www.gulfkeystone.com
Gulf Keystone Petroleum Ltd. (AIM: GKP) is an independent oil and gas exploration and production company focused on exploration in the Kurdistan Region of Iraq. It holds a majority working interest in the Shaikan, Sheikh Adi and Ber Bahr exploration blocks and a further interest in the Akri-Bijeel block. Gulf Keystone is the Operator of the Shaikan and Sheikh Adi Production Sharing Contracts. Following a major discovery at Shaikan in 2009 and a discovery at Akri-Bijeel in 2010, the Company is undertaking an ambitious 2011-2012 exploration and appraisal programme across the four adjacent blocks. Gulf Keystone is also focused on continuing domestic oil sales and increasing oil export operations in order to move towards the Company’s production target of over 5,000 barrels of oil per day (“bopd”), increasing to 10,000 bopd thereafter.
Gulf Keystone Petroleum clarifies KRG's third party option over Shaikan and Akri-Bijeel
Gulf Keystone Petroleum (LON:GKP) 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.
Should it exercise its rights then Gulf Keystone’s share of Shaikan would fall from 75 per cent 51 per cent, while its stake in Akri-Bijeel would be reduced to 12.8 per cent from 20 per cent.
“After the Government of the Kurdistan Region of Iraq has exercised its third party assignment option in the Shaikan and Akri-Bijeel production sharing contracts, the respective PSCs will be further amended and Gulf Keystone will issue an appropriate announcement,” GKP said in a stock exchange statement this morning.
The clarification comes a day after the group gave an upbeat progress report in which it said it exited 2011 producing at a rate of more than 4,000 barrels of oil a day from the extended test facility on the Shaikan block.
In the same update on Monday GKP said the Shaikan-4 appraisal well has completed one of seven planned tests targeting the Jurassic and Triassic formations.
The company also revealed Shaikan-5 initially made slower than anticipated progress due to “stability issues encountered in the shallow formations”. However the well, which is at a depth of 1,008 metres, is now drilling ahead to a total depth of 3,500 metres.
The sixth well on the Shaikan field has now been drilled to a measured depth of 362 metres and a 26 inch casing has been set. The plan is to drill to a total depth of 3,800 metres.
Shaikan 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 group also has interests in the Ber Bahr block in Kurdistan, in which it holds 40 per cent.
The current resource estimate is 1.5 billion barrels of oil in place, though analysts believe Ber Bahr could actually be larger than Shaikan.
The first exploration well on the block is currently underway and has reached a depth of 2,418 metres – not far from its target depth of 3,000 metres.
