Gulf Keystone Petroleum significantly increases oil estimates at Shaikan

Source: Gulf Keystone Petroleum

Gulf Keystone Petroleum Ltd. (AIM:GKP) announces a major revision of the gross oil-in-place volumes for the Shaikan discovery in the Kurdistan Region of Iraq.

The revised gross oil-in-place volumes for the Shaikan discovery, as calculated by Dynamic Global Advisors (DGA), independent Houston-based exploration consultants, are a P90 value of 4.9 billion barrels to a P10 value of 10.8 billion barrels of oil-in-place with a mean value of 7.5 billion barrels and a P1 value of 15 billion barrels.

This is a very significant upward revision from the previously announced range of 1.9 to 7.4 billion barrels of gross oil-in-place with a mean value of 4.2 billion barrels and a P1 value of 13 billion barrels, also calculated by DGA. The revision is based on the data acquired since the last resource evaluation of the Shaikan discovery by DGA issued in January 2010, which was supported by an additional third party analysis by Ryder Scott consultants with a range of gross total petroleum-initially-in-place (PIIP) of 1.52 (P90) to 7.52 (P10) billion barrels.

The new data has been acquired as a result of the Shaikan-2 oil discovery and well test in the upper section of the Jurassic section, nine km to the east of Shaikan-1, as well as the Shaikan-1 extended well test production and the Shaikan-3 testing and production results. Additionally preliminary results of the analysis of 3D seismic data acquired for the Shaikan (599km²) and Sheikh Adi (215km²) blocks, the evaluation of existing seismic lines and regional geological data for the Ber Bahr, Akri-Bijeel (Bijeel-1 well) and Sheikh Adi blocks, and PVT (pressure, volume, temperature) analysis of oil samples from the Triassic Kurre Chine tests at Shaikan-1 also helped to revise the estimate.

The Shaikan-2 appraisal well is now drilling deeper into the Jurassic and is scheduled to drill on into the Triassic. Once the well reaches TD at the bottom of the Triassic or into the top of the Permian interval, the Company will consider a possible further revision of the Shaikan oil-in-place volumes, taking into account additional information from the reservoirs previously only penetrated by Shaikan-1 and from potential additional discoveries from possible zones below those reached by Shaikan-1, projected by DGA to contain an additional 1 to 5 billion barrels of prospective resources.

"We have always believed that the initial gross oil-in-place range for the Shaikan discovery was a conservative estimate that would increase as more information became available,” said John Gerstenlauer, Gulf Keystone’s COO. “This gross oil-in-place volumes revision by DGA, entirely supported by the Company's management and Board of Directors, confirms that belief. We eagerly look forward to additional drilling results from Shaikan-2, the soon to be spudded Shaikan-4 and the remainder of the Shaikan appraisal drilling program. We firmly believe that even with this upward revision the numbers for the Shaikan discovery are still conservative."

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