8th Jan 2007 07:01
Gulf Keystone Petroleum Ld08 January 2007 08 January 2007 GULF KEYSTONE PETROLEUM LTD ("Gulf Keystone" or the "Company") FORMAL APPROVAL OF HBH AND BEN GUECHA CONTRACTS UPDATE ON GKN / GKS FIELD DEVELOPMENT Hassi Ba Hamou (HBH) Following approval by the Algerian Council of Ministers, the introduction of BGGroup into the HBH Contract has been formally ratified by an announcement in theOfficial Journal of Algeria. This is the final stage of the approval processrelating to the transaction between Gulf Keystone and BG, announced in August2006, and paves the way for immediate completion of the transaction with BG. Oncompletion, BG will acquire a 36.75% interest in the HBH Concession, with GulfKeystone retaining a 38.25% interest. SONATRACH will continue to hold a 25%interest. Blocks 108 and 128a The Council of Ministers has, in addition, given its approval to the award ofthe contract covering the Ben Guecha Blocks (108 and 128a) which Gulf Keystonesigned in April 2005, and this approval has also now formally been announced inthe Official Journal of Algeria. This announcement formally marks commencementof the first three year period of this exploration contract and enables GulfKeystone immediately to start its exploration and appraisal activities on theseblocks. The remaining work commitment covering the Ben Guecha blocks include thedrilling of one appraisal well on the Ras Toumb field, in which Gulf Keystoneacquired an interest under the 108/128a contract, and the drilling of oneexploration well. Block 126 SONATRACH and Gulf Keystone have, following extensive discussions, now reachedfinal agreement on all aspects of the field development plans for the GKS andGKN oil fields, including detailed plans for gas utilisation. The developmentproposal is therefore now with the SONATRACH Executive Committee for its finalapproval, which is a critical step leading up to the award of a productionlicence covering the development of both fields. On Gazetting of the productionlicence, the Company and SONATRACH will be able to commence phased developmentoperations on both fields and will assume immediate ownership of ongoing oilproduction from well GKN-1. In addition, SONATRACH has signed an amendment to Gulf Keystone's ProductionSharing Contract for Block 126a, which confirms the extension of this contractfor a period of 15 months with effect from 29 April 2006. This extension willenable Gulf Keystone to proceed with the testing of the GRJ-2 discovery. This ispresently scheduled for early in the second quarter of 2007 utilising Saipem Rig32. Update on Operations Hassi Ba Hamou On the HBH Concession, work has already commenced on an extensive seismicacquisition programme. The contractor, Global Geophysical, is currentlysurveying the control points for the acquisition of the 2000km 2D survey andwork will continue over the next 10 months. The acquisition of the 500 km(2) 3Dsurvey, originally planned to follow after the 2D programme, has beenaccelerated to run in parallel with the 2D survey to enable drilling to start asearly as possible. Gulf Keystone is currently evaluating tenders from fivedrilling contractors for a programme of three appraisal and three explorationwells on the block which the Company expects to commence in the fourth quarterof 2007, following interpretation of the seismic data. Block 129 On Block 129, the environmental impact assessment has been completed. With ourpartner, SONATRACH, we have finalised a work programme and budget for 2007. Theexpected work programme includes (but is not limited to) the testing of one ofthe two discovery wells Hassi El Kerma 1 and Hassi El Kerma 3, the acquisitionof additional 2D seismic and the processing of 412km(2) of 3D seismic acquiredover the DDN discovery. Blocks 108 / 128a On Block 108, Gulf Keystone has completed the processing and preliminaryinterpretation of 156 km(2) of 3D seismic acquired over the producing RasToumbfield. The inventory of potential prospects is now under detailed review. Mr. Bill Guest, President of Gulf Keystone commented: "Formal ratification of Gulf Keystone's agreement with BG Group, and of thecontracts covering Blocks 108 and 128a, represent important milestones in thefurther development of the Company's Algerian exploration and productionbusiness. These, together with the useful progress made towards the award of a productionlicence over GKN and GKS, place the Company on a strong financial andoperational footing going into 2007" Enquiries Gulf Keystone Petroleum: 020 7514 1400Todd Kozel, CEOBill Guest, President Citigate Dewe Rogerson: 020 7638 9571Media enquiries: Martin Jackson / George Cazenove Analyst enquiries: Kate Delahunty / Nina Soonor visit: www.gulfkeystone.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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