Not for release, publication or distribution in or into the United States or jurisdictions other than the United Kingdom and Bermuda where to do so would constitute a contravention of the relevant laws of such jurisdiction.
19 July 2012
Gulf Keystone Petroleum Ltd. (AIM: GKP)
("Gulf Keystone" or "the Company")
Shaikan Discovery: P90 volumes increase from 8 billion barrels to 12.4 billion barrels
Today Gulf Keystone will hold the Company's Annual General Meeting ("AGM") in line with the Notice of the 2012 AGM dated 22 June 2012.
Prior to today's AGM, Gulf Keystone Petroleum Ltd. is pleased to announce another major upgrade of the gross oil-in-place volumes for the Shaikan field in the Kurdistan Region of Iraq.
The revised gross oil-in-place volumes for the Shaikan field, as calculated by Dynamic Global Advisors (DGA), independent, Houston-based exploration consultants, are a P90 value of 12.4 billion barrels to a P10 value of 15 billion barrels of oil-in-place, with a mean value of 13.7 billion barrels.
This very significant upgrade of the Shaikan resources estimates revises the previously announced range of 8.0 to 13.4 billion barrels of gross oil-in-place with a mean value of 10.5 billion barrels.
This upgrade is based on the data acquired since the last resource evaluation of the Shaikan discovery by DGA issued in November 2011 and is the fourth successive upward revision by DGA since the Shaikan discovery was announced in August 2009.
DGA's conclusions are based on the new data acquired as a result of:
· Daily geological reports, lithlogs, mud logs, well logs, well tests and core reports for the Shaikan-5 and -6 appraisal wells, including logs and cores samples obtained with the Shaikan-6 well indicating the deepest oil shows recorded by the Company to date.
· Re-mapping and re-interpretation of the Shaikan reservoir horizons, including the Cretaceous Sarmord and Chia Gara formations, the Jurassic Sargelu, Alan, Mus and Butmah formations, the Triassic Baluti formation and the A, B and C members of the Kurra Chine formation, using the latest results of the 3D seismic data interpretation applied to the Shaikan-2, -4, -5 and -6 appraisal wells.
· Net pay mapping for 10 reservoir intervals across the Shaikan anticline.
· Updated data from the Shaikan-1 discovery well and Shaikan-2, -3, -4, -5 and -6 appraisal wells, which now includes volumes from the Cretaceous Chia Gara and the Triassic Baluti formations.
This upgrade represents a much tighter distribution of the Shaikan gross oil-in-place volumes, with the P90 value having increased by 4.4 billion barrels.
It indicates a narrowing gap between the P90 and P10 values, currently standing at 2.6 billion barrels of gross oil-in-place, which is a firm confirmation of the progress made in the understanding of the dimensions of the giant Shaikan field.
DGA's updated estimates also indicate an increase in the mean value of Shaikan's associated gross gas-in-place volumes from 3.5 trillion cubic feet to 4.9 trillion cubic feet.
This report marks the completion of the appraisal programme of the Shaikan field and will be followed by the submission of a Declaration of Commerciality by the Company to the Ministry of Natural Resources of the Kurdistan Regional Government, under the terms of the Production Sharing Contract regarding the Shaikan block. This Declaration of Commerciality will be followed by the submission of an Appraisal Report within two months.
Gulf Keystone is the Operator of the Shaikan block with a working interest of 75 per cent and is partnered with Kalegran Ltd. (a 100 per cent subsidiary of MOL Hungarian Oil and Gas Plc.) and Texas Keystone Inc., which have working interests of 20 per cent and 5 per cent respectively. Texas Keystone Inc. holds its interest in trust for Gulf Keystone, pending transfer of its interest to the Company.
John Gerstenlauer, Gulf Keystone's Chief Operating Officer, commented:
"Sometimes people get complacent about our operational track record. This latest upgrade, which now includes results from the Shaikan discovery well and five appraisal wells, is a timely reminder about Gulf Keystone's stellar drilling performance in the Kurdistan Region of Iraq.
In the space of six months, Shaikan's P90 estimate has increased by 4.4 billion barrels of gross oil-in-place, just one billion barrels short of the previous P10 estimate in November 2011. Such results are rarely heard of in the industry today and we are still to explore the deeper Triassic and Permian horizons with the Shaikan-7 exploration well and account for the potential oil volumes in the Cretaceous to the north of the field.
This success is both a function of the field, which is a giant by any measure, and of the team we have in place, both on the ground and in the Company's offices, which is progressing the move from the appraisal phase to the large-scale staged 400,000+ barrels of oil per day development. As exploration and development activities in the region continue to go from strength to strength, more and bigger players are beginning to see the potential of the region, and Shaikan undoubtedly remains the jewel in the crown."
At today's AGM the Company will give shareholders an overview Investor Presentation which will not contain any new material information pertaining to the Company's operations and activities. The accompanying presentation slides will be available on the Company's website at www.gulfkeystone.com at approximately 1pm UK time.
Gulf Keystone Petroleum:
+44 (0) 20 7514 1400
Todd Kozel, Executive Chairman and
Chief Executive Officer
Ewen Ainsworth, Finance Director
Strand Hanson Limited
+44 (0) 20 7409 3494
Simon Raggett / Rory Murphy / James Harris
Mirabaud Securities LLP
+44 (0) 20 7878 3362
Pelham Bell Pottinger
+44 (0) 20 7861 3232
or visit: www.gulfkeystone.com
John Gerstenlauer, the Company's Chief Operating Officer, who has 33 years of relevant experience within the sector and meets the criteria of a qualified person under the AIM note for mining, oil and gas companies, has reviewed and approved the technical information contained in this announcement. Mr. Gerstenlauer is a member of the Society of Petroleum Engineers.
Notes to Editors:
§ 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.
§Gulf Keystone Petroleum Limited is registered in Hamilton, Bermuda with further offices in Erbil, Kurdistan (Iraq), Algiers, Algeria and London, UK.
§ Gulf Keystone Petroleum International (GKPI) holds Production Sharing Contracts for fourexploration blocks in Kurdistan, including the Shaikan, Sheikh Adi, Ber Bahr and Akri-Bijeel blocks.
§ Shaikan is a major discovery with independently audited gross oil-in-place volumes of between 12.4 billion barrels to 15 billion barrels calculated on the P90 to P10 basis, with a mean value of 13.7 billion barrels.
§ The Company's shares have traded on the AIM market of the London Stock Exchange since listing on 8 September 2004.
§ Gross oil-in-place (or petroleum-initially-in-place) is that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The range of uncertainty of the oil-in-place (petroleum-initially-in-place) volumes is represented by a probability distribution with a low, mid and high provided: P90 represents at least a 90% probability (high) that the quantities determined to be in place will equal or exceed the low estimate; P50 represents at least a 50% probability (mid) that the quantities determined to be in place will equal or exceed the mid estimate; and P10 represents at least a 10% probability (low) that the quantities determined to be in place will equal or exceed the high estimate.
Not for release, publication or distribution, directly or indirectly, in or into the United States or jurisdictions other than the United Kingdom and Bermuda where to do so would constitute a contravention of the relevant laws of such jurisdiction. This announcement (and the information contained herein) does not contain or constitute an offer of securities for sale, or solicitation of an offer to purchase securities, in the United States or jurisdictions other than the United Kingdom and Bermuda where to do so would constitute a contravention of the relevant laws of such jurisdiction. The securities referred to herein have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States unless the securities are registered under the Securities Act, or an exemption from the registration requirements of the Securities Act is available. No public offering of the securities will be made in the United States.
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