Gulfsands Petroleum Regulatory News (GPX)

7 Oct 2005 07:00

Gulfsands Petroleum PLC07 October 2005 7 October 2005 Gulfsands Petroleum PLC("Gulfsands" or "the Group") Hurricane Rita Update Gulfsands Petroleum PLC (symbol GPX), the AIM listed oil and gas exploration,development and production company with activities in the USA, Syria and Iraq,provides update on the impact to operations in the USA Gulf of Mexico fromHurricane Rita which made landfall in the USA Gulf Coast in late September. From initial review of operated and non-operated facilities it appears HurricaneRita did only superficial damage to those facilities and such damages areinsured. However, significant damage has occurred to the region's onshore gasplants and infrastructure, and to offshore pipelines which have resulted in muchof the production in the Gulf of Mexico being shut-in not only for NorthstarGulfsands LLC, the 52.6% subsidiary of Gulfsands, but for all producers in theGulf of Mexico. Production within Northstar Gulfsands LLC has resumed but itwill take some time before production is back to pre Hurricane Rita productionlevels. The Company will provide a further update once an accurate timeframehas been determined when production will be back to pre storm levels. John Dorrier, CEO of Gulfsands Petroleum, said: "We have intensive ongoing efforts to restore production from operatedfacilities. These efforts require minimal repair to facilities beforeproduction can be restarted and we expect that production from operatedproperties will be increased steadily over the next 30 days. In non-operatedfacilities, we are still gathering information about expected production volumesover the near term and should develop clearer views during the next severalweeks. The major impact to the Company will be a reduction in productionvolumes expected in the 4th quarter of 2005, but an offsetting extension inreserves life." Enquiries:Gulfsands Petroleum (Houston) 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 has a 52.6% interest in Northstar Gulfsands LLC, which owns interestsin 39 producing oil and gas fields offshore Texas and Louisiana and operates 8of those fields. Northstar Gulfsands LLC has proved and probable reserves of58.1 billion cubic feet of natural gas equivalents, consisting of 28.85 billioncubic feet of natural gas and 4.88 million barrels of oil as of 30 June 2005. • 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 currentlyproduce over 100,000 barrels of oil per day from existing fields. The Groupcommenced the acquisition of an extensive 2D seismic programme during August2005 and anticipates the drilling of the first well during the first quarter of2006. Gulfsands has identified 27 exploitation and exploration prospects andleads with mean resources potential of 1 billion barrels of recoverable oil. • Iraq Gulfsands signed a Memorandum of Understanding in January 2005 with the Ministryof Oil 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 expects to conductfurther technical work and commercial discussions with the Iraq Oil Ministry. • Onshore USA Gulfsands operates onshore USA through its subsidiary company Darcy Energy LLC.Gulfsands recently increased its ownership in Darcy Energy to 80%. At the EmilyHawes field, initial gas production commenced in the summer of 2005. The firstwell in the Barb Mag oil field has been drilled and wireline logged with some 38feet of potential net pay and production tested at 1.5 million cubic feet ofnatural gas and 36 barrels of condensate per day. Production from this wellshould commence before year-end 2005. 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