SONATRACH (Algeria’s National Oil Company) and partners Gulf Keystone Petroleum Ltd and BG Group (Operator) declares that drilling on the HBH-4 appraisal well, on the Hassi Ba Hamou ("HBH") gas field in Algeria, has been completed and the well tested.

The drilling of the HBH-4 well began on 16 December 2007 to a total depth of 1,011 metres.

A production test has been carried out on reservoirs of Devonian age. A stabilised flow rate of 12,800 cubic meters per hour (10.8 mmscfg per day) was achieved through a 88/64-inch choke.

The HBH permit, which contains the HBH gas field, was awarded in May 2005 ("HBH Permit"). It comprises five blocks within an area of 18,380 square kilometres in the Bechar Basin in Algeria’s Western Desert.

Partners in the HBH Permit are Gulf Keystone 38.25%, BG Group 36.75% and SONATRACH 25%.

The drill rig will now move to drill well HBHN-1, an exploration well to the north of the HBH gas field.

Christopher Garrett, the Company's Vice President of Operations, who has over 29 years relevant experience within the sector and who has been involved with this project for over 2 years and meets the criteria of a qualified person under the AIM guidance note for mining, oil and gas companies, has reviewed and approved the technical information contained in this announcement.

Mr. Todd Kozel, Executive Chairman, Gulf Keystone, commented, "This is the first well in a series of 6, 3 appraisal and 3 exploration, that the Association plans to drill back to back on the Hassi Ba Hamou Permit.

"The well was completed on schedule and to budget with the test data and flow rate in-line with our expectations. This gives us valuable information on the resource potential of the permit and encouragement as we move onto the first exploration well on the HBH permit."

Tags: Gulf Keystone Petroleum, Sonatrach