The Group's reserves at 31 December 2010 are based on estimates made by management and reviewed by independent petroleum engineers. For the Syrian assets the review was performed by Senergy (2009: Senergy), and for the USA by Netherland, Sewell & Associates, Inc ("NSAI") (2009: NSAI).
Working interest reserves in Syria represent the proportion, attributable to the Group's 50% participating interest, of forecast future crude oil production during the economic life of the Block 26 PSC, including the share of that production attributable to Syrian Petroleum Company ("SPC"). In assessing the economic life it has been assumed that the option is exercised to extend the development period of each field for a further 10 years after its initial 25 year development period has expired.
Working interest reserves in the USA represent the proportion, attributable to the Group's participating interests, of forecast future oil & gas production during the economic life of the properties in question, before deduction of state production taxes and overriding royalty interests. Working interest reserves have been derived from the net revenue interest reserves data contained in the NSAI report, by grossing up for the percentage production tax and royalty "burden" applicable to each property. The reserves-weighted average burden at 31 December 2010 was 20%.
Entitlement reserves in Syria represent the Group's estimated share of working interest reserves after deducting the share of forecast future production attributable to SPC. This proportion is impacted by assumptions as to future development expenditure and future oil prices. For the calculation as at 31 December 2010 the average price of Brent crude was assumed to be $80/bbl in 2011 and constant thereafter.
Entitlement reserves in the USA represent the Group's estimated net revenue interest reserves after deduction of the equivalent share of oil & gas production attributable to state production taxes and overriding royalty interests.
Working interest basis
| Syria | USA | Group Total | |||||
| Oil & | Oil & | Oil & | Oil & | ||||
| NGLs | Gas | NGLs | Gas | NGLs | Gas | NGLs | |
| mmbbls | bcf | mmbbls | bcf | mmbbls | bcf | mmboe | |
| As at 31 December 2010 | |||||||
| Proved | 30.5 | -- | 1.4 | 6.3 | 31.9 | 6.3 | 33.0 |
| Probable | 23.1 | -- | 0.5 | 1.7 | 23.6 | 1.7 | 23.9 |
| Proved & Probable | 53.6 | -- | 1.9 | 8.0 | 55.5 | 8.0 | 56.9 |
| Possible | 36.0 | -- | 0.1 | 1.1 | 36.1 | 1.1 | 36.3 |
| Proved, Probable & Possible | 89.6 | -- | 2.0 | 9.1 | 91.6 | 9.1 | 93.1 |
| Movements in Proved & Probable reserves during year | |||||||
| At 31 December 2009 | 46.0 | -- | 2.1 | 15.5 | 48.1 | 15.5 | 50.7 |
| Discoveries and additions | -- | -- | -- | -- | -- | -- | -- |
| Disposals | -- | -- | (0.1) | (6.7) | (0.1) | (6.7) | (1.2) |
| Revisions | 10.9 | -- | 0.1 | 0.5 | 11.1 | 0.5 | 11.1 |
| Less Production | (3.3) | -- | (0.2) | (1.3) | (3.5) | (1.3) | (3.7) |
| At 31 December 2010 | 53.6 | -- | 1.9 | 8.0 | 55.5 | 8.0 | 56.9 |
Entitlement basis
| Syria | USA | Group Total | |||||
| Oil & | Oil & | Oil & | Oil & | ||||
| NGLs | Gas | NGLs | Gas | NGLs | Gas | NGLs | |
| mmbbls | bcf | mmbbls | bcf | mmbbls | bcf | mmboe | |
| As at 31 December 2010 | |||||||
| Proved | 12.4 | -- | 1.1 | 4.9 | 13.5 | 4.9 | 14.3 |
| Probable | 7.5 | -- | 0.4 | 1.2 | 7.9 | 1.2 | 8.1 |
| Proved & Probable | 19.9 | -- | 1.5 | 6.1 | 21.4 | 6.1 | 22.4 |
| Possible | 11.4 | -- | 0.1 | 0.8 | 11.5 | 0.8 | 11.6 |
| Proved, Probable & Possible | 31.3 | -- | 1.6 | 6.9 | 32.9 | 6.9 | 34.0 |
| Movements in Proved & Probable reserves during year | |||||||
| At 31 December 2009 | 17.4 | -- | 1.6 | 11.7 | 19.0 | 11.7 | 21.0 |
| Discoveries and additions | -- | -- | -- | -- | -- | -- | -- |
| Disposals | -- | -- | (0.1) | (5.1) | (0.1) | (5.1) | (0.9) |
| Revisions | 3.8 | -- | 0.2 | 0.5 | 4.0 | 0.5 | 4.1 |
| Less Production | (1.3) | -- | (0.2) | (1.0) | (1.5) | (1.0) | (1.7) |
| At 31 December 2010 | 19.9 | -- | 1.5 | 6.1 | 21.4 | 6.1 | 22.4 |
Other Discovered Petroleum Initially-in-place
In addition management has made estimates of discovered in-place oil & gas volumes where there is not as yet any clear basis for commercial development. In each case the activity to date has been insufficient to generate any reliable estimate of recoverable element of these in-place volumes.
The table shows the volumes attributable to Gulfsands' working interest. The volumes applicable to Dougga Cretaceous Abiod were calculated by TRACS International Consultancy. In all other cases the estimates have not been subject to external independent audit.
Discovered Petroleum Initially-in-place volumes (working interest basis)
| Syria, Block 26 | Working interest 50% | P90 | P50 | P10 | |
| Khurbet East Triassic Kurrachine Dolomite1 | STOIIP | mmstb | 1.0 | 5.0 | 14.8 |
| Khurbet East Triassic Kurrachine Dolomite1 | GIIP | bcf | 1.2 | 6.1 | 17.7 |
| Khurbet East Triassic Butmah2 | GIIP | bcf | 3.8 | 25.4 | 125.7 |
| Syria Total | In-Place | mmboe | 1.8 | 10.3 | 38.7 |
| Tunisia, Kerkouane Permit | Working interest 30% | P90 | P50 | P10 | |
| Dougga Cretaceous Abiod3 | GIIP | bcf | 115.2 | 175.5 | 268.2 |
| Lambouka Cretaceous Abiod4 | GIIP | bcf | 31.2 | 72.6 | 157.5 |
| Tunisia Total | In-Place | mmboe | 24.4 | 41.4 | 71.0 |
| Total Discovered Petroleum Initially-in-place | mmboe | 26.2 | 51.6 | 109.6 | |
- Triassic Kurrachine Dolomite volatile oil accumulation located within Khurbet East field production licence area and discovered by well Khurbet East-1 (KHE-1) in 2007. In place volumes are Gulfsands estimates of oil and associated gas.
- Triassic Butmah gas accumulation located within Khurbet East field production licence area and discovered by well KHE-1 in 2007. In place volumes are Gulfsands estimates of raw gas which is assumed to contain 5% hydrogen sulphide (KHE-1 gas sample).
- Dougga Cretaceous Abiod and Allam wet gas accumulations located within the offshore Tunisia Kerkouane permit and discovered by Dougga-1 well drilled by Operator Shell in 1981. In place volumes are calculated by TRACS International Consultancy Ltd in 2011 and are of raw wet gas which is assumed to contain 30% carbon dioxide.
- Lambouka Cretaceous Abiod gas accumulation located within the offshore Tunisia Kerkouane permit and discovered by Lambouka-1 well drilled by Operator Audax in 2010. In place volumes are Gulfsands estimates of raw wet gas which is assumed to contain 30% carbon dioxide. Approximately 30-50% of in place volumes could lie in the Pantelleria permit offshore Italy (Gulfsands working interest 30%).