Gulfsands Petroleum Regulatory News (GPX)

14 Dec 2005 07:00

Gulfsands Petroleum PLC14 December 2005 14 December 2005 Gulfsands Petroleum PLC("Gulfsands" or "the Group") Gulfsands Announces Offshore Discovery in the Gulf of Mexico Gulfsands Announces Near Term Exploration Program in the Gulf of Mexico Gulfsands Petroleum PLC (symbol GPX), the AIM listed oil and gas exploration,development and production company with activities in the USA, Syria and Iraq,is pleased to announce a new discovery in the Gulf of Mexico. Exploration Discovery and Drilling Update for the Gulf of Mexico Gulfsands participated at a 12.5% working interest in an exploration well onEugene Island 58. This well has been drilled to a total measured depth of11,655 feet and the wireline logs of the well indicated the presence ofhydrocarbons within several zones with approximately 170 feet of potential netpay. This well tested natural gas at a rate of 8.2 million cubic feet per dayand 134 barrels of condensate per day. Production casing has been set andcompletion operations have commenced and the well is scheduled to commence firstproduction in late March of 2006. The net cost to Gulfsands for the drilling,completion and facility costs to hook up this well is estimated to beapproximately $986,000. Upon completion of operations on the Eugene Island 58 discovery well, Gulfsandswill participate in a three well exploration drilling campaign in the immediatearea, where Gulfsands will be participating with a 25% working interest in eachof these wells. Gulfsands also participated recently at a 13.15% working interest in a sidetrackwell on Ship Shoal Block 177 at a net cost of approximately $465,000. This wellhad approximately 19 feet of net pay and was put on production last week at agross daily rate of approximately 5 million cubic feet of natural gas and 31barrels of oil. The Company also participated at a 5.26% working interest in an exploration wellat High Island 528 that was unsuccessful at a net cost to Gulfsands ofapproximately $188,000. Since Gulfsands listed on AIM in April 2005, the Company has participated in thedrilling of six offshore Gulf of Mexico exploration wells and four of those sixhave been discoveries. John Dorrier, CEO of Gulfsands Petroleum, said: "We are pleased with the overall results of the 2005 exploration programs in theGulf. These wells put the Company in a good position to move production back topre-storm levels and above, as offshore pipeline infrastructure owned andoperated by third-parties is brought back into service." Enquiries:Gulfsands Petroleum (Houston) 001-713-626-9564David DeCort, Chief Financial Officer College Hill (London) 020-7457-2020Ben Brewerton / Nick Elwes Seymour Pierce (London) 020-7107-8000Richard RedmayneJonathan Wright Note to Editors • Gulf of Mexico, USA The Group owns interests in 64 offshore blocks comprising approximately 216,000 gross acres which includes 39 producing oil and gas fields offshore Texas and Louisiana with proved and probable reserves of approximately 30.3 billion cubic feet of natural gas equivalents, consisting of 14.94 billion cubic feet of natural gas and 2.56 million barrels of oil as of 30 June 2005 with a net present value of approximately $129 million. • Syria In Syria, Gulfsands owns a 50% working interest in Block 26 and is the operator. The block covers 11,000 square kilometres and surrounds areas which currently produce over 100,000 barrels of oil per day from existing fields. The Group commenced the acquisition of an extensive 2D seismic programme during August 2005 and anticipates the drilling of the first well during the first half of 2006. Gulfsands has identified 31 exploitation and exploration prospects and leads with mean resources potential exceeding 1 billion barrels of recoverable oil. • Iraq Gulfsands signed a Memorandum of Understanding in January 2005 with the Ministry of Oil in Iraq for the Misan Gas Project in Southern Iraq and is currently negotiating the definitive contract for the project. The project will gather, process and transmit natural gas that is currently a waste by-product of oil production in the region and will end the environmentally damaging practice of gas flaring. Gulfsands has completed a feasibility study and expects to conduct further technical work and commercial discussions with the Iraq Oil Ministry. • Onshore USA Gulfsands operates onshore in the USA through its 80% owned subsidiary company Darcy Energy LLC. At the Emily Hawes field, initial gas production commenced in the summer of 2005. The first well in the Barb Mag oil field has been drilled and wireline logged with some 38 feet of potential net pay and production tested at 1.5 million cubic feet of natural gas and 36 barrels of condensate per day. Production from this well should commence during the first quarter of 2006. Darcy Energy has a 34.375% and 37.5% working interest in these fields respectively. This information is provided by RNS The company news service from the London Stock Exchange