|April 04, 2006|
Gulfsands Signs Rig Contracts for Block 26, Syria; First Exploration Well Expected to Spud by May 2006
|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 executed definitive agreements for the drilling of three exploration wells with the option to drill a further two wells within Block 26, Syria.|
Gulfsands, the operator and 50% working interest owner in Block 26, has taken assignment under an existing contract from another operator in Syria, for a drilling rig owned and operated by Crosco, a drilling company based in Croatia. Gulfsands will use this rig to drill and evaluate the Souedieh North well commencing in late April or early May 2006 with the option to drill another well within the block under this same agreement. Furthermore, the Company signed a definitive agreement with MB Drilling Overseas Limited for the drilling of two firm wells with a one well option. This rig will be used to drill to the deeper Palaeozoic prospects identified in Block 26, such as the Tigris structure which is scheduled for drilling in August 2006.
The Souedieh North well will be located in the northeast region of Block 26. This vertical well will be drilled to an approximate total depth of 7,216 feet with the primary objective being Cretaceous aged reservoirs similar to those producing in the adjacent Souedieh and Karachok oil fields. This prospect has the potential to contain in excess of 100 million barrels of recoverable oil (Gulfsands' internal estimate of potential). Gulfsands has commenced site preparations for the well, and expects a spud date on or about 1 May 2006. The net cost to Gulfsands for drilling and evaluating this well is approximately $800,000.
The Tigris well will also be located in the northeast region of the Block and is expected to spud in August 2006. The net cost to Gulfsands for drilling and evaluating this well is approximately $3.25 million. This vertical well will be drilled to a total depth of nearly 15,000 feet with the primary objectives being a series of Palaeozoic (Carboniferous and Devonian) sandstone reservoirs. The Tigris structure is directly underlying the Souedieh oil field (the largest known oil field in Syria), where oil is produced from the shallower Cretaceous reservoirs. Wireline log evaluation of an existing well on the structure drilled some years ago has identified pay zones within the objective reservoirs, and the Tigris-1 well is designed to evaluate these reservoirs and appraise this probable hydrocarbon accumulation. Gulfsands announced on 30 January 2006 the results of a reserves study by Ryder Scott Company, L.P. (Ryder Scott), an independent petroleum engineering firm, on the Tigris structure. Ryder Scott developed two cases for this evaluation, an oil case and a gas case, as there was not sufficient data available at the time to determine the expected hydrocarbon fluid contained within the Tigris structure. This reserves study as of 1 January 2006 classified recoverable Probable and Possible Reserves and Prospective Resource as follows:
"Gulfsands is constantly seeking ways of accelerating its schedules and controlling the costs of exploration drilling. These drilling arrangements represent an important achievement in the current market. The relatively low-cost and high potential of these two drilling projects remains a very attractive exploitation of the Company's significant inventory of drilling opportunities."
Gulfsands Petroleum (Houston) 001-713-626-9564
David DeCort, Chief Financial Officer
College Hill (London) 020-7457-2020
Ben Brewerton / Nick Elwes
Seymour Pierce (London) 020-7107-8000
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