Gulf Keystone Announce Successful Test of HBH-6 Well, Algeria and Operations Update

Source: www.gulfoilandgas.com 1/14/2009, Location: Africa

Gulf Keystone Petroleum Ltd, an independent oil and gas exploration company, is pleased to announce that drilling and testing of the HBH-6 appraisal well on the Hassi Ba Hamou Permit ("HBH Permit") in Algeria has been completed and to provide an update on operations.

Hassi Ba Hamou
The HBH-6 appraisal well, which was spudded on 25 November 2008, reached a total depth of 930 meters penetrating the Devonian age gas reservoir. During a 48-hour production test a stabilized flow rate of 15,345 cubic meters per hour (12.97 mmscfg per day) was achieved through a 144/64-inch choke. The HBH-6 well is the sixth and final well on the HBH Permit during the first prospecting period and completes the work commitments during this phase.

The drilling rig will now move to drill well RM-2 which will be the first well on the HBH Permit to be drilled during the second prospecting period. This well is expected to spud within a month. No further announcement on the RM-2 well is planned until the well has been completed.

The HBH Permit, which contains the HBH gas field and RM-1 discovery, was awarded in April 2005. It comprises five blocks within an area of 18,380 square kilometers in the Bechar Basin in Algeria's Western Desert.

GKN and GKS Field
As previously announced the GKN-1 well was shut-in in early June 2008 in order to facilitate maintenance, repair and a spur line extension to the oil transportation line, workover of the GKN-1 well, and upgrade of the facilities to handle expected increased production when the GKS-2 well is brought onstream.

Currently this work is pending agreement with Sonatrach (Algeria's National Oil Company) and approval from the authorities in Algeria to recommence oil production.

During the second half of 2008 Sonatrach entered into a one-year evergreen agreement to purchase Gulf Keystone's share of production from the GKN and GKS fields (60% interest). This agreement covered production from 10 October 2007. The first payment covering production to 10 April 2008 was received in early January 2009 being settled in accordance with a formula reflecting the prevailing price for the month of November 2008. A further payment covering production between 11 April and early June 2008 is expected in February 2009 and will reflect the prevailing price for the month of January 2009.

In the interim results for the six months ended 30 June 2008, issued on 25 September 2008, the Company recognized revenues of $4.3 million in connection with this contract. The subsequent agreement with Sonatrach has resulted in a lower oil price being obtained for much of this supply due to falling world oil prices. As a consequence, the revenue reported will need to be restated at a number reflecting the prevailing November and January prices when known.

The GKN and GKS field are located in North Algeria, South East Constantine Basin.

Mr. Todd Kozel, Executive Chairman, Gulf Keystone, commented:
"We are delighted with the result of the HBH-6 appraisal well on the HBH Permit, Algeria. This is the fourth successful well from our now completed six well drilling programme, which included the RM-1 discovery to the southeast of the HBH gas field. The success of this drilling programme justifies our decision to proceed to the second prospecting period early, and underlines the high prospectivity of the HBH Permit.


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Related Categories: Artificial Lift  Cementing, Stimulation  Directional Drilling  Drilling  Drilling Engineering & Equipment Systems  Enhanced Oil Recovery  General  Logging, Perforating, Testing  Offshore Drilling  Reservoir/Completion Consultants  Workover & Well Services  Workover Rigs/Services 

Related Articles: Artificial Lift  Cementing, Stimulation  Directional Drilling  Drilling  Drilling Engineering & Equipment Systems  Enhanced Oil Recovery  General  Logging, Perforating, Testing  Offshore Drilling  Reservoir/Completion Consultants  Workover & Well Services  Workover Rigs/Services 


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