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News Releases
 May 15, 2006
Preliminary Results for the Year Ended 31 December 2005

 
Gulfsands Petroleum PLC (symbol GPX), the AIM listed oil and gas exploration, development and production company with activities in the USA, Syria and Iraq announces its preliminary results for the year ended 31 December 2005.

Financial Highlights
  • Turnover for the Group increased by 36% to $45,012,000 for the year ended 31 December 2005 as compared to $33,056,000 for the year ended 31 December 2004.

  • Operating Profit increased by 36% to $10,242,000 for the year ended 31 December 2005 as compared to $7,510,000 for the year ended 31 December 2004.

  • Pre-tax profit before exceptional items and after minority interest increased by 530% to $3,683,000 for the year ended 31 December 2005 (exceptional items included a one time charge of $6,080,000 relating to the partition of the former subsidiary Northstar Gulfsands LLC) as compared to $584,000 for the year ended 31 December 2004.

  • Cash in bank increased by 87% to $36,561,000 at 31 December 2005 as compared to $19,579,000 at 31 December 2004.

  • Net assets increased by 336% to $69,989,000 at 31 December 2005 as compared to $16,060,000 at 31 December 2004.

  • The Company completed an Initial Public Offering on the AIM market of the London Stock Exchange raising approximately $57 million after expenses.
Operational Highlights

Syria
  • An initial reserves study at 1 January 2006 was performed for the Tigris structure in Block 26, Syria in which the Group has a 50% working interest and is the operator. The study completed by Ryder Scott identifies gross probable reserves in the Tigris structure of 442 billion cubic feet of natural gas (BCFG). A further 442 BCFG was classified as possible reserves and a further 3447 BCFG as a prospective resource should this structure be gas bearing. Should the structure be oil bearing 104 million barrels of oil (MMBO) and 64 BCFG were classified as possible reserves and a further 408 MMBO and 245 BCFG as a prospective resource.

  • The Company increased its ownership in Block 26 in Syria from 20% to 50% and became the operator.

  • The Company executed two letters of intent for the drilling of the two first wells in Block 26, Syria.

  • The Company completed a 1,155 line kilometre 2D seismic programme in Block 26, Syria.
Gulf of Mexico, USA
  • Gulfsands successfully completed a restructuring of its 52.6% owned Gulf of Mexico subsidiary, Northstar Gulfsands LLC, whereby the Company now has direct ownership of approximately 52.6% of all the property interests formerly held by Northstar Gulfsands LLC.

  • In association with the partition of Northstar Gulfsands LLC the Company retired all of its debt and warrants associated with that entity leaving the Company debt free.

  • Proved and probable reserves in the USA Gulf of Mexico increased to 32.4 billion cubic feet of natural gas equivalents (BCFGE) as of 1 January 2006 as compared to 30.2 BCFGE at 1 November 2004. The net present value of those reserves at 1 January 2006 increased to $183 million as compared to $111 million at 1 November 2004.

  • In the USA Gulf of Mexico the Company's reserve additions replaced 269% of its 2005 produced oil and gas volumes.

  • The Company participated in the drilling of six offshore Gulf of Mexico exploration wells and four of those six have been discoveries. Subsequent to year-end the Company drilled another successful exploration well in January.
Iraq
  • The Company signed a Memorandum of Understanding on the Misan Gas Project in Iraq and increased its ownership interest to 100% from 85%.
Onshore Gulf Coast, USA
  • Proved and probable reserves in Darcy Energy LLC, owned 83% by the Company, for the onshore USA at 1 January 2006 were 1.6 BCFGE for a net present value of $9.5 million.

  • The Company drilled one onshore USA exploration well, which was a discovery.
Gulfsands' CEO, John Dorrier, said:

"In spite of reduced production from the Gulf of Mexico during the fourth quarter as a result of Hurricanes Rita and Katrina, the Company recorded strong increases in its financial and operational performance for the year. With further successes in drilling and field re-development, we anticipate continued strong growth in the Company's reserves base and in production for 2006 particularly during the second half of the year."


Enquiries:
Gulfsands Petroleum (Houston)
001-713-626-9564

David DeCort, Chief Financial Officer

College Hill (London)
020-7457-2020

Ben Brewerton
Nick Elwes

Teather & Greenwood (London)
020-7426-9000

James Maxwell (Corporate Finance)
Tanya Clarke (Specialist Sales)

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