Gulf Keystone Petroleum Regulatory News (GKP)

2 May 2007 07:00

Gulf Keystone Petroleum Ld02 May 2007 BLOCK 129 - HEK-3 WELL TEST UPDATE Gulf Keystone Petroleum Limited, an independent oil and gas exploration companyoperating in the Republic of Algeria, in partnership with SONATRACH, todayissues the following update on the HEK-3 well in Block 129 (Djebel Bottena). Well test operation and results On 7th April 2007 Gulf Keystone commenced workover operations on well HEK-3, anoil and gas discovery well drilled by SONATRACH in 2004. At that time, the wellwas tested over the Cretaceous, Coniacian limestone interval and achieved, postacidisation, flow of 184 barrels of oil over a 4 hour period, prior to the wellbeing suspended. Gulf Keystone re-entered the well and tested the same zone,over the measured interval 2,439 to 2,446 metres, employing an acid fracturingtechnique to improve connectivity between the reservoir and the wellbore. Aftercleaning up the well, a stabilised flow rate of 1,040 barrels per day of 31degrees API oil was achieved through a 32/64 inch choke. The well was flowedthrough a separator for a total of 4.5 days and over 3,500 barrels of oil wereproduced during this period. The crude contained little entrained gas and has anestimated gas/oil ratio of 93 scf/bbl. The well is presently suspended with apressure gauge in the hole. This will be retrieved in 3-4 weeks to obtain thepressure data. A large amount of good quality engineering data was collected during the testprogramme which, combined with the produced volume of oil and the long flow andshut in periods, will provide valuable data for reservoir evaluation and fielddevelopment study purposes. Production optimisation studies will be carried outto analyse options for further increasing well productivity with a view to thepossible early development of this discovery, subject to necessary consents. Inthis regard, consideration will be given to pump and/or gas lift options tofurther improve both the rate and delivery pressure of the well. The information contained in this release has been reviewed and approved by MrPeter Dempsey (B,Sc, M.Sc), VP Engineering for Gulf Keystone, who has 24 yearsexperience as a petroleum / reservoir engineer in the oil industry. Bill Guest, President of Gulf Keystone said: "We are very pleased to have successfully re-entered well HEK-3 and achievedwhat we believe to be a commercial rate of oil production. The successful use ofacid fracturing technology on this well, to optimise production performance fromthis complex reservoir, provides us encouragement to consider a wider use ofthis technology within the HEK area and also within our northern licence areas(Ferkane and Ben Guecha blocks). Equities in Block 129 are:Gulf Keystone Petroleum LTD. 75% (Operator)SONATRACH 25% Enquiries Gulf Keystone Petroleum +44 (0)20 7514 1400Bill GuestTodd KozelJon Cooper Citigate Dewe Rogerson: 020 7638 9571Media enquiries: Martin JacksonAnalyst enquiries: Kate Delahunty / Nina Soon or visit: www.gulfkeystone.com Notes to editors: Gulf Keystone was awarded Block 129 in April 2005 in the 6th International BidRound. Block 129 is operated by Gulf Keystone and covers an area of 4,369 km(2).The block also contains two existing SONATRACH discoveries, the Djebel Onk oilfield (excluded from SONATRACH/Gulf Keystone association) and the Djebel Fouagas discovery. This information is provided by RNS The company news service from the London Stock Exchange