|May 21, 2008|
Gulfsands participates in successful well at Eugene Island 57
|London, 21st May 2008: Gulfsands Petroleum plc ("Gulfsands", the "Group" or the "Company" - AIM: GPX), the oil and gas production, exploration and development company with activities in Syria, Iraq, and the U.S.A., is pleased to announce that the Company has discovered natural gas in multiple pay zones in the EI57 #16 well, located in the Eugene Island protraction area within the Gulf of Mexico. |
The EI57 #16 well was drilled to a total measured depth of 12,542' (12,260' TVD). Gulfsands' preliminary analysis of the well logs indicates total net pay of approximately 95' from multiple pay zones within high quality Miocene aged reservoirs. The hydrocarbons encountered are natural gas with associated condensate. Production casing has been set and the well is being prepared for tie-in to the EI57 offshore platform.
Gulfsands owns a 24.99% working interest in the EI57 #16 well. Total cost to drill and run production casing was approximately $5.97 million (Gulfsands net $1.49 million). Total estimated cost to run a gravel pack completion and install a pipeline and surface facilities is approximately $5 million (Gulfsands net $1.25 million). Production from this well is expected to commence in August 2008.
Andrew West, Chairman of Gulfsands Petroleum, said:
"We are very pleased with the results of the EI57 #16 well, and the expected rapid tie-in to the EI57 platform is particularly attractive in the current product price environment."
This release has been approved by Jason Oden, Gulfsands Exploration Manager, who has a Bachelor of Science degree in Geophysics with 23 years of experience in petroleum exploration and management and is registered as a Professional Geophysicist. Mr. Oden has consented to the inclusion of the technical information in this release in the form and context in which it appears.
For more information please contact:
Gulfsands Petroleum (London)
Kenneth Judge, Director of Corporate Development
Buchanan Communications Limited (London)
RBC Capital Markets (London)
+44 (0)20-7653 4804
Andrew K. Smith
Gulfsands is listed on AIM.
Gulfsands owns a 50% working interest and is operator of Block 26 in North East Syria. Block 26 covers approximately 8,250 square kilometres and encompasses existing fields which currently produce over 100,000 barrels of oil per day. These fields are operated mainly by the Syria Petroleum Company. In the first half of 2007 Gulfsands announced an oil and gas discovery on Block 26 called Khurbet East. This discovery is currently under development with first production targeted for the fourth quarter of 2008. On 23 August 2007, the Company initiated the first extension period of exploration on Block 26 for a further period of three years.
Gulfsands signed a Memorandum of Understanding in January 2005 with the Ministry of Oil in Iraq for the Maysan Gas Project in Southern Iraq and following completion of a feasibility study on the project is negotiating details of definitive contract for this regionally important development. The project will gather, process and transmit natural gas that is currently a waste by-product of oil production and as a result of the present practice of gas flaring, contributes to significant environmental damage in the region.
Gulf of Mexico, USA
The Company owns interests in 48 offshore blocks comprising approximately 168,000 gross acres which includes numerous producing oil and gas fields offshore Texas and Louisiana with proved and probable recoverable reserves net to Gulfsands at 31 December 2007 of 41.5 BCFGE (6.9 MMBOE), consisting of 27.3 BCFG and 2.36 MMBO.
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 Mag Field) with proved and probable recoverable reserves net to Gulfsands at 31 December 2007 of 3.1 BCFGE (0.5 MMBOE), consisting of 2.8 BCFG and 57,000 barrels of oil.
Certain statements included herein constitute "forward-looking statements" within the meaning of applicable securities legislation. These forward-looking statements are based on certain assumptions made by Gulfsands and as such are not a guarantee of future performance. Actual results could differ materially from those expressed or implied in such forward-looking statements due to factors such as general economic and market conditions, increased costs of production or a decline in oil and gas prices. Gulfsands is under no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable laws.
More information can be found on the Company's website www.gulfsands.net.
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