Gulf Keystone funds Iraq Kurdistan program

By OGJ editors
HOUSTON, May 25 -- Gulf Keystone Petroleum Ltd., Hamilton, Bermuda, raised $165 million to fund its remaining 2010 and early 2011 work programs in Iraqi Kurdistan.

The company will use the funds for an extended well test at its Shaikan multipay oil and gas discovery, drill three appraisal wells near Shaikan, drill the Sheikh Adi exploration well, and shoot more 3D seismic on the Shaikan and Sheikh Adi licenses.

A workover rig is expected to arrive in early June for short-term production tests of Jurassic pay zones tapped during drillstem test intervals 2 and 3 at Shaikan on electric submersible pump. Those intervals made 17-19° gravity oil with small amounts of associated gas at 1,627-67 m and 1,703-1,814 m.

Immediately thereafter Gulf Keystone will begin the extended well test of drillstem test zone 1 in Upper Jurassic at 1,450-1,510 m, which data analysis indicates to be capable of flowing at rates of 8,000-10,000 b/d of 22° gravity oil. Equipment for a temporary production facility is enroute from Canada, and the test is to start in August 2010. Oil will be trucked 146 km to Erbil.

The Shaikan discovery well also flowed 2,000 b/d of 40° gravity oil and 2 MMscfd of associated gas from Upper Triassic Kurrachine at 2,402-83 m. If not for surface and downhole restrictions, it could have flowed at 14,000 b/d, Gulf Keystone said. Kurrachine also flowed 6,000 b/d of 53-55° gravity oil and 21 MMscfd of associated gas at 2,582-2,849 m.

The first Shaikan appraisal well, 9 km east of the discovery well, is projected to 4,500-5,000 m to evaluate Cretaceous, Jurassic, Triassic, and Permian formations. The second appraisal well will reach Upper Triassic with the option to go to the Permian. The third well will target the shallow Cretaceous.

The Sheikh Adi-1 exploration well, projected to Upper Permian on the Gulf Keystone-operated block northwest of Shaikan, is expected to spud in the third quarter of 2010.

The Bijeel-1 exploratory well to the east on the Akri Bijeel block operated by MOL Hungarian Oil and Gas PLC is nearing final depth. That well tested as much as 3,200 b/d of 18° gravity oil and 933 Mscfd of associated gas from Upper Jurassic at 3,831 m (OGJ Online, Mar. 9, 2010). Gulf Keystone has 20% interest in Akri Bijeel.