Gulfsands Petroleum Regulatory News (GPX)

11 May 2005 07:00

Gulfsands Petroleum PLC11 May 2005 10 May 2005 Gulfsands Petroleum PLC("Gulfsands" or "the Company") Gulfsands acquires Devon Energy's 80% interest in Syria Block 26 Gulfsands becomes operator and farms out 50% interest to SoyuzNefteGas Gulfsands Petroleum (symbol GPX), the AIM listed oil and gas exploration,development and production company with activities in the USA, Syria and Iraqannounces that it has signed a Share Purchase Agreement with Devon EnergyInternational, Ltd. to acquire all of the capital stock of Devon Syria, Ltd. foran undisclosed cash consideration. The sole asset of Devon Syria, Ltd. is an80% working interest in the Production Sharing Contract for Block 26 in Syria,in which Gulfsands currently owns a 20% working interest. Simultaneously, Gulfsands has executed a Participation Agreement withSoyuzNefteGas, a Russian oil and gas company, whereby Gulfsands will assign toSoyuzNefteGas a 50% working interest in Block 26. The new Block 26 ownershipstructure (subject to approval by the Syrian authorities) will be Gulfsands asoperator with a 50% working interest and SoyuzNefteGas with the remaining 50%working interest. The new Gulfsands-operated venture will proceed with the work program in Block26 which consists of seismic acquisition and drilling of 4 exploration wellsduring the next two years. During the balance of 2005, Gulfsands expects toacquire a minimum of 500 kilometers of new 2D seismic in Block 26 and commenceplanning for the first exploration well to be drilled late in 2005 or early2006. This acquisition is expected to close before the end of May 2005. Gulfsands' Chairman and CEO, John Dorrier, said: "Devon's corporate decision to exit from Syria presented us with an excellentopportunity to increase our stake in the block. We have already identified 27exploitation and exploration prospects and leads with mean resources potentialof 1 billion barrels of recoverable oil in the block. We plan to move quickly toexecute the work program in the Block during the remainder of 2005 and should bein a position to drill our first exploration well late this year or early nextyear." 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 Company 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. • Syria In Syria, prior to today's announcement, Gulfsands had a 20% interest in Block26 through the venture with Devon Energy. The block covers 11,000 sq kms andsurrounds areas which currently produce over 100,000 bopd from existing fields.The Company is planning the acquisition of an extensive 2D seismic programme andthe drilling of the first well during 2005. 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. The project willgather, process and transmit natural gas that is currently a waste by-product ofoil production in the region and will end the environmentally damaging practiceof gas flaring. Gulfsands has completed a feasibility study and expects toconduct further technical work and commercial discussions with the Iraq OilMinistry in the first half of 2005. • Onshore USA At the Emily Hawes field, which has previously produced approximately 1.7 bcf ofnatural gas before being shut-in, gas production is expected to start during thefirst half of 2005. The first well in the Barb Mag oil field is expected to bedrilled in the second quarter of 2005. Darcy Energy has a 25% and 37.5% workinginterest in these fields respectively. This information is provided by RNS The company news service from the London Stock Exchange