Company Overview

Gulf Keystone Petroleum Limited is an independent exploration and production company, quoted on the Main Market of the London Stock Exchange plc. (LSE:GKP). The Company is a leading operator in the Kurdistan Region of Iraq, where it holds a balanced portfolio of exploration, development and production assets with five discoveries across four on-trend blocks: Shaikan, Sheikh Adi, Akri-Bijeel and Ber Bahr.
As one of the first companies to see the potential of the region, over the last six years Gulf Keystone has drilled or participated in over 20 wells and remains one of the most active operators in the Kurdistan Region of Iraq.
With the Shaikan discovery alone, declared commercial in 2012, Gulf Keystone has one of the largest onshore developments in the world today and the Company is moving into a phase of significant production.
We believe that we have only scratched the surface of the true value of our blocks and our ongoing exploration and appraisal activity is expected to result in further upside.

Shaikan: Increasing production

Following the completion of the Shaikan five-well appraisal programme and subsequent Declaration of Commercial Discovery in August 2012, the Shaikan Field Development Plan was approved in June 2013. The Company has now commenced commercial production and crude oil exports, with both facilities, PF-1 and -2, producing, and plans to increase production capacity to 40,000 gross barrels of oil per day (“bopd”) by year-end 2014.

Look out for Sheikh Adi

In November 2012, Gulf Keystone made a new discovery following a successful well testing programme of the second exploration well on the Sheikh Adi block, located immediately to the west of the Shaikan Block and also operated by the Company. Sheikh Adi-3, the first well to appraise the Sheikh Adi discovery, spudded in December 2013 with the aim of evaluating potential connection between the Shaikan and Sheikh Adi fields.

Further exploration, appraisal and development

A Field Development Plan has been agreed for the Akri-Bijeel block, based on the two discovery areas Bijell, where a significant discovery was made in 2010 and Bakrman, where a further discovery made in early 2013.
In May 2013 a commercial discovery was announced at Ber Bahr. A 3D seismic survey is now underway and the Ber Bahr-2 appraisal well is planned for Q4 2014. To date, over 20 wells have been drilled or are being drilled across Gulf Keystone’s four adjacent blocks Iraq in order to realise multi-billion barrel resource potential.

Funding in place

In October 2012, Gulf Keystone was successful in its first bid to raise funds via a placement of senior unsecured convertible bonds due October 2017 for an amount of $275 million. In November 2013, a further US$50 million was raised through a tap issue of these convertible bonds, confirming investor interest in the Company’s evolving story. On 17 April 2014, Gulf Keystone closed on a US$250 million debt financing that will fully fund the Company and its development plan into 2015 and the Company’s increasing production is providing revenue with payment of US$6.46 million for the first Shaikan crude oil export sales received in May 2014.

Kurdistan Region of Iraq

Our early belief in the Kurdistan success story has been confirmed with an impressive number of oil companies, including oil majors, entering this region. Today Kurdistan remains one of the most attractive upstream destinations in the world.

There is no doubt that Gulf Keystone’s consistent drilling achievements in the Kurdistan Region of Iraq has significantly de-risked further exploration drilling in the region. Moreover, the clear vision of regional authorities with regard to development of the energy sector cannot be underestimated.

Today Gulf Keystone is moving into a phase of significant production, with the capacity to produce up to 40,000 barrels of oil per day from Shaikan in the coming months with a medium-term target of 100,000 bopd. The Company will be a key contributor in meeting the Kurdistan Regional Government’s oil production targets.

Kurdistan Region of Iraq

Gulf Keystone is focused on exploration, appraisal and production in the Kurdistan Region of Iraq where a world-class discovery was first made on the Company’s Shaikan block in 2009. The Company is currently entering a new stage of its development as it matures from a proven oil explorer to a significant producer in the Kurdistan Region of Iraq.

Ber Bahr
Sheikh Adi

The Company’s strategic operational priorities are:
Increase the Shaikan production facilities output to 40,000 barrels of oil per day (“bopd”) to ramp up export and domestic sales and generate steady revenues.
Following the approval of the Shaikan Field Development Plan, prepare to move to the large-scale staged development through an initial target of 100,000 bopd.
Focus on assessing remaining significant exploration upside in the Shaikan field.
Appraise and/or move into early development of exploration successes on Sheikh Adi, Ber Bahr and Akri-Bijeel (Bijell and Bakrman discoveries).

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