Oil and gas explorer Gulf Keystone Petroleum has said that the recently constructed production test facilities near the location of the Shaikan-1 discovery well in the Shaikan Block (75% GKP working interest) in the Kurdistan region of Iraq are being commissioned.

Initial flow rates are low to allow facility commissioning and will be kept low, pending receipt of oil assay results, which will assist in determining a domestic sales price and allow finalization of the oil sales contracts.

Facility commissioning, assay finalization and sales contract negotiation are expected to take several weeks.

Test operations are well on track to reach the target production rate of 8,000 to 10,000 barrels of oil per day (bopd).

Testing and evaluation are continuing on the MOL operated Bijeel-1 well in the Akri-Bijeel Block (20% GKP working interest).

Additional testing and evaluation work are still ongoing.

However, the initial indication of the oil-water contact in this well is supportive of the concept of a single regional aquifer and this further supports the upside oil volume scenario for all four blocks in which GKP has an interest.

In addition, it appears that the Bijeel structure could be a southern extension of the much larger Bekhme structure.

The Bekhme exploration well is planned for late 2010 or early 2011.

On Sheikh Adi-1, following the sticking of the bottom hole assembly at a depth of 450m and the necessary sidetrack to drill around the obstruction, the well is now at 500m, which is the 20" casing point.

On the shallow Shaikan-3 appraisal well, near the site of Shaikan-1, the well is drilling ahead at 837m with the next casing point expected at 900m and the first zones of interest expected to be encountered soon after that.