Progress Report

Gulf Keystone Petroleum Ld
06 April 2005


6 April 2005

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


                                Progress Report


Gulf Keystone Petroleum, Ltd.  (AIM-GKP), an independent oil exploration company
operating in the Republic of Algeria, today provided the following progress
report on the Company's activities.


Rig Mobilised and Drilling to Commence on GKS-3

The drilling rig contracted from Saipem S.p.A has been assembled, tested and
mobilised, and is capable of drilling to a depth of 6,000 metres with a 5-inch
drill string.  The re-entry and sidetrack of GKS-3 is expected to commence on
Thursday April 7, 2005 to complete the objective section that well logs
indicated had better porosity and oil saturations than the GKS-2 well.


Gulf Keystone is re-drilling the reservoir in order to employ a high volume
completion technique, to better stimulate the well.  This cannot be performed in
the original well bore.  On completion of GKS-3, the rig will be moved to the
GKS-2 well drilled by SONATRACH, which is the discovery well on Gulf Keystone's
GKS structure, for re-completion.  GKS is estimated to contain 29.6 million
barrels of oil equivalent (BOE) recoverable reserves net to Gulf Keystone, as
per Scott Pickford Limited's Competent Persons Report, a full version of which
is published in the Company's AIM Admission Document.


3D Seismic Progress


As announced in January, Gulf Keystone has signed a contract with E.NA.GEO (the
Algerian national seismic company) to conduct a 3D seismic survey on the
Company's Block 126a license, covering an area of 460 km2 over the south-western
portion of block 126a which includes the OBA, EKG, RTB-W and CEJ Triassic
prospects.  To date they have acquired approximately 110 km2 (24%) of the target
area and expect completion of the seismic survey on the remaining area towards
the end of June.


Gulf Keystone believes the area has the potential for new discoveries on
exploration prospects generated by the previous 2D surveys and may be on the
structural continuation of a nearby oil field discovered and produced by
SONATRACH.  This survey has two main purposes:


-  To more accurately map those exploratory prospects with significant
reef potential that were indicated in the 2D survey


-  To better define the development drilling programme which the
directors intend to commence following drilling of the Company's next planned
exploratory well RTBW-1, which the directors believe could be on a westerly
extension to SONATRACH's Ras Toumb Field in neighbouring Block 108


A further update on interpretation of the seismic data will be provided in due
course.


Todd Kozel, Chief Executive Officer and Vice President of Gulf Keystone said:


"With the rig now operational, we are delighted to start the re-entry of GKS-3,
to exploit the forecast upside potential.  We are also very pleased with the
level of seismic shot to date and look forward to completing the acquisition,
processing and interpretation of the results later this year."


Enquiries


Evolution Securities                        020 7071 4300

Stuart Andrews



Citigate Dewe Rogerson                      020 7638 9571

Martin Jackson/Kate Delahunty


Notes to Editors


Introduction


Gulf Keystone has a Production Sharing Contract with SONATRACH, the Algerian
National Oil Enterprise, for Block 126 in the north eastern area of Algeria near
to the Tunisian boarder.  The Company has operated in the Algerian oil sector
since 2001 and its management team has extensive experience in the North
African, Middle Eastern and United States operating and regulatory environments.


Algeria



Algeria is a member of OPEC (the Organisation of Petroleum Exporting Countries)
and is estimated by an EIA Report to have proven reserves of 37.9 billion boe.
These reserves are estimated to represent 0.9% of the world's crude oil reserves
and 2.6% of the world's natural gas reserves.  Algeria is the world's 16th
largest oil producer and the 6th largest gas producer, with its 2003 oil
production totalling approximately 1.86 million bbl/d.  Algeria is a major
exporter of oil and gas, and the National Council of Energy believes that the
country contains vast undeveloped oil and gas reserves.  Over the last few
years, significant oil and gas discoveries have been made, largely by foreign
companies in partnership with Sonatrach.  Algeria's oil sector, unlike that of
most OPEC countries, has been open to foreign investment for more than a decade
to assist with the development of its oil reserves.



Business



Block 126 is at an early stage of development.  The Company intends to grow the
proven and probable reserves by a programme of further drilling, testing and
evaluation of the GKN field and the GKS, GRJ, OGZ and FKN discoveries.  It is
further intended to pursue the exploration drilling of identified prospects and
leads.  Block 126 had aggregate estimated remaining proven and probable reserves
of approximately 221 MMboe of which Gulf Keystone's share is approximately 107
MMboe.  The Company considers that Block 126 has significant upside potential in
possible and lead prospective resources  of 959.6 MMSTB and 2.6 Tcf of gas.



Strategy



Management intends to exploit its position as an independent exploration company
operating in Algeria by continuing to drill exploratory wells on prospects
showing strong perceived geophysical evidence of commercially viable oil and gas
reserves.  At the same time, it intends to continue to drill development wells
in fields containing proven reserves.


Specifically, the Company currently intends to focus on (i) the development of
the GKN field which contains a producing well; (ii) carrying out appraisal work
on prospects GRJ, OGZ, GKS and FKN; (iii) conducting further exploration works
on new prospects and leads on Block 126.  The Company intends to participate in
future bid rounds to attempt to secure additional blocks in Algeria and to
evaluate other oil and gas prospects in North Africa and the Middle East.  In
addition, the Company intends to seek opportunities to partner with new and
existing operators in Algeria such as SONATRACH.



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