Operational update

Gulf Keystone Petroleum Ld
30 December 2005






For release at 0700hrs  30 December 2005



                        GULF KEYSTONE PETROLEUM LIMITED
                      ("Gulf Keystone" or the "Company")


                               Operational Update


Gulf Keystone Petroleum, Ltd. (AIM-GKP), an independent oil exploration company
operating in the Republic of Algeria, announces details of its current
operations.


Block 126A (Gulf Keystone 100%)

Gulf Keystone has completed drilling, coring and logging operations at the GRJ-2
well on Block 126A in north eastern Algeria. Technical evaluation of the data
received from the company's third party consultants has indicated that there are
three separate potential reservoir intervals which may have the potential to
contain hydrocarbons.

A testing program for GRJ-2 will be implemented once Gulf Keystone's experts
have completed the design of the testing program and confirmed the availability
of the required equipment.  The directors believe that the testing program could
involve fracturing of the indicated reservoir sections which is intended to
increase the potential to intersect open fractures.

The processing of the 460 square kilometre 3-D seismic survey in the southwest
of Block 126A, acquired in 2005 by Gulf Keystone, is now complete and the Gulf
Keystone team will be using this 3-D to map and interpret the reservoir in order
to select a location for drilling in 2006.

The application for a production license for the GKN field is progressing. Gulf
Keystone has made what the directors hope and believe to be the final submission
of documentation to the joint Sonatrach/Gulf Keystone management committee for
Block 126 A . The information has been passed to Sonatrach and Gulf Keystone is
working with Sonatrach to seek the final approval for the license from the
Algerian Ministry of Energy and Mines.

As a result of the Gulf Keystone's successful well test on the GKS-2 well
originally drilled and successfully tested as a discovery well by Sonatrach,
Gulf Keystone has initiated the process of submitting an application for an
early production license on the GKS field which is an initial step for a
permanent production license and a field development plan. The company will be
working with Sonatrach through the Sonatrach/Gulf Keystone management committee
to seek the approval for a short term production license from the Ministry.


Block 129 (Gulf Keystone 100%)

Gulf Keystone is calling for tender for the processing and interpretation of
412 Km2  of 3-D seismic acquired by Sonatrach in 2005 before Gulf Keystone was
awarded the Block in the 6th International Bid Round.  The analysis of available
geological and geophysical data on four (4) existing discoveries previously
identified by Sonatrach and approximately 5300 kilometres of 2-D seismic
acquired by Sonatrach which identified  an additional twenty-two (22) leads will
be used to develop an appropriate ongoing work program for Block 129.


Blocks 108/128 (Gulf Keystone 100%)

Gulf Keystone has completed processing 153Km2 3-D seismic acquired by Gulf
Keystone in the 3rd quarter of 2005 over the existing Ras Tomb oil field
previously discovered and produced by Sonatrach.  The acquisition of this 3-D
seismic fulfils the minimum work program for 3-D seismic under the first term of
the contract for Blocks 108/128.  The purpose of the 3-D seismic acquisition
over the Ras Tomb field is to seek to more highly define the reservoir and the
field so that Sonatrach/Gulf Keystone can identify appropriate locations for
drilling new wells for additional field development.

Gulf Keystone will also evaluate the existing Sonatrach discovery on the OSD
structure and the 4457 kilometres of 2-D seismic previously acquired by
Sonatrach to develop a work program to assess Blocks 108/128.


Hassi Ba Hammou Perimeter  (Gulf Keystone 100%)

Gulf Keystone's technical staff, in conjunction with our partner Sonatrach and
consultants, have been analysing 3rd party data on this permit which consists of
5 Blocks covering approximately 18,000 square kilometres in the gas producing
western region of Algeria.  Specifically, Gulf Keystone has been focussing on
the HBH discovery made by Sonatrach.  This field was discovered by the HBH-1
well and successfully appraised by the HBH-2 and HBH-3 wells.  A 3-D seismic
acquisition program and an appraisal drilling program are being designed for the
further appraisal and development of this discovery.

Further, the company is reviewing approximately 4703 kilometres of existing 2-D
seismic previously acquired by Sonatrach in respect of an additional ten (10)
potential leads identified by Sonatrach and Gulf Keystone to assess any further
upside potential of the permit area.


Portfolio Management

Gulf Keystone has engaged Tristone Capital Limited, an advisory firm
specialising in the oil and gas industry, to advise it in relation to the
possibility of bringing in a potential partner or partners into a number of the
company's Algerian assets.  The strategic purpose of this process is to seek to
bring in a partner or partners that can assist the company in the acceleration
of the commercialisation of its current portfolio of assets while enabling Gulf
Keystone to not only manage its future financial commitments but also take
advantage of the opportunities that exist for Gulf Keystone to build and widen
its asset portfolio within the region.


Todd Kozel, Chief Executive Officer of Gulf Keystone Petroleum said:

"Our operations in Algeria are developing well after another busy period for
Gulf Keystone Petroleum. I believe that the company can look forward to 2006
with renewed optimism as we deliver on our strategic plan."

Enquiries

Gulf Keystone Petroleum: 020 7514 1400
Todd Kozel, CEO

Citigate Dewe Rogerson: 07834 767054
George Cazenove


or visit: www.gulfkeystone.com


                      This information is provided by RNS
            The company news service from the London Stock Exchange