RE: Dummy buy and sell - just now24 Aug 2017 15:00
Gulfsands Petroleum
I was fortunate to meet up with John Bell last week as I have been trying to catch up with him for a while and to see how things are progressing at Gulfsands Petroleum (GPX).
Readers will know that historically I have had my issues with the company but with some light appearing at the end of the Syrian tunnel and a strong management style for Mr Bell it is worth reappraising.
GPX is strongly supported by three major shareholders who have backed Mr Bell to focus on capital efficiency whilst managing down the remaining non-core assets and protecting and preserving its core asset, block 26 in North East Syria.
Morocco is a non-core asset and the company is looking for a partner on Moulay Bouchta and is in regular contact with the Office National des Hydrocarbures et des Mines, Morocco's national bureau of petroleum and mines. Should no progress be made, expect to see the company exiting the country.
Tunisia is already in the exit process, the branch office has closed and all will be done and dusted there in short order.
GPX has two licences in Colombia, Llanos 50 and Putumayo 14. The former has been extended by 18 months to May 2018 and work has commenced on the seismic MMA and the exploration drilling EIA environmental work.
In the latter, the company has commenced on the Consulta Previa for the social and community engagement in the area.
GPX is clearly a Middle East and North Africa-centric company and assets in Latin America are not a strategic fit. However, the company is prepared to fund early stage operations in preparation for bringing in a partner, which it is actively seeking.
Having assessed the non-core assets, it is worth looking at the original jewel in the crown, block 26 in North East Syria, at present under force majeure as a result of EU sanctions but where the assets are in good order and materially undamaged.
Obviously GPX remains committed to full compliance with the sanctions but is "focused and maintains its readiness to resume operational activities once sanctions are lifted".
Production carries on at block 26 without GPX participation and apparently can still do 15-20,000 barrels per day, which does appear to demonstrate good reservoir quality and operational integrity.
I understand that the area is safe and has had few disruptions without ISIS or other extremists in the area.
Financially, costs at the company have come down significantly and the balance sheet has been tidied up. Cash burn fell from $8.7 million (£6.7 million) in 2015 to less than $5 million in 2016 and continues to be a key focus for management as is expected to be shown by further reductions in the next results, interims due in September.
There is little doubt, if ever there was any, that Gulfsands should be considered the purest of Syrian plays for investors when the current conflict ends.
With sizeable backing and good-quality management dedicated to managing down non-cor
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