Gulf Keystone Petroleum Announces Another Oil Discovery

LONDON -- 2013 will indeed be a busy year for Gulf Keystone Petroleum  (LSE: GKP  ) . While most of the action is taking place on its Shaikan block, work continues elsewhere in Kuridistan, too.

Good news
This morning, Gulf Keystone announced it had made a second discovery on the Akri-Bijeel Block, in which it has a 20% interest. The Bakrman-1 well has produced 2,616 barrels of light oil per day, and 5.86 million cubic feet of gas. Testing is ongoing, and is expected to be completed in April.

This discovery was made 32km north west of the first discovery in this area, Bijell-1, which was made in 2010. Bijell-1 will be the subject of an extended well test, with first production expected in May.

Bad news
However, drilling to appraise the immediate area around Bijell-1 is not going quite as well. Gulf Keystone also said today that Bijell-3 is to be plugged and abandoned, as no commercial flows were found after a series of seven tests. The company is continuing with its appraisal program of this prospect, though. Bijell-7 spudded in December, and four further appraisal wells are planned this year.

Another nearby well, Gulak-1, is to be suspended after minor inflows of hydrocarbons were found in a series of five tests.

Back to the main game
Gulf Keystone also provided an update on its development plans for Shaikan today. The first production facility is nearing completion. It will be tied to three wells, and is designed to produce 20,000 barrels a day.

In a few months' time, a second production facility, with the same capacity, will be tied to two more wells, and one that is about to be drilled.

The mixed bag of news saw Gulf Keystone's shares jump a little in early trading, but then pare their gains to 2% by around 9am.

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