Gulfsands Petroleum Regulatory News (GPX)

29 Jul 2005 07:00

Gulfsands Petroleum PLC29 July 2005 29 July 2005 Gulfsands Petroleum PLC("Gulfsands" or "the Group") Gulfsands Drills 2 New Gas Discovery Wells in 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,announces 2 new gas-well discoveries in the Gulf of Mexico by NorthstarGulfsands LLC, a subsidiary company owned 52.6% by Gulfsands. Gas Discoveries Northstar Gulfsands recently participated in the drilling and logging of 2 newexploration wells in West Delta Block 64. The first well, West Delta 64 #1, wasdrilled to a total depth of 12,120 feet (measured depth). The well loggednatural gas pay zones in shallow Pleistocene reservoirs at depths between 2,000and 3,000 feet. The well additionally logged gas pay in Pliocene intervals7,600-7,700 feet and 10,600-10,700 feet. Internal estimates put gross reservespotential for this well in the range of 8-24 BCFG. Production casing has beenset in the well and it has been suspended for completion and production. The second well, West Delta 64 #2 commenced drilling in early July. Drillingwas interrupted for several short periods of time during hurricanes Cindy andDennis, however the well reached total depth of 8,788 feet in late July. Thewell logged gas pay in Pleistocene reservoir in the intervals 2,289-2,318 feet,4,326-4,376 feet and a Pliocene reservoir from 8,225-8,249 feet. Internalestimates put gross reserves for the West Delta #2 well in the range of 7-17BCFG. Production casing has been set in the well and it is being suspended forcompletion and production. Northstar Gulfsands has a 12.5% working interest in West Delta #1 and #2. Bothwells should be completed for production by the end of 2005. Production Status While some production for Northstar Gulfsands was temporarily shut-in for a veryshort time period during the recent hurricanes in the Gulf, there was noreported damage to any of Northstar Gulfsands production facilities orpipelines, and production has been restored to pre-storm levels. Commencement of Production from Eugene Island 83 Production from the recently announced gas discovery on Eugene Island 83 in theGulf of Mexico is scheduled to commence by September 2005. Gulfsands' CEO, John Dorrier, said: "Completion of these two new West Delta exploration wells adds important new gasreserves for the Company. In addition, the wells should come on production in arelatively short period of time and provide new cash flow at a period ofhistoric high gas prices in the US. We are encouraged by the high success rateof our exploration wells in the Gulf so far this year and anticipate furthersuccess in the remaining exploration drilling program this year." 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 expects to conductfurther technical work and commercial discussions with the Iraq Oil Ministry inthe first half of 2005. • 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