Gulf Keystone Petroleum (LON:GKP), the oil and gas group active in Kurdistan, has successfully raised £109.2m in a share placing priced at 140p per share. The fundraising comes as the exploration and production group looks to speed up appraisal drilling work on its Shaikan field, near the city of Dihok, where in August 2009 it made its first significant oil discovery with the Shaikan-1 exploration well. The company has now secured the use of a third drilling rig and is expecting to have the field fully appraised by the first half of 2012.

Following the Shaikan-1 well, Gulf Keystone went on to make a significant discovery with the Bijeel-1 well on the nearby Akri Bijeel block. As part of the revised drilling plan, the company has added the Shaikan- 5, Shaikan-6 and Shaikan-7 wells and will also drill the previously delayed Shaikan-2 and Shaikan-4 wells. Elsewhere, the company has earmarked cash for additional testing and production facilities, in anticipation of success from current drilling of Sheikh Adi-1 and / or one or more of the Shaikan appraisal wells. The new money will also fund Gulf Keystone's share of the first exploration well on the Ber Bahr block, and a further exploration well on Akri-Bijeel (Bekhme-1).

Gulf Keystone said the additional funding, along with anticipated income from test production, would significantly strengthen its financial position and allow flexibility in the work programme. As a result it said it would have the opportunity to take advantage of any appropriate opportunities to further add value to its working interest position in Kurdistan.

Todd Kozel, the company’s executive chairman, said: “This strengthening of our balance sheet marks another important step towards our full understanding of the true scale of the world class Shaikan field. With access to a third dedicated drilling rig, we will now be able to complete the appraisal drilling campaign earlier than previously envisaged. Furthermore, we are looking forward to continuing our exploration work across the Ber Bahr and Akri-Bijeel Blocks, whilst also enjoying the financial flexibility to be able to move quickly should other opportunities arise."

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