13th Mar 2014 10:22
LONDON (Alliance News) - Gulf Keystone Petroleum Ltd saw its shares slide Thursday after a new report on its Kurdistan reserves and contingent resources indicated a baseline of 12.5 billion barrels of oil in place, at the lower end of previous estimates.
Previous estimates put Shaikan?s oil in place between 12.4 billion and 15 billion barrels.
The oil and gas company said a new Competent Persons Report also showed 1.2 billion barrels of oil in combined gross 2P and 2C recoverable reserves and resources across the company's portfolio in the Kurdistan Region of Iraq, comprising its Shaikan, Sheikh Adi, Ber Bahr and Akri-Bijeel blocks.
Gulf Keystone said most of the reserves and resources are in the Jurassic formation on site, and 299 million barrels of gross 2P oil reserves in the Jurassic have been assigned.
The company said the baseline figure will be used to measure future progress and the overall report represents a conservative estimate based solely on reserves which are being targeted with 26 wells, representing less than 25% of all wells currently envisaged on the Shaikan development.
Gulf Keystone said the report does not take into account undrilled and untested horizons and the company sees a clear upside for its reserves and resources.
Still, Gulf Keystone shares were down 16.7% to 121.00 pence putting it in the top five AIM fallers in early trading Thursday.
The company added in a separate operational statement that it continues to maintain stable production and sales levels of roughly 10,000 barrels of oil per day from the company's first Shaikan production facility, which is expected to increase in the second quarter.
Gulf Keystone added that the second Shaikan production facility is being commissioned, with two wells already tied in. First production expected in the second quarter.
The company said with these developments it remains positive about achieving its target of 40,000 barrels of oil per day production capacity from both PF-1 and PF-2 in 2014.
Gulf Keystone added that in order to move on to the next stage of the Shaikan project, it is making progress in discussions on near-term debt financing options.
The company announced in February that its delayed move to the London Main Market from AIM, which it hoped would take place by the end of 2013, will take place on or after March 24.
By Tom McIvor; [email protected]; @TomMcIvor1
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