Gulf Keystone Petroleum cheered by initial oil flow from Shaikan-2 appraisal well

Friday, Mar 18 2011 by
Gulf Keystone Petroleum cheered by initial oil flow from Shaikan2 appraisal well

Gulf Keystone Petroleum (LON:GKP) , the oil and gas group active in the Kurdistan region of Iraq, was the best performer on the Alternative Investment Market during early trading this morning after it reported promising early signs from the Shaikan-2 appraisal well. The company said it had seen a significant initial oil flow on the Shaikan-2 well in a 44 meter interval (between 1,792m to 1,836m) in the Jurassic age formation. Gulf Keystone is currently involved in an appraisal and exploration programme on its Kurdistan blocks where it wants to firm up the precise nature of the Shaikan field.

In a statement, Gulf Keystone said: “Substantial smoke and / or the oil flare is/ are visible from the company's office in Erbil some considerable distance from the Shaikan-2 location, indicating that a significant flow has been encountered and prompting the company to issue this announcement.”

Gulf Keystone is currently conducting a test, which is expected to continue for another 72 hours to obtain further results on flow rate, oil quality and similar information, which will be reported later. Shaikan-2 is the first deep appraisal well to be drilled on the Shaikan structure. The well is drilling approximately nine kilometres to the south-east of the Shaikan-1 discovery well.

The company has a 75% working interest in the Shaikan block and is partnered with Kalegran Ltd, a subsidiary of Hungarian oil and gas group MOL, and Texas Keystone Inc. which have the remaining 20 and 5 percent working interests respectively. The Gulf Keystone Petroleum share price rose by 18.6% to 146.5p.

Todd Kozel, Gulf Keystone’s executive chairman and chief executive, said: “This initial oil flow continues to confirm our belief in the world class nature of the Shaikan discovery. We are eagerly anticipating more detailed results from the Shaikan-2 well test.”

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Gulf Keystone Petroleum Limited (Gulf Keystone) is a holding company, which is engaged in the oil and gas exploration and production. The Company operates in the Kurdistan Region of Iraq. It operates through segments, including Kurdistan Region of Iraq and United Kingdom. The Kurdistan Region of Iraq segment consists of the Shaikan, Ber Bahr blocks and the Erbil office, which provides support to the operations in Kurdistan. The United Kingdom segment provides geological, geophysical, engineering and corporate services to the Company. It operates in the Shaikan oil field. The Shaikan block is situated over 85 kilometers northwest of Erbil, covering an area of over 280 square kilometers. more »

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