London-listed Bermudan independent Gulf Keystone has hiked its P90 reserves at the heavy oil Shaikan field in Iraqi Kurdistan by 50% to a huge 12.4 billion barrels.
The news follows the final bout of appraisal drilling by Gulf Keystone at Shaikan, and comes ahead of the company’s AGM in Paris later today.
“The revised gross oil-in-place volumes for the Shaikan field, as calculated by Dynamic Global Advisors (DGA), independent, Houston-based exploration consultants, are a P90 value of 12.4 billion barrels to a P10 value of 15 billion barrels of oil-in-place, with a mean value of 13.7 billion barrels,” Gulf Keystone said in a statement to investors.
“This very significant upgrade of the Shaikan resources estimates revises the previously announced range of 8.0 to 13.4 billion barrels of gross oil-in-place with a mean value of 10.5 billion barrels.”
DGA’s updated estimates also indicate an increase in the mean value of Shaikan’s associated gross gas-in-place volumes from 3.5 trillion cubic feet to 4.9 trillion cubic feet.
Gulf Keystone is now taking its results to the Kurdish Regional Government to declare Shaikan commercial.
Like other oil companies in Kurdistan, Gulf Keystone’s chief commercial concern will be finding an ample and secure route to market for their oil. After an export shut-in by the Kurdish regional government over an ongoing dispute with Baghdad, a pipeline for the export of Kurdish oil directly to Turkey is under way.
“Sometimes people get complacent about our operational track record,” said John Gerstenlauer, Gulf Keystone’s COO. “This latest upgrade, which now includes results from the Shaikan discovery well and five appraisal wells, is a timely reminder about Gulf Keystone’s stellar drilling performance in the Kurdistan Region of Iraq.”
The company’s shares are some of the most popular on London’s junior AIM market, as a result of large discoveries and takeover speculation.
Some private shareholders have raised concerns over executive pay and director appointments at the company, after fevered hopes of a sale to US supermajor ExxonMobil at a massive premium to the company’s share price earlier this year proved to be unfounded. CEO Todd Kozel was paid $20.71 million in 2011, more than any supermajor CEO bar Exxon’s Rex TIllerson.
Gerstenlauer did not appear completely committed to quashing the rumours that the company is a takeover candidate. “As exploration and development activities in the region continue to go from strength to strength, more and bigger players are beginning to see the potential of the region, and Shaikan undoubtedly remains the jewel in the crown,” he said.
