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Gulf Keystone Petroleum suspends drilling activities at well in Iraqi Kurdistan

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Oilfield Technology,

In an attempt to limit the spread of Coronavirus (Covid-19), the Kurdistan Regional Government, in line with many other jurisdictions, has put in place a series of tight controls on the movement of personnel into and around the region. With these controls, along with the increasing global restrictions on movement, it has become difficult to ensure Gulf Keystone has the appropriate drilling personnel and equipment onsite in order to continue safe drilling operations. Therefore, with the SH-13 well - the current well in the campaign - at a safe stage, the decision has been taken to suspend drilling activities until conditions improve to ensure safe operations.

Production rates from the field are at approximately 38 000 bpd and production currently continues unaffected by the impact of Covid-19. However, as a precaution, the company has restricted the access to its production facilities. As a result, certain construction activities related to the expansion to 55 000 bpd have also been suspended until circumstances improve.

The planned production increase to 55 000 bpd, scheduled for 3Q20, and average production guidance for 43 000 - 48 000 bpd remain priorities. However, the suspension of drilling and certain expansion operations may impact Gulf Keystone's ability to meet these targets in the timeframes currently in place. The company will release its Full Year results on 26 March 2020.

The company remains in a strong financial position, with a cash balance of US$159 million as at 13 March 2020.

Jón Ferrier, CEO, commented: "As a company we place the welfare of our people and those we work with and near as our absolute priority. We also have to be confident of having the right people on site to continue safe operations. Whilst we are not aware of any employees or contractors having been infected, we believe it is prudent to suspend drilling and certain production facility expansion operations during this time. We are watching the situation closely and will keep all of our stakeholders informed of developments. Meanwhile, the Shaikan field itself is performing well."

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