Gulf Keystone Petroleum Drilling New Shaikan Well


LONDON -- Gulf Keystone saw its shares dip slightly today, down 2.5 pence to 149.5 pence, despite revealing plans to drill a new exploration well, to be called Shaikan-7.

The new well, which spudded at the weekend, is the first deep exploration well to be drilled at the company's huge Shaikan discovery in Kurdistan, and is one kilometer east of the original discovery well.

Gulf Keystone said the well will "evaluate the potential for significant quantities of light oil and identify commerciality of the deeper Triassic reservoir. The well is then expected to penetrate the Permian, the deepest undrilled horizon to date on the Shaikan structure."

The total depth of the well is expected to be 4,500 meters, and it could take about nine months to complete.

John Gerstenlauer, chief operating officer of Gulf Keystone, said "with Shaikan-7, we hope to confirm our expectations of major reservoirs beneath the deepest horizon drilled to date, and add to what is already recognized as one of the world's largest onshore conventional oil & gas developments".

2013 is certainly turning out to be busy year for Gulf Keystone, at the drillbit, in the boardroom and even in the courts. The company is currently searching for a new non-executive Chairman, and is also looking to move from AIM to the Official List of the London Stock Exchange.

Gulf Keystone is also embroiled in a court battle with Excalibur Ventures, concerning the ownership of a sizable stake in its Kurdistan licenses. The judge in the case is expected to announce his verdict anytime now.

On the operational front, Gulf Keystone is targeting production of 40,000 barrels a day by the end of this year, and then ramping up to a long-term target of 400,000 barrels, although much of the detail behind its plans is yet to be announced.

Tomorrow, June 20, is also a key day for the company, as it sees the release of its long-awaited full-year results for 2012.

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