Shaikan & Akri-Bijeel PSCs: Third Party Option (2593V)

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RNS Number : 2593V

Gulf Keystone Petroleum Ltd.

10 January 2012

Not for release, publication or distribution in or into the United States or jurisdictions other than the United Kingdom and Bermuda where to do so would constitute a contravention of the relevant laws of such jurisdiction.

10 January 2012

Gulf Keystone Petroleum Ltd. (AIM: GKP)

("Gulf Keystone" or "the Company")

Shaikan and Akri-Bijeel Production Sharing Contracts: Option of Third Party Participation

Gulf Keystone confirms that it has been agreed that pursuant to the provisions of the Production Sharing Contract regarding the Shaikan block as amended and the Production Sharing Contract regarding the Akri-Bijeel block as amended, the Third Party Assignment Options held by the Kurdistan Regional Government of Iraq under the terms of Article 4 of the respective Production Sharing Contracts remain valid and exercisable.

After the Government of the Kurdistan Region of Iraq has exercised its Third Party Assignment Option in the Shaikan and Akri-Bijeel Production Sharing Contracts ("PSCs"), the respective PSCs will be further amended and Gulf Keystone will issue an appropriate announcement.

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. Texas Keystone, Inc. holds its 5 per cent interest in trust for Gulf Keystone pending the transfer of its interest to the Company. Shaikan is a major discovery with independently audited gross oil-in-place volumes of between 8 billion barrels to 13.4 billion barrels calculated on the P90 to P10 basis with a mean value of 10.5 billion barrels.

Gulf Keystone has a 20 per cent working interest in the Akri-Bijeel block operated by Kalegran Ltd., a 100 per cent subsidiary of MOL Hungarian Oil and Gas Plc., which holds 80 per cent working interest in the block. Operator's P50 resource estimate for the Akri-Bijeel block is 2.4 billion barrels of oil-in-place.

The Kurdistan Regional Government ("KRG") is a party to the four PSCs signed by Gulf Keystone in relation to its assets in the Kurdistan Region of Iraq. According to the PSCs regarding the Shaikan block and the Akri-Bijeel block, the KRG has a right to exercise the Third Party Assignment Option, i.e. to nominate a Third Party Participant and assign the Third Party Interest. In addition, the KRG has back-in-rights in both the Shaikan block and the Akri-Bijeel block. Should the KRG exercise these rights in full, it is anticipated that the Company's interest in the Shaikan and the Akri-Bijeel blocks will be 51 per cent and 12.8 per cent respectively.

Pursuant to the provisions of the respective PSCs, the Company's past costs in relation to the Third Party Interest will be reimbursed to Gulf Keystone by the nominated Third Party Participant.

Enquiries:

 
 Gulf Keystone Petroleum:            [phone] 
 Todd Kozel, Executive Chairman 
  and 
  Chief Executive Officer 
 Ewen Ainsworth, Finance Director 
 
 Strand Hanson Limited               [phone] 
 Simon Raggett / Rory Murphy / 
  James Harris 
 
 Mirabaud Securities LLP             [phone] 
 Peter Krens 
 
 Pelham Bell Pottinger               [phone] 
 Mark Antelme 
 

or visit: www.gulfkeystone.com

Notes to Editors:

-- Gulf Keystone Petroleum Ltd. (AIM: GKP) is an independent oil and gas exploration and production company focused on exploration in the Kurdistan Region of Iraq.

-- Gulf Keystone Petroleum International Limited holds Production Sharing Contracts for fourexploration blocks in Kurdistan.

-- The Company's shares have traded on the AIM market of the London Stock Exchange since listing on 8(th) September 2004.

-- Gulf Keystone Petroleum Limited is registered in Hamilton, Bermuda with further offices in Erbil, Kurdistan (Iraq), Algiers, Algeria and London, UK.

-- Gross oil-in-place (or petroleum-initially-in-place) is that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The range of uncertainty of the oil-in-place (petroleum-initially-in-place) volumes is represented by a probability distribution with a low, mid and high provided: P90 represents at least a 90% probability (high) that the quantities determined to be in place will equal or exceed the low estimate; P50 represents at least a 50% probability (mid) that the quantities determined to be in place will equal or exceed the mid estimate; and P10 represents at least a 10% probability (low) that the quantities determined to be in place will equal or exceed the high estimate.

Not for release, publication or distribution, directly or indirectly, in or into the United States or jurisdictions other than the United Kingdom and Bermuda where to do so would constitute a contravention of the relevant laws of such jurisdiction. This document (and the information contained herein) does not contain or constitute an offer of securities for sale, or solicitation of an offer to purchase securities, in the United States or jurisdictions other than the United Kingdom and Bermuda where to do so would constitute a contravention of the relevant laws of such jurisdiction. The securities referred to herein have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States unless the securities are registered under the Securities Act, or an exemption from the registration requirements of the Securities Act is available. No public offering of the securities will be made in the United States.

This information is provided by RNS

The company news service from the London Stock Exchange

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