Issue of Equity

RNS Number : 8395R

Gulf Keystone Petroleum Ld

07 May 2009

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

7 May 2009

Gulf Keystone Petroleum Ltd.

("Gulf Keystone" or "the Company")

Issue of Equity

Gulf Keystone Petroleum Ltd. (AIM: GKP), an independent oil and gas exploration and production company with assets in Algeria and Kurdistan, is pleased to announce that on the 6th May 2009 it secured £30 million by way of a Standby Equity Distribution Agreement ("SEDA") and £2.1 million cash through an equity placing.

The Company has entered into the £30 million SEDA with YA Global Master SPV Ltd, an investment fund managed by Yorkville Advisors, LLC. The SEDA enables Gulf Keystone, entirely at its own discretion for up to 36 months, to draw down funds in tranches in exchange for the issue of new equity on terms related to the prevailing market price at the time of each drawdown.

In addition, Gulf Keystone has placed 14,660,000 new common shares of $0.01 each at a price of 14.5 pence each, raising gross proceeds of approximately £2,125,700.

A further 2,087,740 new common shares of $0.01 each will be issued in lieu of cash payments for fees due.

Application will be made to the London Stock Exchange for 16,747,740 new common shares of $0.01 each to be admitted to trading on AIM. It is expected that the admission will become effective and that trading will commence on 12 May 2009.

It is intended that the funds raised, together with existing cash resources, will be used to drill exploration wells in Kurdistan, exploration and appraisal wells on the HBH Permit in Algeria and, in addition, to fund the capital expenditure required to progress the development of the HBH and RM gas fields in Algeria.

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

"With the pace of activity in Kurdistan picking up, the Board decided it was prudent to secure medium term funding in order to maintain that rate of progress. The equity facility has the important benefit of being discretionary and as such will only be used as required but it does enable Gulf Keystone to quickly capitalise on opportunities and successes as they arise."