London, 28th April, 2014: Gulfsands Petroleum plc (“Gulfsands”, the “Group” or the “Company” – AIM: GPX), the oil and gas production, exploration and development company with activities in Syria, Morocco, Colombia, Tunisia and the U.S.A., is pleased to announce that it has finalised agreements with Morocco’s Office National des Hydrocarbures et des Mines (“ONHYM”) for the acquisition of the newly created Moulay Bouchta permit (“Moulay Bouchta”).
Gulfsands will operate the permit with a 75% participating interest while ONHYM will retain a 25% participating interest, the attributable cost of which will be carried by Gulfsands upon the usual terms for such participation, through the exploration phase of the permit.
The Moulay Bouchta permit encompasses an area of approximately 2,850 square kilometres and is located to the north of the Company’s Rharb Sud permit and extends eastwards to surround the western, northern and eastern boundaries of the Fes Block onshore in northern Morocco.
This area is considered to include the key remaining prospective acreage in an area where the existence of a working petroleum system has been confirmed with the discovery and development of three oil fields, the most recent of which was the Haricha Field which had produced a total of 2.8 million barrels of oil and 4.2 BcF of gas when production ceased in 1990.
The three legacy light oil fields are known to have produced oil from shallow reservoirs down to approximately 1200 metres while it is the Company’s intention to evaluate the potential for deeper and potentially larger structures containing Jurassic and Cretaceous aged reservoirs similar to targets identified on the adjacent Fes permit.
A portion of the permit area has already been the subject of a 175 square kilometre 3D seismic survey and these data together with legacy 2D seismic data over other portions of the licence area will be supplemented by regional seismic data previously acquired by the Company.
It is anticipated that in addition to the reprocessing and interpretation of legacy 2D and 3D seismic data, an additional 500 kilometres of 2D seismic data will be captured in a survey to be carried out during the first two year exploration period. The Company will also undertake a legacy oil field reactivation study during this first exploration period as part of a minimum exploration work programme expected to cost approximately US$3.5 million.
The signing of these agreements follows lengthy and constructive discussions with ONHYM which confirmed that considerable interest had been shown in this licence area as a consequence of historic production from the area, the presence of a number of light oil surface seeps and general location of the permit in relation to regional infrastructure.
With the award of this permit, the Company is understood to have captured acreage that includes the known light oil seeps that were not already covered in the Fes permit area on the eastern flank of the permit area. In addition, the Moulay Bouchta permit is also believed to contain Tertiary aged reservoirs that may contain biogenic gas accumulations similar to those that occur in the adjacent Rharb Centre permit area, where commercially viable natural gas accumulations are found at depths of approximately 800-2000 metres.
Commenting on the signing of the agreements to explore and exploit the Moulay Bouchta licence area, Mahdi Sajjad, Chief Executive Officer said:-
“We are delighted to have been able to conclude these agreements with our partner ONHYM with which we have developed an excellent working relationship since we commenced working in Morocco in January last year. Our reputation as a reliable and efficient operator across the MENA region and our success in moving swiftly to commence exploration operations in Morocco no doubt contributed to ONHYM’s willingness to award this important licence area to Gulfsands.
We view this licence area as prospective for oil and an important and complementary addition to our already extensive onshore portfolio and consider the award of this permit to reflect local recognition of the efforts our entire organisation has made in establishing a meaningful presence in Morocco in little more than one year. We are all very much looking forward to moving forward with successful exploration programmes on the more than 5,700 square kilometres of contiguous area that we now hold with the Fes, Moulay Bouchta and Rharb Sud permits.”
This release has been approved by Jason Oden, Gulfsands Vice President: Exploration who has a Bachelor of Science degree in Geophysics with 28 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 further information, please refer to the Company’s website www.gulfsands.com or contact:
+44 (0)20 7024 2130
Mahdi Sajjad, Chief Executive Officer
Kenneth Judge, Commercial Director
+44 (0)20 7466 5000
RBC Capital Markets
+44 (0)20 7653 4000
+44(0)20 7448 0200