Drilling Update

RNS Number : 5668X

Gulf Keystone Petroleum Ld

26 June 2008

Not for release, publication or distribution in or into jurisdictions other than the United Kingdom and Bermuda where to do so would constitute a contravention of the relevant laws of such jurisdiction

26 June 2008

GULF KEYSTONE PETROLEUM LIMITED

("Gulf Keystone" or "the Company")

DRILLING UPDATE RM-1 WELL, ALGERIA

Gulf Keystone Petroleum Ltd (AIM: GKP), an independent oil and gas exploration company with interests in Algeria and Kurdistan, is pleased to announce that drilling of the RM-1 exploration well on the Hassi Ba Hamou Permit (HBH Permit) in Algeria has been completed and tested.

The RM-1 well, which was started on 7 May 2008, reached a total depth of 1,111 metres on a separate prospect some 50 kilometers to the southeast of the HBH gas field. Gas shows during drilling and logging results indicate a 61 meter gas column has been encountered in sands of Siegenian age. During a production test the well flowed gas at a stabilised flow rate of 10,266 cubic meters per hour (8.7 mmscf per day) through a 94/64-inch choke.

With the success of RM-1, GKP has agreed to go into the second prospecting period of the HBH Permit with a work programme obligation of 500 km2 of 3D seismic, 1 exploration well and 2 appraisal wells.

The drilling rig will now move to drill well FEG-1, the third and final exploration well to be drilled, and the fourth well in the current six well drilling campaign. This well is expected to spud within a month. No further announcement on the FEG-1 well is planned until the well has been completed.

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

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, has reviewed and approved the technical information contained in this announcement. Mr Garrett is a Fellow of the Geological Society, a member of the Petroleum Exploration Society of Great Britain, and a Certified Petroleum Geologist (American Association of Petroleum Geologists). He meets the criteria of a qualified person under the AIM guidance note for mining, oil and gas companies.

Mr. Todd Kozel, Executive Chairman, Gulf Keystone, commented:

"This is our first exploration success on the HBH Permit and the RM-1 well follows our successful appraisal well, HBH-4, earlier this year. The results so far have already given us the confidence to progress to Phase 2 of the HBH Permit."