Gulf Keystone makes further discovery in Kurdistan

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After sliding the last couple of days on general market weakness and whilst the court case against Excalibur Ventures drags on, Gulf Keystone announced some further good news today from its drilling programme causing a 4% rebound to 190p. 

The company notified the Sheikh Adi Block Management Committee of a discovery made on the Sheikh Adi Block with effect from 7 November 2012, following the completion of a well testing programme of the Sheikh Adi-2 exploration well on the block, located immediately to the west of the Company’s Shaikan Block.

Sheikh Adi-2 spudded in May 2012, 1.45 km to the north of the Sheikh Adi-1 exploration well, and was drilled to a total depth of 2,754 metres in September 2012. In the course of the Sheikh Adi-2 well testing programme the Company has successfully tested four reservoir zones at measured depths of between 1,420 metres and 1,700 metres, achieving total stabilised aggregate flow rates of 4,235 barrels of oil per day across the Upper Butmah, Adaiyah, Mus and Sargelu formations in the Jurassic. Provisional results indicate the oil gravity is similar to that found in the same formations in the Shaikan Block namely 15-18 API.

With confirmed P90 oil in place for Shaikan of 12.4 billion barrels, this further discovery at Sheikh Adi further increases the signficant potential for Gulf Keystone to be a major producer in the region, particularly when the Turkish pipeline becomes fully operational allowing major exports to start. The first phase of pipeline construction is supposed to be completed by November this year and the second phase is due to be finished by August 2013.

In addition the Iraq Oil report ( reported today that Turkey may be preparing to enter the Kurdistan region which would significantly derisk the area politically.

“A new Turkish state oil and gas company is negotiating with Iraq’s semi-autonomous Kurdistan region to take stakes in several exploration blocks – a development that would signal dramatic headway for the Kurds in their quest for oil sector autonomy.

No contracts have been signed, but four officials familiar with the talks confirmed that negotiations have reached an advanced stage.

The new Turkish company is looking to enter at least five Kurdish exploration blocks, according to the officials, and the negotiations include some of the blocks being developed by ExxonMobil. “

Plenty more news to come with shareholders waiting for the results from the Akri bejeel drill which could be a major addition to the Gulf Keystone’s resources.

Contrarian Investor UK

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