Operational & Corporate Update

11 June 2021

Gulf Keystone Petroleum Ltd. (LSE: GKP)

("Gulf Keystone", "GKP" or "the Company")

Operational & Corporate Update

Recommenced drilling activities ahead of schedule with the restart of SH-13 completion

Expect 2021 gross production to be towards upper end of guidance range

Gulf Keystone, a leading independent operator and producer in the Kurdistan Region of Iraq, today provides an operational and corporate update.

Jon Harris, Gulf Keystone's Chief Executive Officer, said:

"We continue to safely navigate a challenging operating environment due to COVID-19, with gross average year-to-date production of c.43,600 bopd, up almost 20% from 2020 annual average gross production. Today, we are pleased to announce that we have restarted work to complete SH-13, marking the resumption of drilling activities ahead of schedule. As a result, we now expect to increase gross production towards 55,000 bopd in Q4 2021 and to be at the upper end of 2021 guidance (40,000-44,000 bopd) as we continue to develop and realise the value of the Shaikan Field's substantial reserves and resources for the benefit of all stakeholders."

55,000 bopd investment programme

· Successful restart of drilling activities, with commencement of SH-13 completion ahead of the previously announced schedule of Q3 2021.

· After SH-13, SH-I will be drilled and electric submersible pumps will be installed in two existing wells.

· Gross production is now expected to increase towards 55,000 bopd in Q4 2021, versus previous guidance of Q1 2022.

Operational

· Continued strong safety performance, with no Lost Time Incident ("LTI") recorded for over 530 days.

· Continuing to effectively manage the impact of COVID-19 on production operations and the resumption of drilling activities despite continued challenges on the ground.  

· Gross average production from the field in 2021 to date of c.43,600 bopd, in line with 2021 guidance.

Financial

· $100.8 million ($78.9 million net to GKP) received from the Kurdistan Regional Government in 2021 to date for payments of crude oil sales and recovery of outstanding arrears. 

· As previously announced, proposing a $25 million annual dividend and $25 million special dividend, both for approval at next week's Annual General Meeting as we continue to balance investment in growth and returns to shareholders.

· Retain a robust balance sheet, with a cash balance of $195 million as at 10 June 2021.

Outlook

· Expect 2021 average gross production guidance to be towards the upper end of the 40,000 to 44,000 bopd guidance range following early resumption of drilling activities.

· 2021 guidance of $55-$65 million net capex and $2.5 to $2.9/bbl gross unit Opex remains unchanged.

· Continuing to progress the preparation of the Field Development Plan, including the Gas Management Plan, through engagement with the Ministry of Natural Resources and other stakeholders; we will provide updates as this work progresses.

This announcement contains inside information for the purposes of the UK Market Abuse Regime.

Enquiries:

or visit: www.gulfkeystone.com

Notes to Editors:

Gulf Keystone Petroleum Ltd. (LSE: GKP) is a leading independent operator and producer in the Kurdistan Region of Iraq. Further information on Gulf Keystone is available on its website www.gulfkeystone.com

Disclaimer

This announcement contains certain forward-looking statements that are subject to the risks and uncertainties associated with the oil & gas exploration and production business.  These statements are made by the Company and its Directors in good faith based on the information available to them up to the time of their approval of this announcement but such statements should be treated with caution due to inherent risks and uncertainties, including both economic and business factors and/or factors beyond the Company's control or within the Company's control where, for example, the Company decides on a change of plan or strategy.  This announcement has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed.  This announcement should not be relied on by any other party or for any other purpose.

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