February 18, 2021 | oil and gas

GKP issues Update on Shaikan Field


Gulf Keystone Petroleum (GKP) has provided a Competent Person's Report ('CPR') update on the Shaikan Field in which it has an 80% working interest.

The CPR, an independent third-party evaluation of the Company's reserves and resources as at 31 December 2020, was prepared by ERC Equipoise ('ERCE').

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

'The updated CPR demonstrates the continuing long-term strong performance of the Shaikan Field with gross 2P+2C reserves and resources volumes in line with the 2016 CPR, after adjusting for production over the period.

'Prior Company estimates are reaffirmed with gross 2P+2C reserves and resources of c.800 MMstb at 31 December 2020, including over 500 MMstb of gross 2P reserves.

'We have a deep understanding of the Shaikan Field that has produced over 80 MMstb to date and are pleased that the latest CPR matches our interpretation and understanding of the geological model, underlining the considerable untapped potential of the field.'

'We had a strong start to the year in January, which saw GKP's highest monthly average daily gross production of 44,405 bopd. As conditions continue to improve, we look forward to resuming the 55,000 bopd expansion project and shareholder distributions.'

Highlights

  • The CPR incorporates significant incremental information, including an updated development plan, new wells, production data and further technical analysis, since the last CPR was prepared by ERCE in 2016.
  • Gross 2P reserves + 2C contingent resources1 of 798 MMstb2 at 31 December 2020 are consistent with volumes as at 31 December 2019, adjusted principally for 2020 production.
  • Gross 1P reserves increased to 240 MMstb, up 33% after adjusting for 2020 production.
  • Gross 2P Jurassic reserves were revised down marginally (2%) to 505 MMstb, after adjusting for 2020 production.
  • Gross 2P Triassic and Cretaceous reserves of 47 MMstb were reclassified to gross 2C contingent resources1, while the Field Development Plan is progressed with the Ministry of Natural Resources.
  • Shaikan continues to deliver stable production with average gross production in January of 44,405 bopd, the highest monthly average to date from the field.
  • The Shaikan Field has significant future production potential with a gross 1P reserves life index3 of c.15 years and a gross 2P reserves life index3 of over 31 years, assuming January 2021 production levels.

Gross reserves and resources based on the Company's estimates at 31 December 2019 and the CPR at 31 December 2020 were:

31 December 2020

1P

2P

2C 1

2P+2C 2

Formation (MMstb)

Reserves

Resources

Jurassic

240

505

80

585

Triassic

-

-

157

157

Cretaceous

-

-

56

56

Total - Gross

240

505

293

798

31 December 2019

1P

2P

2C 1

2P+2C 2

Formation (MMstb)

Reserves

Resources

Jurassic

175

531

80

611

Triassic

18

44

106

150

Cretaceous

1

3

53

56

Total - Gross

194

578

239

817

The reconciliation of changes in reserves and resources between the Company's estimates at 31 December 2019 and the CPR at 31 Decemer 2020 is as follows:

1P

2P

2C 1

2P+2C 2

Gross (MMstb)

Reserves

Resources

31 December 2019

194

578

239

817

Production

(13)

(13)

-

(13)

Reclassifications

(19)

(47)

+47

-

Revisions

+78

(13)

+7

(6)

31 December 2020

240

505

293

798

GKP's 80% net WI4 share of reserves and resources at 31 December 2020 were:

1P

2P

2C 1

2P+2C 2

Formation (80% WI) (MMstb)

Reserves

Resources

Jurassic

192

404

64

468

Triassic

-

-

125

125

Cretaceous

-

-

45

45

Total - Net WI

192

404

234

638

1. Contingent resources volumes are classified as such because there is technical and commercial risk involved with their extraction. In particular, there may be a chance that accumulations containing contingent resources will not achieve commercial maturity. The 2C (best estimate) contingent resources presented are not risked for chance of development.

2. Aggregated 2P+2C estimates should be used with caution as 2C contingent resources are commercially less mature than the 2P reserves.

3. Reserves life index is calculated as gross 1P reserves or gross 2P reserves, as appropriate, divided by annualised January 2021 gross production.

4. Net working interest reserves and resources do not represent the net entitlement resources under the terms of the PSC.

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