Gulf Keystone Petroleum Regulatory News (GKP)

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.

12 July 2010

Gulf Keystone Petroleum Ltd. (AIM: GKP)

("Gulf Keystone" or "the Company")

Additional Well Testing Commences at Shaikan-1

Gulf Keystone announces the commencement of workover/testing operations on the Shaikan-1 discovery well.

The Company will execute the following work programme in the given sequence:

1. Zone three: Re-test the Butmah (lower Jurassic) formation, from 1,783 metres to 1,814 metres depth in the well. This is a very high permeability but low energy zone due to low gas content. The zone, which originally lacked sufficient energy to flow to surface, will be re-tested using a 350 hp Electric Submersible Pump ("ESP") that will more adequately test the inflow capabilities of this zone. 

2. Zone two: Re-test the Mus (upper Jurassic) formation, from 1,627 metres to 1,667 metres. This is also a very high permeability zone with little reservoir energy due to the general lack of associated gas (low gas-oil-ratio or "GOR"). This zone, which originally tested at 120 bopd, will also be re-tested using the same 350 hp ESP.

3. Zone one: Complete the well for long term production testing (18 to 24 months) in the original discovery zone, the Sargelu (upper Jurassic, 1,450 metres to 1,510 metres). This zone has a higher GOR, in the range of 120 cubic feet of gas per barrel of oil, and demonstrated natural flow rates of almost 7,500 bopd, despite the limitations of the original test equipment. It is the current intention that this production will be processed, through the facilities currently being constructed, and sold. 

4. Drill an appraisal well through the Cretaceous intervals, 50 metres to the east of the existing Shaikan-1 well. Much of the Cretaceous age interval could not be properly logged and evaluated during the initial drilling of the Shaikan-1 well due to a lack of drilling mud returns. Our evaluation of small portions of well logs from the initial drilling would seem to indicate that the Cretaceous intervals may hold significant quantities of recoverable oil. These oil volumes could be substantial (estimated by Dynamic Global Advisors at more than 700 million barrels of oil-in-place) and were not fully taken account of in current resource estimates.

Test zones 4 and 5, which flowed 1,700 bopd and 10,000 boepd respectively, will not be re-entered. The entire workover and drilling program is estimated to take four to five months to complete.

Enquiries:

or visit: www.gulfkeystone.com

John Gerstenlauer, the Company's Chief Operating Officer, who has 31 years of relevant experience within the sector meets the criteria of a qualified person under the AIM note for mining, oil and gas companies and 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 company focused on exploration in the Kurdistan region of Northern Iraq.

§ Gulf Keystone Petroleum International (GKPI) holds Production Sharing Contracts for fourexploration blocks in Kurdistan.

§ The Company's shares have traded on the AIM market, since listing on 8 Sept 2004.

§ Gulf Keystone Petroleum Limited is registered in Hamilton, Bermuda with offices in Erbil, Kurdistan, Algiers, Algeria and London, UK.

§ Oil 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 volumes is represented by a probability distribution with a low 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 and P10 represents at least a 10% probability (low) that the quantities determined to be in place will equal or exceed the high estimate. P1 represents at least a 1% probability that the quantities determined to be in place will equal or exceed the ultimate upside 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 document (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.