Gulf Keystone Petroleum (GKP) has reported significant initial oil flow on its Shaikan-2 Appraisal Well, sending the share price rocketing. Definitive reports on the flow rate are expected within 72 hours.

GKP’s share price had fallen significantly in recent weeks on the back of the political unrest in the Middle East and a continued lack of a resolution between the KRG and the Iraqi Government regarding the deals the Kurds had made with foreign oil companies, but this news has provided a welcome boost.

The Shaikan prospect itself is estimated to have a mean of 4.2 billion barrels of oil in place, and be worth as much as 266p a share alone.

RNS:

Gulf Keystone today reports a significant initial oil flow on the Shaikan-2 Appraisal Well in a 44 meter interval (1,792m to 1,836m) in the Jurassic age formation.

Substantial smoke and/ or the oil flare is/ are visible from the Company’s office in Erbil some considerable distance from the Shaikan-2 location, indicating that a significant flow has been encountered and prompting the Company to issue this announcement.

The Company is currently conducting a test, which is expected to continue for another 72 hours to obtain further results, i.e. flow rate, oil quality and similar information, which will be reported in the next announcement.

Shaikan-2 is the first deep appraisal well to be drilled on the Shaikan structure. The well is drilling approximately nine kilometres to the south-east of the Shaikan-1 discovery well.

The Company has a 75 percent working interest in the Shaikan block and is partnered with the MOL subsidiary, Kalegran Ltd., and Texas Keystone Inc. which have the remaining 20 and 5 percent working interests respectively.

Todd F. Kozel, Gulf Keystone’s Executive Chairman and Chief Executive Officer commented:

“This initial oil flow continues to confirm our belief in the world class nature of the Shaikan discovery. We are eagerly anticipating more detailed results from the Shaikan-2 well test.”