Development drilling commences at Khurbet East Field
Development Area for Khurbet East Field approved
Exploration 3D seismic programme completed
London, 13th February 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 commenced
the drilling of its first development well within the Khurbet East
Field ("KHE-4") following the recent approval by the Syrian
Government for the development of the Khurbet East Field. The Company
is also now able to confirm that a 100 km2 area of Block 26 has now
been converted to the Development Area of Khurbet East Field
Additionally, the Company has successfully completed the 240 km²
"exploration" 3D seismic acquisition programme located to the south
of Khurbet East, and has commenced seismic processing and
interpretation of the data acquired in the recently completed Khurbet
East 3D seismic survey.
The KHE-4 well is a development well within the Cretaceous Massive
Reservoir near the KHE-1 location. Following the two successful
appraisal wells (KHE-2 and KHE-3), the KHE-4 well is the first well
on the Khurbet East Field that is planned and designed as a
development well. The KHE-4 well is located within 150 metres of the
KHE-1 discovery well surface location, near the currently mapped
crest of the structure. The Company plans to use the KHE-1 well for
oil and gas production from the deeper Kurrachine Dolomite and Butmah
Formations, with the KHE-4 well concentrating on production from the
Cretaceous Massive Formation.
The total drilling depth of the KHE-4 well is expected to be
approximately 1,950 metres and will require approximately 30 days to
drill and evaluate, at a gross cost including rig mobilization and
demobilization costs of approximately $1.8 million, or $900,000 net
Development Area Approval
Following the recent receipt of approval for the commercial
development of the Khurbet East Field (see announcement of 5 February
2008), the Syrian Ministry of Petroleum and Mineral Resources has
granted approval of the Company's application for establishment of
the Development Area. The 100 km2 Development Area will be operated
in partnership with the Syrian Petroleum Company ("SPC") through a
joint operating company.
As announced on 7 January 2008 the Company has completed a 150 km2 3D
seismic acquisition programme over the Khurbet East Field. The
Company has now commenced seismic processing and interpretation of
this newly acquired 3D seismic, which will be used in assisting in
the selection of additional development well locations in the Khurbet
East Field during 2008 and 2009, as well as identifying any
"near-field' exploration locations adjacent to the Field.
The Company has also completed the acquisition of a 240 km²
exploration 3D seismic programme located to the south of Khurbet
East. These data are expected to assist in maturing exploration
leads within the greater Khurbet East area into prospects suitable
for drilling. Seismic processing has commenced with interpretation to
begin upon delivery of the final data.
Gulfsands' CEO, John Dorrier, said:
"The commencement of the development drilling programme at Khurbet
East is a further significant milestone for the Company as we swiftly
move toward first oil production from the Field.
We also expect the 3D seismic survey south of Khurbet East to yield
high-quality exploration drilling prospects, and we anticipate that
one or more of these prospects should be drill-ready during 2008."
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.
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. The Company has also formed
a strategic partnership with Cham Holding for acquiring oil and gas
projects in Syria and Iraq.
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 54 offshore blocks comprising
approximately 193,000 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 2006 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 2006 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.
For further information, please refer to the Company's website
www.gulfsands.net or contact:
Gulfsands Petroleum (Houston) + 1-713-626-9564
John Dorrier, Chief Executive Officer
David DeCort, Chief Financial Officer
Gulfsands Petroleum (London) +44 (0)20-7182-4016
Kenneth Judge, Director of Corporate Development +44 (0)7733-001-002
Gulfsands Petroleum (Syria) +963-9-8888-7788
Mahdi Sajjad, President
Buchanan Communications Limited (London) +44 (0)20-7466-5000
Landsbanki Securities (UK) Limited (London) +44 (0)20-7426-9000
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