Bermuda Oil Firm’s Operational Update

October 31, 2011

In an operational update on its drilling programme in Iraqi Kurdistan, Bermuda’s Gulf Keystone announced today [Oct.21] that the Shaikan-5 appraisal well has spudded on the Shaikan block.

Shaikan-5 is the third deep appraisal well to be drilled on the company’s major oil discovery with independently audited gross oil-in-place volumes of between 4.9 billion barrels and 10.8 billion barrels.

Shaikan-5 is being drilled six km to the north-east of the Shaikan-2 appraisal well. The well will target prospective intervals in the Jurassic and Triassic to reach the planned total depth of approximately 3,500 metres.

Gulf Keystone is the operator of the Shaikan block with a working interest of 75 per cent and is partnered with Kalegran Ltd. — a 100 per cent subsidiary of MOL Hungarian Oil and Gas Plc. — and Texas Keystone Inc., which have working interests of 20 per cent and 5 per cent respectively.

Gulf Keystone was originally founded by UAE, Kuwaiti, Saudi and US private equity. The company was incorporated in Bermuda in 2001 and listed on the Alternative Investment Market of the London Stock Exchange on 8 September 2004.

John Gerstenlauer, Gulf Keystone’s Chief Operating Officer commented: “We are very pleased with the progress of our drilling operations in the Kurdistan Region of Iraq. Shaikan-5 is the ninth well to be drilled across the company’s four adjacent blocks in the space of 30 months. Six out of these nine wells have been drilled on the Shaikan and Sheikh Adi blocks which Gulf Keystone operates.

“With two discoveries on the Shaikan and Akri-Bijeel blocks under our belt, we eagerly anticipate further results from the Sheikh Adi block with estimated resources of one to three billion barrels of gross oil-in-place.

“The second exploration well on the Sheikh Adi block will spud in early 2012, when results are also expected from the first exploration well recently spudded on the Ber Bahr block. The spudding of the Shaikan-5 well is in line with Gulf Keystone’s stated strategy to realise the full potential of the giant Shaikan field, to prove up our existing discoveries and to drill new ones in the Kurdistan Region of Iraq”.

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