Gulf Keystone Petroleum Regulatory News (GKP)

25 Jul 2008 07:00



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

25 July 2008

Gulf Keystone Petroleum Ltd.

("Gulf Keystone" or "the Company")

£25.10 million (Gross) Placing to Fund 

Further exploration and development in Algeria and Kurdistan

Gulf Keystone Petroleum Ltd., an independent oil and gas exploration and production company with assets in Algeria and Kurdistan, is pleased to announce that it has today completed a fully subscribed placing (the "Placing") of 89,509,488 new ordinary shares (the "Placing Shares") at a placing price of 28p per share (the "Placing Price") raising gross proceeds of approximately £25.10 million. These shares were placed by the Company's brokers, Tristone Capital Ltd. and RBC Capital Markets, with institutional clients and certain of the Company's Directors, management and associates.

Use of Proceeds

Together with the Company's existing cash balances and forecast cash flow from oil production the net proceeds of the Placing will be used to fund the further exploration and appraisal of the HBH Permit in Algeria and the drilling of an additional well in Kurdistan.

The HBH Permit, which contains the HBH gas field, comprises five blocks within an area of 18,380 square kilometres in the Bechar Basin in Algeria's Western Desert. Gulf Keystone and its partners are currently drilling the fourth well of a six well campaign. Following the recently announced success of the RM-1 exploration well, Gulf Keystone and its partners agreed to go into the second prospecting period of the HBH Permit ("Phase 2"). Phase 2 includes a work programme obligation of 500 km2 of 3D seismic, 1 exploration well and 2 appraisal wells. In addition the Company and its partners are considering acquiring additional discretionary 2D and 3D seismic.

In November 2007 Gulf Keystone was awarded interests in two blocks in the Kurdistan Region of Iraq. 2D seismic has already been completed over the Shaikan Block and the acquisition of 2D seismic on the Akri-Bijeel block is ongoing. The Company has previously announced plans to drill a well on the Shaikan block, currently scheduled for early 2009. Following positive initial analysis of the acquired seismic, combined with the large reserve potential of the asset, the Company now plans to drill an additional exploration/appraisal well on its Shaikan block.

Participation in the Placing

Certain of the Directors of Gulf Keystone participated in the Placing for in aggregate 10,448,971 Placing Shares. Each of Jeremy Asher, Non Executive Director, (through Agile Energy Limited, a Channel Islands company owned by the Asher Family Trust, of which, Jeremy Asher is the settlor and lifetime beneficiary), Todd Kozel, Executive Chairman and CEO, Ewen Ainsworth, Finance Director and Mehdi Varzi, Non Executive Director are participating as follows:

* In addition to the above interests, Todd Kozel is also a shareholder in Gulf Keystone Petroleum Company LLC which owns 40,000,000 common shares

Admission of Placing Shares

Application has been made for the Placing Shares to be admitted to trading on AIM and dealings are expected to commence on 31 July 2008. Following the Placing there will be 368,000,348 shares in issue.

Todd Kozel, Chairman and CEO, said

"Gulf Keystone is at the beginning of an exciting stage in its growth. We are preparing to drill our first well in Kurdistan where our prospects have real company making potential, and our exploration and appraisal successes on HBH have encouraged us to move quickly towards the development of the HBH gas field in Algeria. Our future upside could be significant and I believe this is reflected in the investor response to the Placing, and further evidenced in the support of my fellow directors, who joined me in subscribing for new shares."

Enquiries

or visit: www.gulfkeystone.com

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.