Gulfsands Petroleum Regulatory News (GPX)

30 Apr 2007 07:02

Gulfsands Petroleum PLC30 April 2007 USA Reserves Update • Proved and probable reserves increase by 31% • Reserve replacement equal to 389% of 2006 production • NPV of proved and probable reserves at $197 million London, 30th April, 2007: Gulfsands Petroleum plc (AIM: GPX) ("Gulfsands" or "the Company"), the oil and gas production, exploration and development companywith activities in the U.S.A., Syria and Iraq, is pleased to provide an updatedreserves study as of 31 December 2006 for Gulfsands' USA oil and gas properties. Proved and probable reserves in the USA increased by 31% to 44.6 billion cubicfeet of natural gas equivalents (BCFGE), or 7.4 million barrels of oilequivalents (MMBOE), as of 31 December 2006 compared to 34 BCFGE as of 31December 2005. The net present value (NPV) of the proved and probable reservesas of 31 December 2006 discounted at 10% totals $197 million with 84% of the NPVin the proven reserves. Gulfsands' reserve additions for the 2006 calendar year replaced 389% of its2006 produced oil and gas volumes. Produced oil and gas volumes for 2006 were3.67 BCFGE. Shown below is a table that summarizes current reserves as of 31 December 2006in the USA on a net revenue interest (working interest less all royalties) basisto Gulfsands. Proved + Probable Possible Total (BCFGE) (MMBOE) (BCFGE) (MMBOE) (BCFGE) (MMBOE) Gulf of Mexico 41.5 6.9 2.1 0.3 43.6 7.2 Onshore Gulf Coast 3.1 0.5 4.7 0.8 7.8 1.3 Total 44.6 7.4 6.8 1.1 51.4 8.5 Gulf of Mexico Reserves Gulfsands commissioned Netherland, Sewell & Associates Inc. to provide areserves report for the USA offshore Gulf of Mexico oil and gas properties as of31 December 2006. This reserve report reflected an increase in overall reservesprimarily associated with extensive workover and recompletion work on many ofthe properties. The reserves report states that Gulfsands' Gulf of Mexicoproperties contain proved and probable reserves of 41.5 BCFGE, consisting of27.3 billion cubic feet of natural gas (BCFG) and 2.36 million barrels of oil(MMBO). On an oil barrel equivalent basis this represents 6.9 MMBOE. Thereport further classifies an additional 2.1 BCFGE of possible recoverablereserves. The NPV at 31 December 2006 of the proved and probable reserves discounted at anannual rate of 10% is $185 million (86% of net present value is in provenreserves). The NPV of the possible reserves was $9.8 million. Onshore Gulf Coast Reserves Collarini Associates completed a reserves report for the USA onshore Gulf Coastoil and gas properties of the Company at 31 December 2006. This reserve reportalso reflected an increase in overall reserves. The reserves report states thatGulfsands' onshore properties contain proved and probable reserves of 3.1 BCFGE,consisting of 2.8 BCFG and 57,000 barrels of oil. The report further classifiesan additional 4.7 BCFGE of possible recoverable reserves, consisting of 4.6 BCFGand 24,000 barrels of oil. The NPV of the proved and probable reserves discounted at an annual rate of 10%,is $11.8 million and the NPV of the possible reserves is $11.2 million. Gulfsands' CEO, John Dorrier, said: "The increases in our USA reserves have exceeded our expectations with aresulting increase in their value despite lower commodity prices." NB: This release has been approved by Jason Oden, Gulfsands Exploration Manager,who has a Bachelor of Science degree in Geophysics with 22 years of experiencein petroleum exploration and management and is registered as a ProfessionalGeophysicist. Mr. Oden has consented to the inclusion of the material in theform and context in which it appears. Oil prices are based on 31 December 2006, NYMEX West Texas Intermediate futuresprices and are adjusted by field for quality, transportation fees, and regionalprice differentials. Gas prices are based on the 31 December 2006, NYMEX HenryHub futures prices and are adjusted by field for energy content, transportationfees, and regional price differentials. ABOUT GULFSANDS: Gulf of Mexico, USA The Company owns interests in 54 offshore blocks comprising approximately193,000 gross acres which includes numerous producing oil and gas fieldsoffshore Texas and Louisiana with proved and probable recoverable reserves netto Gulfsands at 31 December 2006 of 41.5 BCFGE (6.9 MMBOE), consisting of 27.3BCFG and 2.36 MMBO. Onshore USA Gulfsands owns interests in two oil and gas fields onshore Texas, USA (98.5%working interest in Emily Hawes Field and 37.5% working interest in Barb MagField) with proved and probable recoverable reserves net to Gulfsands at 31December 2006 of 3.1 BCFGE (0.5 MMBOE), consisting of 2.8 BCFG and 57,000barrels of oil. Syria Gulfsands owns a 50% working interest and is operator of Block 26 in North EastSyria. Block 26 covers 11,000 square kilometres and encompasses existing fieldswhich currently produce over 100,000 barrels of oil per day. These fields areoperated by third parties including the Syria Petroleum Company. 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 followingcompletion of a feasibility study on the project is negotiating details ofdefinitive contracts for this regionally important development. The project willgather process and transmit natural gas that is currently a waste by-product ofoil production and as a result of the present practice of gas flaring,contributes to significant environmental damage in the region. Certain statements included herein constitute "forward-looking statements"within the meaning of applicable securities legislation. These forward-lookingstatements are based on certain assumptions made by Gulfsands and as such arenot a guarantee of future performance. Actual results could differ materiallyfrom those expressed or implied in such forward-looking statements due tofactors such as general economic and market conditions, increased costs ofproduction or a decline in oil and gas prices. Gulfsands is under no obligationto update or revise any forward-looking statements, whether as a result of newinformation, future events or otherwise, except as required by applicable laws. For further information on the USA reserves report and the Company's recentinvestor presentation, please refer to the Company's website www.gulfsands.netor contact: Gulfsands Petroleum (Houston) + 1-713-626-9564John Dorrier, Chief Executive OfficerDavid DeCort, Chief Financial Officer Gulfsands Petroleum (London) 020-7182-4016Kenneth Judge, Director of Corporate Development 07733-001-002 College Hill (London) 020-7457-2020Nick ElwesPaddy Blewer Teather & Greenwood (London) 020-7426-9000James Maxwell (Corporate Finance)Tanya Clarke (Specialist Sales) This information is provided by RNS The company news service from the London Stock Exchange