GULF KEYSTONE HAS announced the results of a preliminary evaluation of the Shaikan-1 discovery located in northern Iraq. Given the materiality of the discovery,the Company felt it prudent to seek independent evaluation of the Shaikan-1 well, despite being at an early stage of evaluation and testing. Accordingly,
Shaikan-1 has been independently evaluated by Dynamic Global Advisors ("DGA"), an independently-owned E&P consultancy, providing advice and services to national, institutional, and corporate clients worldwide.
This preliminary evaluation report reviews the data from the Jurassic formations of Shaikan-1 tested to a depth of 2,055 meters and was carried out in accordance with the Petroleum Resources Management System ("PRMS") guidelines, using SPE definitions. Key findings The Shaikan-1 well has discovered a significant resource of low gravity oil in the Jurassic Barsarin, Sargelu, Alan, Mus and Butmah formations. The range of oil in-place for the Shaikan structure is estimated to be a gross 1.0 to 5.3 billion barrels of oil, with a mean of 2.8 billion barrels of oil.
As additional data below 2,055 meters is evaluated, the resource estimates will increase. The figures provided are discovered oil inplace for the Shaikan structure. Given the preliminary nature of the report, and with Shaikan-1 still an active exploration well, DGA were not asked to provide analysis of recovery factors. The necessary data for the company to evaluate meaningful recovery factors will be gathered during the extended well test, scheduled to commence in late 2009, after Shaikan-1 reaches target depth.
The Company continues to drill to a target depth of 3,200 to 3,500 meters. Todd Kozel, Executive Chairman of Gulf Keystone, commented, "The DGA report confirms independently, the transformational nature of this outstanding discovery. “We look forward to the next iteration of DGA's report which will address the Triassic discoveries made below 2,055 meters."