Gulfsands Petroleum Regulatory News (GPX)

5 Aug 2005 11:18

Gulfsands Petroleum PLC05 August 2005 5 August 2005 Gulfsands Petroleum PLC("Gulfsands" or "the Group") Annual General Meeting Gulfsands Petroleum PLC is an oil and gas exploration, development andproduction company with activities in the USA, Syria and Iraq. The following comments were made by Gulfsands' Chairman, John Dorrier, at theCompany's Annual General Meeting, held at 11.00am today: "Gulfsands has made good progress in the four months since admission to AIM. In that time we have drilled 4 exploration wells in the Gulf of Mexico, three ofwhich have been successful new gas discoveries. The impact of these discoverieshas resulted in new net reserves additions to Northstar Gulfsands LLC, asubsidiary company owned 52.6% by Gulfsands, of between 3 - 6 billion cubic feetof natural gas (bcfg). All three successful wells should be in productionbefore the end of the year. Additionally we have added 3.3 bcfg of net reservesto Northstar Gulfsands LLC from recompletions and workovers in the Gulf ofMexico since the beginning of the year. In Syria, we increased our interest in Block 26 from 20% to 50% and took overoperatorship. We have since signed a contract with an experienced seismicacquisition company to conduct a 1,170 km 2D seismic which is due to commencethis month. In June, we announced that we had increased our interest in the Misan GasProject in Iraq to 100%, from 85%. Later that month, we hosted a series ofmeetings in London with a delegation from the Iraqi Oil Ministry. The meetingswent well and we are in discussions with the Iraqi Oil Ministry regarding theterms and an execution timetable for a definitive contract for the Misan GasProject. Last year, the average daily net working interest production for NorthstarGulfsands, which we own 52.6% of, increased from less than 1,000 barrels of oilequivalent per day (boepd) in 2003 to between 5,000 and 6,000 boepd at the yearend. This helped Gulfsands' cash flow from operating activities to increase to$14.8 million. Proved and probable reserves within Northstar Gulfsandsincreased significantly to 4.7 million barrels of oil and 29.2 billion cubicfeet of natural gas as of 1 November 2004. It has been a very active and successful year for Gulfsands, resulting insignificant increase in oil and gas reserves, turnover of $33 million and a netprofit for the year. In addition, the Group's activities in the Gulf of Mexico,Syria and Iraq continue to provide significant potential for expansion during2005 and beyond." Enquiries: Gulfsands Petroleum (Houston) 713-626-9564David DeCort, Chief Financial Officer College Hill (London) 020-7457-2020Ben Brewerton / Jim Joseph Seymour Pierce (London) 020-7107-8000Richard RedmayneJonathan Wright Note to Editors • Gulf of Mexico, USA The Group has a 52.6% interest in Northstar Gulfsands, which owns interests in39 producing oil and gas fields offshore Texas and Louisiana and operates 8 ofthose fields. Northstar Gulfsands has proved and probable reserves of 4.7 mmbblsof oil and some 29.2 bcf of gas as of 1 November 2004. • Syria In Syria, Gulfsands owns a 50% working interest in Block 26 and is the operator.The block covers 11,000 sq kms and surrounds areas which currently produce over100,000 bopd from existing fields. The Group has contracted for the acquisitionof an extensive 2D seismic programme during the summer of 2005 and the drillingof the first well during the first quarter of 2006. Gulfsands has identified 27exploitation and exploration prospects and leads with mean resources potentialof 1 billion barrels of recoverable oil. • Iraq Gulfsands has recently signed a Memorandum of Understanding with the Ministry ofOil in Iraq for the Misan Gas Project in Southern Iraq and is currentlynegotiating the definitive contract for the project. The project will gather,process and transmit natural gas that is currently a waste by-product of oilproduction in the region and will end the environmentally damaging practice ofgas flaring. Gulfsands has completed a feasibility study and is conductingfurther technical work and commercial discussions with the Iraq Oil Ministry. • Onshore USA Gulfsands operates onshore USA through its subsidiary company Darcy Energy LLC. At the Emily Hawes field, which has previously produced approximately 1.7 bcfof natural gas before being shut-in, gas production is scheduled to commence inthe summer of 2005. The first well in the Barb Mag oil field commenced drillingin early July 2005. Darcy Energy has a 25% and 37.5% working interest in thesefields respectively. This information is provided by RNS The company news service from the London Stock Exchange