| ||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 well within Block 26, Syria.|
Gulfsands, the operator and 50% working interest owner in Block 26, has commenced the drilling of the Souedieh North exploration well 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). The drilling and logging results for this well should be completed within the next 30 days. The net cost to Gulfsands for drilling and evaluating this well is approximately $800,000.
Gulfsands' CEO, John Dorrier, said:
"Souedieh North is the first well in our Block 26 exploration drilling campaign and will test a low cost, high potential prospect in a reservoir that is currently producing oil in adjacent fields. The Company utilized seismic analysis from the adjacent Souedieh Field to identify the prospect and drilling success here can be rapidly followed up in similar nearby prospects. Furthermore, the Company has a large inventory of independent prospects available for drilling during the coming months in its exploration and appraisal work in Block 26, including the Tigris structure which is expected to commence drilling this August."
Gulfsands Petroleum (Houston) 001-713-626-9564
David DeCort, Chief Financial Officer
College Hill (London) 020-7457-2020
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 approximately 216,000 gross acres which includes 39 producing oil and gas fields offshore Texas 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 present value of $183 million. Additionally, there is a further 2.8 BCFGE of possible recoverable reserves with a net present value of $15.8 million.
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 currently produce over 100,000 barrels of oil per day from existing fields. In January 2006 the Company completed the acquisition of 1,155 kilometers of 2D seismic and anticipates drilling two wells during 2006. The first well, known as Souedieh North, commenced drilling in late April 2006 and has the potential to contain in excess of 100 MMBO. The second well known as Tigris is scheduled to spud in August of 2006 and has the potential to contain in excess of 500 MMBOE. Gulfsands has identified 31 total exploitation and exploration prospects within Block 26 with mean resources potential exceeding 1 billion barrels of recoverable oil.
An independent reserves report was issued in January 2006 on the Tigris structure. The reserves were classified as either oil or gas bearing until such time as the Company drills and tests the Tigris structure. The reserve report concluded that there are 442 BCFG of probable recoverable reserves in the Tigris structure. Additionally, the report classified the possible reserves as either natural gas or oil. The gas case reflected an additional 442 BCFG in possible recoverable reserves and an additional 3447 BCFG as prospective resource. The oil case reflects 104 MMBO and 64 BCFG in possible recoverable reserves and a further 408 MMBO and 245 BCFG as prospective resource. In summary, the natural gas case equates to total recoverable reserves potential among probable reserves, possible reserves and prospective resource as 4330 BCFG (722 MMBOE), while the oil case equates to 512 MMBO and 308 BCFG (combined 563 MMBOE).
Gulfsands signed a Memorandum of Understanding in January 2005 with the Ministry of Oil in Iraq for the Misan Gas Project in Southern Iraq and is currently negotiating the definitive contract for the project. The project will gather, process and transmit natural gas that is currently a waste by-product of oil production in the region and will end the environmentally damaging practice of gas flaring. Gulfsands has completed a feasibility study and expects to conduct further technical work and commercial discussions with the Iraq Oil Ministry.
- Onshore USA
Gulfsands operates onshore in the USA through its 83% owned subsidiary company Darcy Energy LLC. As of 1 January 2006, Darcy Energy owned interests in two oil and gas fields onshore Texas, USA (Emily Hawes and Barb Mag) with proved and probable recoverable reserves of 1.6 BCFGE, consisting of 1.2 BCFG and 58,000 barrels of oil with a net present value of $9.5 million. Additionally, there is a further 2.2 BCFGE of possible recoverable reserves with a net present value of $7.9 million.
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