Gulfsands Petroleum Regulatory News (GPX)

17 Aug 2005 07:01

Gulfsands Petroleum PLC17 August 2005 17 August 2005 Gulfsands Petroleum PLC("Gulfsands" or "the Group") Gulfsands Announces Onshore Gas Discovery at Barb Mag Field Gulfsands Commences Onshore Production at Emily Hawes Field 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 a new gas-well discovery onshore Texas within Darcy Energy LLC, asubsidiary company owned 80% by Gulfsands. Gulfsands recently increased itsownership in Darcy from 75% to 80%. This is Gulfsands' fourth exploratory discovery out of five wells drilled sincethe Group listed on AIM in April of this year. Gas Discovery In Fort Bend County Texas, Darcy Energy has completed the drilling and testingof the first re-development well in the Barb Mag oil field which included theexploratory drilling of a deeper section not previously tested within the field.Wireline logging of the well which was drilled to a total measured depth of9,377 feet identified 4 primary zones of interest with potential net paytotaling 38 feet. The lowest interval at 9,212 feet was tested and flowednatural gas at a rate of 1.5 million cubic feet per day and 36 barrels ofcondensate per day on an 11/64 inch choke at 3,875 pounds flowing tubingpressure. It is anticipated that production from this new gas and condensatediscovery should commence within the next 60 days. The upper most zones will betested at a future date. Darcy owns a 37.5% working interest in this well andthe net estimated cost to Darcy for the drilling, testing and completion isestimated to be less than $400,000. Commencement of Onshore Gas Production In Calhoun County Texas, natural gas production has commenced in the Emily HawesField. A sustained rate on the well has yet to be determined since the well isstill cleaning up but initial gross production is anticipated to be in the rangeof approximately 500,000 to 750,000 cubic feet of natural gas per day. DarcyEnergy now owns a 34.375% working interest in the Emily Hawes Field followingthe acquisition of an additional 9.375% working interest for approximately$111,000. Gulfsands' CEO, John Dorrier, said: "These two successful wells are the beginning of Gulfsands' work in the onshoreUS. The onshore US is an area where Gulfsands can add modest reserves atcompetitive costs of finding and developing. In addition, transportationinfrastructure is in place to allow rapid conversion of these reserves into cashflow at a period of time when oil and gas prices are at an historic high level". 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.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 per day and 36 barrels of condensate per day. Production from thiswell should commence by October 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