Strand Hanson Ltd and Perella Weinberg Partners will be jointly responsible for coordinating and advising the company on the proposed sale of its 20 per cent interest in the Akri-Bijeel block, in the Kurdistan region of northern Iraq.

The block is operated by a subsidiary of Hungary’s MOL Hungarian Oil and Gas Plc, which owns the remaining 80 per cent interest.

The Bijell discovery, by MOL’s estimates, contains 2.4 billion barrels oil-in-place.  And ongoing exploration and appraisal work programme is targeting existing and identified hydrocarbon prospects in the Akri-Bijeel block.

Gulf Keystone announced its plans to sell the Akri-Bijeel stake in September, as part of a broader strategy for the company’s future development.

It also comes after a brisk round of consolidation of the emerging Kurdistan oil industry last year.  

The period also saw Vallares, then a £2 billion vehicle for Hayward and City financier Nat Rothschild, merge with Turkish firm Genel, one of the leading players in Kurdistan. Afren (LON:AFR) and Petroceltic (LON:PCI) also inked deals in the region.

Gulf Keystone Petroleum (LON:GKP) has received permission to transfer its interest in the Hassi Ba Hamou permit in Algeria to BG Group and Sonatrach at no cost. 

The receipt of formal government approvals ends a process that began back in 2010.

It is part of a strategic exit from the country which will allow the company to concentrate on its world class oil assets in Kurdistan, the semi-autonomous region of Iraq.

Todd Kozel, company’s chief executive, said:  "We are pleased that with the HBH transfer we have made good progress towards achieving our goal of a gradual strategic exit from Algeria. 

“We are firmly focused on our operations spanning four exploration blocks in the Kurdistan Region of Iraq, including the Shaikan world-class discovery, where the 2012 and 2013 high impact drilling campaign is currently underway following excellent results achieved in 2011.”

The flagship Shaikan block is estimated to contain 8 billion barrels of crude calculated on a P90 basis – meaning the oil has a 90 per cent certainty of being produced.  The P10 value is 13.4 billion barrels, giving a mean figure of 10.5 billion barrels.

The last update was possibly one of the most encouraging so far as the company’s chief operating officer, John Gerstenlauer, said the Shaikan-4 may be the best well it has logged to date.

It achieved a flow rate of 4,970 barrels and 7 million standard cubic feet of gas a day from a thin zone at the bottom of the lower-lying Kurre Chine B formation.

The oil was a 39 degree API light crude, while the gas flowed at a wellhead pressure 1,101 PSI. 

In the Kurre Chine C, Shaikan-4 achieved a flow rate of 563 barrels a day and flowed 3.65 million cubic feet of gas. These were two of seven planned well tests.    

Gulf Keystone Petroleum confirmed this morning the Kurdistan Regional Government still retains the option to nominate a third party to participate in the Shaikan and Akri-Bijeel production sharing contracts. In addition the KRG retains what are called “back-in-rights” to the oil projects in Northern Iraq.

The excitement around Gulf Keystone Petroleum has been immense ever since it struck oil on the Shaikan block in Kurdistan. Following a busy year with drill bit there is little doubt now the group is sitting on a world class discovery. Emerging now is the huge potential of its other projects in the region. 

Gulf Keystone Petroleum (LON:GKP) told investors that it is not in talks to sell the company.

The statement comes after a weekend report claimed that US giant Exxon Mobil was lining up a bid for the company. The report claimed that the American oil firm had sounded out GKP over a £7 billion takeover, which would price the AIM-quoted stock at 800p a share.

Subsequently GKP shares gained as much as 30 per cent to reach an all time high of 219.75p a share.

However this afternoon the firm put out a response to what it called ‘unfounded press speculation’ regarding a potential offer for the company. 

"The Board of Gulf Keystone does not normally comment on speculation, but confirms that it remains committed to creating value for shareholders, via the continuing 2011/2012 exploration and appraisal programme on its world-class assets in the Kurdistan Region of Iraq,” it said.

“Whilst there is clearly increasing interest in the region in which Gulf Keystone operates, the Board is not in discussions with regard to a sale of the company.”

Gulf Keystone Petroleum (LON:GKP) shares were trading at new highs this morning on speculation that US giant Exxon Mobil is lining up a bid.

A weekend report claimed the American oil firm had sounded out GKP over a £7 billion takeover, which would price the AIM-quoted stock at 800p a share.

It went on to say that GKP’s board would not accept such a deal and a number of other companies were monitoring the situation. The other potential suitors named by the Sunday Independent were Sinopec and Chevron.

At the time of writing, neither Gulf Keystone nor Exxon had commented.

In early trading, GKP shares gained as much as 53.5p, or 32 per cent, and were changing hands at 220p.

Last month it was reported that Exxon had signed contracts with the Kurdistan Regional Government for six blocks within the semi-autonomous region of Iraq.

While it was seen as a massive vote of confidence in the area, it was also seen as a potentially incendiary move which may provoke a political backlash from the Iraqi authorities in the south.

It comes at a delicate time as Baghdad and the KRG attempt to pass legislation that would support the award of these potentially lucrative oil and gas contracts in Kurdistan.

Of late, the region has become a magnet for mid-tier players such as Marathon, Hess (NYSE:HES) and Repsol (MCE:REP).

GKP was, however, one of the early entrants. Its exploration success in the past three years, principally the massive Shaikan oil discovery, has seen the firm grow into one of AIM’s largest companies.

Indeed, the firm’s corporate transformation is reflected by its plan, announced in September, to step up to London’s main market in the coming months.

The company now plans to build a second extended well test production facility. This will allow the firm to establish oil production in the order of 40,000 barrels of oil per day from the Shaikan field.

"Following these successful well tests at Shaikan-2 and in anticipation of equally positive results from the Shaikan-4 appraisal well, we plan to design and build an additional testing and production facility for Shaikan-2 capable of producing a minimum of 20,000 bopd,” said chief operating officer John Gerstenlauer. 

“The completion of the ongoing upgrade of the existing Shaikan-1 & 3 EWT facilities will lead to an initial production of 20,000 bopd of Shaikan crude to export specifications by mid-2012. 

“The Shaikan-2 facility will increase this production target to 40,000 bopd by the end of 2012.” 

Gerstenlauer added: “With Shaikan being one of the three major producing oil fields in the Kurdistan Region of Iraq today, we look forward to making a significant contribution to the mid-term regional production and export targets recently announced by the Kurdistan Regional Government."  

Shaikan-2 well was drilled nine kilometres south-east of the Shaikan-1 discovery well.

Nine well tests were conducted on Shaikan-2,  in all target formations in the Triassic and Jurassic, and it achieved a maximum aggregate flow rate of 18,900 barrels of oil per day.

The preliminary results of the testing programme formed part of the new data used by to calculate the most recent upgrade to the independently assessed oil in place estimate for Shaikan.

Shaikan is currently estimated to contain gross oil-in-place volumes of 8-13.4 billion barrels. This is calculated on the P90 to P10 basis, with a mean value of 10.5 billion barrels.

The Shaikan-2 well will be completed as a producer and tied to an additional EWT facility which Gulf Keystone plans to build and install in 2012.

Now that the testing programme is complete the drill rig is moving on to the Shaikan-6 appraisal well location. This is nine kilometres east of the Shaikan-2 appraisal well.

Shaikan-6 is set to spud before the end of  2011. It will be drilled to around 3,800 meters, subject to technical conditions.

Gulf Keystone Petroleum (LON:GKP) today appointed Lord Charles Guthrie as a non-executive director of the company.

Lord Guthrie has a distinguished background in the military, politics and business. He served in the British army from 1957 to 2001, during that time (between 1997 and 2001) he was chief of the defence staff and the principal military adviser to the government. 

"As we set about the further strengthening of our Board, we are delighted to welcome Lord Guthrie to Gulf Keystone as a non-executive director,” said chief executive Todd Kozel.

“He brings a wealth of experience to the company, honed over a long and distinguished career in which he has worked at the highest levels of strategy and policy development, both in the UK and abroad.  

“We greatly look forward to his positive contribution to Gulf Keystone as we continue to capture the value of our world class acreage in Kurdistan."

Last month Gulf Keystone revealed the details of its ambitious plan for the next stage of its development. It also raised US$200 million through an oversubscribed placing. 

The new cash will allow the company to increase its focus on the aggressive programme of exploration and appraisal drilling on the Shaikan, Sheikh Adi and Ber Bahr blocks in Kurdistan. Some of the funds will also be used to expand the group’s production and export capabilities.

This was the latest in a series of significant announcements in the past few weeks which have seen the company outline its ambitious plans for the future.

In his interim results statement GKP founder and chief executive Todd Kozel unveiled a plan to sell a 20 per cent interest in the Akri Bijeel field, which hosts a known oil discovery and is expected to fetch ‘hundreds of millions of dollars’.

These funds, along with the US$200 million raised yesterday, will be spent on a programme to upgrade the existing Shaikan Extended Well Test (EWT) facilities, which will increase existing production capacity to 20,000 bopd (from Shaikan 1 & 2) and allow it to build a second testing and production facility (for Shaikan-2 & 4) which will also be capable of producing 20,000 bopd.

As well as supporting work on a new export pipeline capable of carrying 440,000 barrels of oil each day.