First Day of Dealings on AIM

Gulf Keystone Petroleum Ld
08 September 2004



                          GULF KEYSTONE PETROLEUM LTD

                          FIRST DAY OF DEALINGS ON AIM

                                                                8 September 2004

Gulf Keystone Petroleum Limited ("Gulf Keystone" or the "Company"), an
independent oil exploration company operating in the Republic of Algeria, today
announces the commencement of dealings of its Ordinary Shares on the Alternative
Investment Market ("AIM").  Evolution Beeson Gregory Limited is the Nominated
Adviser and Broker to Gulf Keystone.


Placing Statistics

Placing Price per Ordinary Share                                             48p

Number of New Common Shares placed                                   125,000,000

Total proceeds from the Placing (before expenses)                    £60 million

Number of Common Shares in issue immediately following Admission     253,732,140

Market capitalisation following the Placing at the Placing Price    £122 million



Reasons for the Admission and Placing and use of proceeds


The Directors of Gulf Keystone believe that admission to AIM will raise the
Company's profile and provide additional funding for its development of Block
126.  It will also provide the Company with the financial flexibility to enter
into further oil & gas opportunities in Algeria and beyond.


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


"This is milestone in Gulf Keystone's history.  It is gratifying to have the
enthusiastic support of our many new shareholders.  I now look forward to
developing our investment in Algeria and to delivering value to our
shareholders."


                                    - ends -


For further information, please contact:


Evolution Beeson Gregory                        020 7071 4300
Rob Collins


Citigate Dewe Rogerson                          020 7638 9571
Martin Jackson / George Cazenove


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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