17 Dec 2009 07:00
| Immediate Release | 17 December 2009 |
GULFSANDS PETROLEUM PLC
Operations Update:
KHE-13 Development Well Intersects 29 Metre Net Oil Column and Flows Oil
Commenced KHE-14 Drilling Operations, to be followed by Zaman-1 Exploration Well
Khurbet East Gross Oil Production Reaches 6 million Barrels
London, 17th December 2009: Gulfsands Petroleum plc ("Gulfsands", the "Group" or the "Company" - AIM: GPX), the oil and gas production, exploration and development company with activities in Syria, Iraq, and the U.S.A., is pleased to provide the following update on the Company's operations at Block 26, Syria where Gulfsands holds a 50% interest and acts as operator.
KHE-13 Development Well Intersects 29 Metre Net Oil Column and Flows Oil
The KHE-13 development well, located approximately 1.5 kilometres to the south-west of the KHE-1 discovery well and approximately 1.4 kilometres north-west of the KHE-8 appraisal well, encountered the top of the Cretaceous Massive Formation at a measured depth ("MD") of 1936 metres (1539 metres true vertical depth sub surface ("TVD SS")) and was drilled to a total depth of 1990 metres MD (1593 metres TVD SS).
Preliminary interpretation of drilling data and wireline logs has identified a gross oil column within the well-bore of 33 metres with a net pay of 29 metres having an average porosity of 18%, similar to previous wells. The base of the oil-bearing reservoir is at a depth of 1969 metres MD (1572 metres TVD SS). A definitive oil-water contact was not identified in the well-bore.
An open-hole drill-stem test was conducted over the interval 1933-1973 metres MD. The KHE-13 well flowed naturally over a 24 hour test period at an average rate of 1020 barrels of oil per day ("bopd") on a 32/64" choke setting. Negligible quantities of formation water were produced during this flow period.
The well has been completed as a future production well and plans are in place to tie the well into the Khurbet East Early Production Facility ("EPF"), located approximately 3.5 kilometres north-east of KHE-13.
Forward Drilling Programme
Following the completion of operations at KHE-13 the rig was moved to the KHE-14 drilling location approximately 4.9 kilometres south of the KHE-1 discovery well. Drilling of KHE-14 has now commenced and is designed as a vertical development well to intersect the oil water contact in the Khurbet East field. The well should also provide valuable information on reservoir presence and continuity in the south-west portion of the field.
The first well in the 2010 exploration drilling programme, Zaman-1, will commence drilling after completion of operations on KHE-14. The Zaman prospect is located approximately 4.5 kilometres to the south of the Khurbet East Field as currently delineated and targets the same Cretaceous Massive formation as is under production at Khurbet East.
Khurbet East Field Oil Production
Average daily gross oil production at the Khurbet East field continues to be in excess of 17,000 barrels per day with the result that as of 17th December, cumulative gross oil production will have reached 6 million barrels, with minimal water production and minimal pressure depletion being observed to date.
Ric Malcolm, Gulfsands CEO, said
"The successful drilling and testing of the KHE-13 development well is a pleasing result, as is the continued steady oil production from the Khurbet East Field and the reaching of another significant milestone this week of 6 million barrels gross production."
This release has been approved by Richard Malcolm, Chief Executive of Gulfsands Petroleum Plc who has a Bachelor of Science degree in Geology with 29 years of experience in petroleum exploration and management. Mr. Malcolm has consented to the inclusion of the technical information in this release in the form and context in which it appears.
For more information please contact:
| Gulfsands Petroleum (London) | +44 (0)20 7434 6060 |
| Richard Malcolm, Chief Executive Officer Kenneth Judge, Director of Corporate Development & Communications | +44 (0)7733 001 002 |
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| Buchanan Communications Limited (London) | +44 (0)20 7466 5000 |
| Bobby Morse Ben Romney | |
| RBC Capital Markets (London) | +44 (0)20 7653 4667 |
| Sarah Wharry |
ABOUT GULFSANDS:
Gulfsands is listed on the AIM market of the London Stock Exchange.
Syria
Gulfsands owns a 50% working interest and is operator of Block 26 in North East Syria. The Khurbet East oil field was discovered in June 2007 and commenced commercial production within 13 months of the discovery. This field is producing at an average gross production rate of approximately 17,000 barrels of oil per day through an early production facility. Block 26 covers approximately 8,250 square kilometres and encompasses existing fields which currently produce over 100,000 barrels of oil per day, and are operated mainly by the Syrian Petroleum Company. The current exploration license expires in August 2010 and is extendable for a further two years. Gulfsands' working interest 2P reserves in Syria at 31 December 2008 were 35.2 mmbbls.
Iraq
Gulfsands signed a Memorandum of Understanding in January 2005 with the Ministry of Oil in Iraq for the Maysan Gas Project in Southern Iraq, following completion of a feasibility study on the project, and is negotiating details of a definitive contract for this regionally important development. The project will gather, process and transmit natural gas that is currently a waste by-product of oil production and as a result of the present practice of gas flaring, contributes to significant environmental damage in the region. The Company is actively engaged in discussions with respect to financing and potential equity partners. Gulfsands has no reserves in Iraq.
Gulf of Mexico, USA
The Company owns interests in 44 blocks comprising approximately 138,000 gross acres offshore Texas and Louisiana, which include 30 producing oil and gas fields with proved and probable working interest reserves at 31 December 2008 of 5.1 mmboe.
Certain statements included herein constitute "forward-looking statements" within the meaning of applicable securities legislation. These forward-looking statements are based on certain assumptions made by Gulfsands and as such are not a guarantee of future performance. Actual results could differ materially from those expressed or implied in such forward-looking statements due to factors such as general economic and market conditions, increased costs of production or a decline in oil and gas prices. Gulfsands is under no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable laws.
More information can be found on the Company's website www.gulfsands.com