resources at Sheikh Adi

- Gulf Keystone Bumps Up Resources at Sheikh Adi

Wednesday, August 10, 2011
Gulf Keystone Petroleum Ltd.

Gulf Keystone announced results of an independent preliminary evaluation of the Sheikh Adi resources by Dynamic Global Advisors (DGA), independent Houston-based exploration consultants.

The DGA report, based on Sheikh Adi-1 wireline logging data, core samples, 2D and 3D seismic and regional data, has indicated a significant range of between 1 billion barrels and 3 billion barrels of gross oil-in-place volumes calculated on the P90 to P10 basis, with a P50 estimate of 1.9 billion barrels.

Gulf Keystone has completed drilling of Sheikh Adi-1, the first exploration well to be drilled on the Sheikh Adi structure, to a TD (total depth) of 3,780 meters in the Triassic zone. A series of flow tests will now be performed on a number of Jurassic zones in the Sheikh Adi-1 well. Testing in the Triassic zone will not be possible due to issues relating to casing integrity at these depths.

The Sheikh Adi block is located immediately to the west of the Company's Shaikan block, where a major discovery was made in 2009. Gulf Keystone is the Operator of the Sheikh Adi block with an 80 percent working interest and is carrying the Kurdistan Regional Government's 20 percent working interest in the block.

DGA's previous assessments of assets on behalf of Gulf Keystone included independent evaluation of the Shaikan discovery, including a major revision of the gross oil-in-place volumes (4.9 billion barrels to 10.8 billion barrels calculated on the P90 to P10 basis) announced in April 2011.

John Gerstenlauer, Gulf Keystone's Chief Operating Officer commented, "This independent report demonstrates the potential of the Sheikh Adi block with between 1 and 3 billion barrels of gross oil-in-place. This report reinforces our belief in having encountered yet another potential world class oil source. We plan to further evaluate the Sheikh Adi structure and define and assess this complicated geological structure. The Sheikh Adi oil-in-place numbers are all the more significant due to our 80 percent interest in the block. These numbers are in addition to 7.5 billion barrels of P50 oil-in-place at Shaikan, 2.4 billion barrels of P50 oil-in-place at Akri-Bijeel and 1.9 billion barrels of estimated petroleum-initially-in-place at Ber Bahr. This report further demonstrates the world class nature of Gulf Keystone's assets in the Kurdistan Region of Iraq".

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Gulf Keystone Focused on Adding Volumes to Iraqi Blocks

- Gulf Keystone Focused on Adding Volumes to Iraqi Blocks

Thursday, June 16, 2011
Gulf Keystone Petroleum Ltd.

Gulf Keystone provided an update on its operations in the Kurdistan Region of Iraq highlighting that:

• Shaikan-2 deep appraisal well is currently at a depth of 3,166 meters with the final total depth (TD) still planned for the lower Triassic or the upper Permian
• Sheikh Adi-1 exploration well is currently at a depth of 3,515 meters in the Triassic Kurre Chine B and a cased hole testing program will be undertaken once the drilling has reached TD
• After spudding on May 27, 2011, the Shaikan-4 deep appraisal well is currently at a depth of 462 meters
• Preliminary results of the Shaikan 3D seismic data interpretation suggest a larger structure (by 5-10%) than originally mapped based on the earlier 2D seismic data
• Bekhme-1 exploration well on the Akri-Bijeel block is drilling ahead at a depth of 2,828 meters.

John Gerstenlauer, Gulf Keystone's Chief Operating Officer commented, "With three Gulf Keystone wells underway on the Shaikan and Sheikh Adi blocks, the second exploration well being drilled in partnership with MOL on the Akri-Bijeel block, and the first exploration well expected to be drilled on the Ber Bahr block in partnership with Genel later in 2011, we are firmly focused on adding further oil-in-place volumes in all four blocks in the Kurdistan Region of Iraq."

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Gulf Keystone Updates Ops at Shaikan Wells

- Gulf Keystone Updates Ops at Shaikan Wells

Tuesday, June 14, 2011
Gulf Keystone Petroleum Ltd.

Gulf Keystone is currently in the commissioning phase of oil export operations from its Extended Well Test (EWT) facility close to Shaikan-1 and Shaikan-3.

The commissioning phase, involving final preparations and customary checks and tests on all elements of the process, including loading and transportation logistics, as well as metering and receiving facilities, is underway in order to enable the Company to steadily ramp up export volumes to 5,000 barrels of oil per day (bopd) with an eight month target of over 10,000 bopd. To date just over 3,700 barrels of oil have been delivered to the storage tank facilities at the export pipeline injection point.

Prior to commencing the commissioning phase the storage tank at the EWT facility was emptied of approximately 21,000 barrels of oil, which have been sold into the domestic market in order to allow preparations for oil export to commence.

All volumes of oil are in addition to those previously reported in the Annual Results on April 11, 2011.

The Company will provide a further update on oil export operations once the commissioning phase is complete and stabilized export volumes have been injected into the Kirkuk-Ceyhan pipeline.

John Gerstenlauer, Gulf Keystone's Chief Operating Officer commented, "Gulf Keystone is making good progress toward commencing oil exports from our Shaikan facilities at the initial intended rate of 5,000 bopd following the current commissioning phase. We look forward to delivering stabilized export volumes of Shaikan crude for shipment via the Kirkuk-Ceyhan pipeline."

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Gulf Keystone Spuds Shaikan Appraisal Well

- Gulf Keystone Spuds Shaikan Appraisal Well

Friday, May 27, 2011
Gulf Keystone Petroleum Ltd.

Gulf Keystone announced that the Shaikan-4 Deep Appraisal Well has spudded on the Shaikan block in the Kurdistan Region of Iraq on Friday May 27, 2011.

Shaikan-4 is the second deep appraisal well to be drilled on the Company's significant oil discovery with gross oil-in-place volumes of between 4.9 billion barrels to 10.8 billion barrels calculated on the P90 to P10 basis with a mean value of 7.5 billion barrels.

Shaikan-4 is being drilled 6 kilometers to the north-west of the Shaikan-1 discovery well and is targeted to drill to the top of the Permian to reach the planned total depth (TD) of approximately 3,760 meters.

Gulf Keystone is the Operator of the Shaikan block with a working interest of 75 percent and is partnered with Kalegran Ltd. (a 100 percent subsidiary of MOL Hungarian Oil and Gas Plc.) and Texas Keystone Inc, which have working interests of 20 percent and 5 percent respectively.

John Gerstenlauer, Gulf Keystone's Chief Operating Officer commented, "The spudding of our second deep appraisal well on the Shaikan structure is yet another important achievement in the Company's ambitious 2011-2012 exploration and appraisal programme in the Kurdistan Region of Iraq. With the Shaikan-2 & 4 appraisal wells currently underway and the Shaikan-5 appraisal well planned to spud later in 2011, the Company is firmly focused on further proving the world class quality of the Shaikan discovery."

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Gulf Keystone Charges Ahead in Kurdistan Exploration

- Gulf Keystone Charges Ahead in Kurdistan Exploration

Monday, May 23, 2011
Gulf Keystone Petroleum Ltd.

Gulf Keystone provided an update on its activities in the Kurdistan Region of Iraq.

Shaikan-2

Further to the Company's announcement on March 22, 2011, the Shaikan-2 deep appraisal well has now drilled to a depth of 2,655 meters. The well is now in the top most section of the Triassic age formations and the Company is running casing.

Further to the announced testing of the Sargelu/Alan section, which achieved the stabilized flow rate of 8,064 bopd, logs and cores have now been obtained in the Mus and Butmah Jurassic sections.

Four cores totaling almost 30 meters have been recovered from the Mus formation, 23 meters of which had excellent oil shows. An open hole test resulted in a significant flow, although a reliable oil measurement could not be obtained due to technical limitations of the down hole tools. A similar zone on Shaikan-1 achieved 2,250 bopd.

Five cores totaling almost 47 meters have also been recovered from the Butmah formation, 26 meters of which had excellent oil shows. A similar zone on Shaikan-1 achieved 4,650 bopd on test.

This combination of core, log and flow test data indicates extensive oil columns and an impressive similarity between the Jurassic section in Shaikan-2 and the same formations in Shaikan-1 (which achieved a cumulative test rate of over 20,000 bopd from various geological horizons).

The forward plan is to drill through the Triassic section and possibly into the Permian.

After drilling of the well is complete cased hole flow tests in the Jurassic may be undertaken, a practice which worked well on Shaikan-1 during the summer of 2010. This would allow an optimized testing program to be designed which will benefit from all of the information gathered during drilling of the well and equipment to be sourced which will overcome the current technical limitations of the open hole test tools. A similar approach may also be undertaken in the deeper zones but does not preclude earlier open hole testing.

Sheikh Adi-1

The Sheikh Adi-1 exploration well has reached the Triassic and has cut a core in the Kurre Chine A at a depth of 3,293 meters. The core of the Kurre Chine A contains good oil shows and a flow test is to be undertaken shortly.

Prior to reaching the Triassic, logs and cores were obtained in the Jurassic sections, which show hydrocarbon saturations and where 45 meters of net pay have been calculated. Gulf Keystone obtained the following from the Jurassic net pay zones of interest:

• A core totaling almost 13 meters was recovered from the Barsarin/ Sargelu Jurassic section which had moderate oil shows. A test of this zone of interest recovered oil but no reliable flow rate measurement could be obtained due to limited permeability.
• A core of just over 12 meters was also obtained in the Butmah containing good oil shows.

In addition, log data indicates movable oil in the Sargelu/ Alan (obtained in sections deeper than the test zone), Mus and Butmah, all of which would be the target of a future potential test program.

This recent Sheikh Adi-1 well data, along with early results of the 3D seismic interpretation, indicates that the natural fracture system that makes the wells in the Jurassic intervals at Shaikan such prolific oil producers, is significantly less extensive on the footwall of the Sheikh Adi structure. The main significance of this is that the wells in this part of the structure, which are likely to flow oil at low rates, may benefit from acid treatment and artificial fracturing in order to improve well productivity. The Company has already demonstrated with Shaikan-1 and Shaikan-3 that small scale acid treatments can lead to significantly improved production rates.

Similar to Shaikan-2 an extensive cased hole testing program is currently being considered for the Jurassic section of Sheikh Adi-1 after drilling of the well is complete, which may include limited artificial fracturing, depending on equipment availability. This would allow an optimized testing program to be designed which will benefit from all of the information gathered during drilling of the well and equipment to be sourced which will overcome the current technical limitations of the open hole test tools. A similar approach may also be undertaken in the deeper zones but does not preclude earlier open hole testing (as currently being progressed in the Kurre Chine A).

Gulf Keystone analysis indicates that due to the intense flexure of the Sheikh Adi structure a more extensive natural fracture system is likely to be found on the other side of a major reverse fault, to the north of the current well location. A well into this area is being considered.

Shaikan-4

Shaikan-4, second deep appraisal well, 6 kilometers to the north-west of the Shaikan-1 discovery well, is targeted to drill to the top of the Permian. The drilling rig is currently 98% rigged up at the well site, and is expected to spud before the end of May.

Bekhme-1

Bekhme-1, second exploration well on the Akri-Bijeel block operated by Kalegran Ltd. (a 100% subsidiary of MOL), is drilling ahead with 12.25 inch hole at a depth of 1,776 meters, in the upper sections of the Jurassic.

Oil Export

Following a request from the Ministry of Natural Resources of the Kurdistan Regional Government ("KRG"), the Company is preparing to export up to 5,000 barrels of oil per day (bopd) from its Extended Well Test ("EWT") facility at Shaikan. A number of operational, commercial and legal preparations are required in order to be able to implement this request which the Company is currently undertaking. Commencement of the export of oil is still subject to final approval of the KRG.

John Gerstenlauer, Gulf Keystone's Chief Operating Officer commented, "We will soon have four exploration/appraisal wells underway in Kurdistan with further wells expected to spud before the end of the summer. The Company's steady progress in the Shaikan-2 and Sheikh Adi-1 drilling is highly encouraging and we look forward to obtaining more results from these two wells soon. The Company views the recent announcement by the Kurdistan Regional Government confirming release of the first oil export payment to the KRG as an extremely positive development for all the oil producers in the Kurdistan Region of Iraq. This is especially good news for Gulf Keystone since we are preparing to meet the KRG's request to begin oil export at an initial volume of up to 5,000 bopd of crude."

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Gulf Keystone Boosts Estimates from Shaikan Discovery

Gulf Keystone Boosts Estimates from Shaikan Discovery

Thursday, April 14, 2011
Gulf Keystone Petroleum Ltd.

Gulf Keystone announced a major revision of the gross oil-in-place volumes for the Shaikan discovery in the Kurdistan Region of Iraq.

The revised gross oil-in-place volumes for the Shaikan discovery, as calculated by Dynamic Global Advisors (DGA), independent Houston-based exploration consultants, are a P90 value of 4.9 billion barrels to a P10 value of 10.8 billion barrels of oil-in-place with a mean value of 7.5 billion barrels and a P1 value of 15 billion barrels.

This is a very significant upward revision from the previously announced range of 1.9 to 7.4 billion barrels of gross oil-in-place with a mean value of 4.2 billion barrels and a P1 value of 13 billion barrels, also calculated by DGA. The revision is based on the data acquired since the last resource evaluation of the Shaikan discovery by DGA issued in January 2010, which was supported by an additional third party analysis by Ryder Scott consultants with a range of gross total petroleum-initially-in-place (PIIP) of 1.52 (P90) to 7.52 (P10) billion barrels.

The new data has been acquired as a result of:

* Shaikan-2 oil discovery and well test in the upper section of the Jurassic section, nine km to the east of Shaikan-1
* Shaikan-1 extended well test production
* Shaikan-3 testing and production results
* Preliminary results of the analysis of 3D seismic data acquired for the Shaikan (599km²) and Sheikh Adi (215km²) blocks
* Evaluation of existing seismic lines and regional geological data for the Ber Bahr, Akri-Bijeel (Bijeel-1 well) and Sheikh Adi blocks.
* PVT (pressure, volume, temperature) analysis of oil samples from the Triassic Kurre Chine tests at Shaikan-1.

The Shaikan-2 appraisal well is now drilling deeper into the Jurassic and is scheduled to drill on into the Triassic. Once the well reaches TD at the bottom of the Triassic or into the top of the Permian interval, the Company will consider a possible further revision of the Shaikan oil-in-place volumes, taking into account additional information from the reservoirs previously only penetrated by Shaikan-1 and from potential additional discoveries from possible zones below those reached by Shaikan-1, projected by DGA to contain an additional 1 to 5 billion barrels of prospective resources.

John Gerstenlauer, Gulf Keystone's Chief Operating Officer, commented, "We have always believed that the initial gross oil-in-place range for the Shaikan discovery was a conservative estimate that would increase as more information became available. This gross oil-in-place volumes revision by DGA, entirely supported by the Company's management and Board of Directors, confirms that belief. We eagerly look forward to additional drilling results from Shaikan-2, the soon to be spudded Shaikan-4 and the remainder of the Shaikan appraisal drilling program. We firmly believe that even with this upward revision the numbers for the Shaikan discovery are still conservative."