|August 10, 2010|
Tunisia Drilling Update
London, 10th August, 2010: 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, Tunisia, Italy and the U.S.A., is pleased to announce that ADX Energy Ltd (ASX:ADX) the operator of the Kerkouane Exploration Licence offshore Tunisia (Kerkouane Licence) and the adjacent Pantelleria Exploration Permit in Southern Italy (G.R15.PU, known as the Pantelleria Permit) has provided the following information on drilling operations on the Lambouka-1 well in a news release made earlier today in Australia.
Activities during past week:
The 16" hole section was successfully drilled to a total depth of 1,476 meters MD. This section of the well was deepened from the originally planned 1341m in order to set casing in a competent shale formation thereby ensuring the integrity of the cement job on the 13 3/8" casing. Preparations to run the 13 3/8" casing then commenced.
Activities in the week ahead:
Drilling activities in the week ahead will include setting and cementing the 13 3/8" casing and then drilling the 12 _" hole to the predicted base of the Birsa Sandstone formation.
Gulfsands' is acquiring a 30% participating interest in the Kerkouane Licence and Pantelleria Permit. Gulfsands also expects to participate in the drilling of another exploration well before the end of 2010 in the onshore Chorbane permit, to earn a 40% participating interest (see announcement of 18th May 2010).
This release has been approved by Richard Malcolm, Chief Executive of Gulfsands Petroleum Plc who has a Bachelor of Science degree in Geology with 30 years of experience in petroleum exploration and management. Mr. Malcolm 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) +44 (0)20 7434 6060
Richard Malcolm, Chief Executive Officer
Andrew Rose, Chief Financial Officer
Kenneth Judge, Director: Corporate Development & Communications
Buchanan Communications Limited (London) +44 (0)20 7466 5000
RBC Capital Markets (London) +44 (0)20 7653 4000
Gulfsands is listed on the AIM market of the London Stock Exchange.
Gulfsands owns a 50% working interest and is operator of Block 26 in North East Syria. The Khurbet East oil field was discovered in June 2007 and commenced commercial production within 13 months of the discovery. This field is producing at an average gross production rate of approximately 18,000 barrels of oil per day through an early production facility. A second field discovery, the Yousefieh field, was brought on-stream in April 2010, and is currently producing 2,000 barrels of oil per day. Block 26 covers approximately 8,250 square kilometres and encompasses existing fields which currently produce over 100,000 barrels of oil per day, and are operated mainly by the Syrian Petroleum Company. The current exploration license expires in August 2010 and is extendable for a further two years. Gulfsands' working interest 2P reserves in Syria at 31 December 2009 were 46.0 mmbbls.
Gulfsands is acquiring working interest positions in two exploration permits in Tunisia (Chorbane and Kerkouane Permits) and one exploration permit in Southern Italy (G.R15.PU) from ADX Energy Ltd the operator of all three permits. The Company's interest in these permits remains subject to the completion of the Company's farm obligations and various approvals from the governments of Tunisia and Italy.
Kerkouane Permit - Offshore Tunisia
G.R15.PU Permit (Pantelleria Permit) - Offshore Italy
G.R15.PU, is located offshore the island of Pantelleria southwest of Sicily in Italian waters and the Kerkouane Permit is located offshore northeast Tunisia. The two permits are contiguous and comprise a total area of approximately 4500 square km.
The operator has identified multiple leads and targets on these permits and drilling is currently underway on the most significant of these targets which is the Lambouka Prospect, a large horst block containing multiple reservoir targets. The operator has estimated that the Lambouka Prospect has mean estimated resources of 270 mmboe.
Gulfsands' work commitment for the Kerkouane Permit includes the drilling of the Lambouka-1 exploration well which is currently underway. Gulfsands will earn a 30% working interest in both permits by paying approximately 35% of the cost the Lambouka-1 well and reimbursing the operator for a portion of various pre-drill costs that include a recently completed 3D seismic programme. The cost of Gulfsands' farm-in obligations to earn a 30% interest in these permits is estimated to be approximately US$9 million.
Chorbane Permit - Onshore Tunisia
The Chorbane permit is located in central Tunisia and covers an area of 2,428 square km. The permit is surrounded by several producing oil fields and extensive oil & gas infrastructure. Gulfsands' forward work commitment for the Chorbane permit includes the drilling of one exploration well in the fourth quarter of 2010 for which Gulfsands will pay 80% of the estimate US$5 million cost of the first exploration well so as to earn a 40% interest in the permit.
A number of prospects and leads have been indentified within the permit, the most prospective being a large tilted horst block ("Sidi Daher") where the operator has identified multiple potential targets estimated to hold recoverable un-risked prospective resources of 80 mmboe.
Gulfsands signed a Memorandum of Understanding in January 2005 with the Ministry of Oil in Iraq for the Maysan Gas Project in Southern Iraq, following completion of a feasibility study on the project, and is negotiating details of a 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. The Company is actively engaged in discussions with respect to financing and potential equity partners. Gulfsands has no reserves in Iraq.
Gulf of Mexico, USA
The Company owns interests in 37 leases offshore Texas and Louisiana, which include 24 producing oil and gas fields with proved and probable working interest reserves at 31 December 2009 of 4.7 mmboe.
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.com
More information on the Company can be found on the Company's website www.gulfsands.com
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