DUBAI, (Reuters) – London-listed oil and gas explorer Gulf Keystone Petroleum Ltd shares rose 46 percent on Thursday after it announced a significant oil discovery in Iraq’s Kurdish region.

Shares rose to 19 pence after the company made a preliminary estimate of around 300 million to 500 million barrels of oil in place it found in a shallow zone at the Shaikan-1 exploration well it is drilling.

Iraq’s Kurdish region was little explored under Saddam Hussein and big discoveries have been made there by companies that have signed oil and gas deals with the semi-autonomous Kurdish Regional Government (KRG) since the U.S.-led invasion of Iraq in March 2003.

The KRG and the oil ministry in Baghdad have had a bitter feud over the contracts and control of oil and gas resources.

The oil ministry has called the deals illegal and said only it has authority to sign oil and gas contracts. Despite the ongoing dispute, Baghdad allowed exports to begin from two oilfields in the Kurdish region in June.

Oil from the well flowed at 5,000 to 8,000 barrels per day with an API gravity of 21-22 degrees, Gulf Keystone said.

The company plans to drill deeper with the same well into formations that could hold more than 1.5 billion barrels of oil, it said in the statement.