Gulfsands Petroleum Regulatory News (GPX)

26 Apr 2006 07:01

Gulfsands Petroleum PLC26 April 2006 26 April 2006 Gulfsands Petroleum PLC ("Gulfsands" or "the Company") Gulfsands Commences Drilling Souedieh North Well in Block 26, Syria Gulfsands Petroleum PLC (symbol GPX), the AIM listed oil and gas exploration,development and production company with activities in the USA, Syria and Iraq,announced today that the Company has commenced drilling the Souedieh North wellwithin Block 26, Syria. Gulfsands, the operator and 50% working interest owner in Block 26, hascommenced the drilling of the Souedieh North exploration well located in thenortheast region of Block 26. This vertical well will be drilled to anapproximate total depth of 7,216 feet with the primary objective beingCretaceous aged reservoirs similar to those producing in the adjacent Souediehand Karachok oil fields. This prospect has the potential to contain in excessof 100 million barrels of recoverable oil (Gulfsands' internal estimate ofpotential). The drilling and logging results for this well should be completedwithin the next 30 days. The net cost to Gulfsands for drilling and evaluatingthis well is approximately $800,000. Gulfsands' CEO, John Dorrier, said: "Souedieh North is the first well in our Block 26 exploration drilling campaignand will test a low cost, high potential prospect in a reservoir that iscurrently producing oil in adjacent fields. The Company utilized seismicanalysis from the adjacent Souedieh Field to identify the prospect and drillingsuccess here can be rapidly followed up in similar nearby prospects.Furthermore, the Company has a large inventory of independent prospectsavailable for drilling during the coming months in its exploration and appraisalwork in Block 26, including the Tigris structure which is expected to commencedrilling this August." Enquiries: Gulfsands Petroleum (Houston) 001-713-626-9564 David DeCort, Chief Financial Officer College Hill (London) 020-7457-2020 Ben Brewerton Teather & Greenwood (London) 020-7426-9000 James Maxwell (Corporate Finance) Tanya Clarke (Specialist Sales) Note to Editors • Gulf of Mexico, USA The Company owns interests in 64 offshore blocks comprising approximately216,000 gross acres which includes 39 producing oil and gas fields offshoreTexas and Louisiana with proved and probable recoverable reserves of 32.4 BCFGE,consisting of 19.8 BCFG and 2.1 MMBO as of 1 January 2006 with a net presentvalue of $183 million. Additionally, there is a further 2.8 BCFGE of possiblerecoverable reserves with a net present value of $15.8 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 currentlyproduce over 100,000 barrels of oil per day from existing fields. In January2006 the Company completed the acquisition of 1,155 kilometers of 2D seismic andanticipates drilling two wells during 2006. The first well, known as SouediehNorth, commenced drilling in late April 2006 and has the potential to contain inexcess of 100 MMBO. The second well known as Tigris is scheduled to spud inAugust of 2006 and has the potential to contain in excess of 500 MMBOE.Gulfsands has identified 31 total exploitation and exploration prospects withinBlock 26 with mean resources potential exceeding 1 billion barrels ofrecoverable oil. An independent reserves report was issued in January 2006 on the Tigrisstructure. The reserves were classified as either oil or gas bearing until suchtime as the Company drills and tests the Tigris structure. The reserve reportconcluded that there are 442 BCFG of probable recoverable reserves in the Tigrisstructure. Additionally, the report classified the possible reserves as eithernatural gas or oil. The gas case reflected an additional 442 BCFG in possiblerecoverable reserves and an additional 3447 BCFG as prospective resource. Theoil case reflects 104 MMBO and 64 BCFG in possible recoverable reserves and afurther 408 MMBO and 245 BCFG as prospective resource. In summary, the naturalgas case equates to total recoverable reserves potential among probablereserves, possible reserves and prospective resource as 4330 BCFG (722 MMBOE),while the oil case equates to 512 MMBO and 308 BCFG (combined 563 MMBOE). • 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 in the USA through its 83% owned subsidiary companyDarcy Energy LLC. As of 1 January 2006, Darcy Energy owned interests in two oiland gas fields onshore Texas, USA (Emily Hawes and Barb Mag) with proved andprobable recoverable reserves of 1.6 BCFGE, consisting of 1.2 BCFG and 58,000barrels of oil with a net present value of $9.5 million. Additionally, there isa further 2.2 BCFGE of possible recoverable reserves with a net present value of$7.9 million. This information is provided by RNS The company news service from the London Stock Exchange