Final Results

Gulfsands Petroleum PLC
15 June 2005

                                                       
15 June 2005


Gulfsands Petroleum PLC
('Gulfsands' or 'the Group')



Full Year Results for the Year Ended 31st December 2004


Gulfsands Petroleum PLC (symbol GPX), the AIM listed oil and gas exploration,
development and production company with activities in the USA, Syria and Iraq
announces its results for the year ended 31 December 2004.


FINANCIAL HIGHLIGHTS


  • Net income increased to $1,622,000 (2003: loss of $2,437,000) primarily as
    a result of increased production in the Gulf of Mexico

  • Turnover increased to $33,056,000 (2003: $6,852,000)

  • Operating profit increased to $8,862,000 (2003: loss of $371,000)

  • Cash flow from operating activities increased to $14,802,000 (2003:
    $3,134,000)


OPERATIONAL HIGHLIGHTS

  • Average daily net working interest production for Northstar Gulfsands LLC,
    owned 52.6% by Gulfsands, increased from approximately 1,000 barrels of oil
    equivalent per day ('boepd') in 2003 to 5,000-6,000 boepd by year end 2004.

 • Proved and probable reserves within Northstar Gulfsands LLC, of which
    Gulfsands owns 52.6%,  increased significantly to 4.7 million barrels of oil
    ('mmbbls') and 29.2 billion cubic feet of natural gas ('bcf') as of 1
    November 2004 (2003: 2.4 mmbbls and 5.4 bcf).

  • Darcy Energy, owned 75% by Gulfsands, participated at a 25% working
    interest in a successful gas well in an onshore Texas gas re-development
    known as Emily Hawes.  First production is expected to commence early in the
    third quarter of 2005.


STRATEGIC HIGHLIGHTS

Since the year end, Gulfsands has:


  •    increased its ownership in Block 26, Syria from 20% to 50% and became
       the operator.

  •    participated in a new gas discovery on Eugene Island Block 83 in the
       Gulf of Mexico through its 52.6% ownership in Northstar Gulfsands LLC, 
       whereby Northstar Gulfsands LLC owns a 10% working interest in the well.



  •    signed a Memorandum of Understanding on the Misan Gas Project in Iraq
       and increased its interest to 100%.



  •    completed an Initial Public Offering on the Alternative Investment
       Market of the London Stock Exchange raising approximately $57 million 
       after expenses.



John Dorrier, CEO of Gulfsands Petroleum, said:



'This was a landmark year for Gulfsands.  We made pleasing progress financially,
operationally and strategically.  Turnover increased significantly, the Group
retained its first annual profit and there was a significant increase in oil and
gas reserves.



'The Group's activities in the USA Gulf of Mexico, Syria and Iraq continue to
provide significant potential for expansion during 2005 and beyond.'



Enquiries:
Gulfsands Petroleum (Houston)                  713-626-9564
David DeCort, Chief Financial Officer

College Hill (London)                          020-7457-2020
Ben Brewerton / Jim Joseph

Seymour Pierce (London)                        020-7107-8000
Richard Redmayne
Jonathan Wright



NB. Gulfsands Petroleum PLC did not acquire the share capital of Gulfsands
Petroleum Ltd. until after 31 December 2004, therefore the results presented are
the results of Gulfsands Petroleum Ltd. and its subsidiaries for the year ended
31 December 2004.




Operating Review



USA



During the year, Northstar Gulfsands LLC, a subsidiary company owned 52.6% by
Gulfsands, closed acquisitions in the USA Gulf of Mexico that doubled oil
reserves and increased natural gas reserves over five-fold bringing the total
number of fields in the Gulf in which Northstar Gulfsands owns an interest to 39
fields, with 8 of these fields operated by Northstar Gulfsands.  This expansion
of reserves, interests and operations at very competitive cost was the source of
large growth in asset value for the Group during 2004.



As a result, net production to Northstar Gulfsands increased from approximately
1,000 boepd to 5,000-6,000 boepd, resulting in large increases in both turnover
and net profit for the Group.  Gulfsands' financial performance was also helped
by very strong oil and gas prices during this period.



During 2004, the Group also established a subsidiary company, Darcy Energy, to
conduct onshore USA Gulf Coast field re-development and exploration.  Darcy
acquired interests in two onshore projects during the year and participated in
its first well in the Emily Hawes Field on Matagorda Island.  The Group expects
its first onshore production from these activities to commence during the third
quarter of 2005, and is actively reviewing additional re-development and
exploration projects for acquisition.



Syria



Subsequent to the end of 2004, the Group capitalized on an opportunity to
increase its interest in Block 26, located in northeast Syria, by purchasing
Devon Syria Ltd., holder of 80% interest in Block 26, following a corporate
decision by Devon to exit Syria.  Gulfsands has identified some 27 leads and
prospects in the Block with aggregated potential exceeding 1 billion barrels of
oil reserves.  Concurrent with the acquisition of the Devon interest, the Group
farmed-out a 50% interest in the Block to SoyuzNefteGas, a private Russian oil
and gas company.  Gulfsands is now operator of Block 26 and is actively
conducting the work program of seismic acquisition and expects to drill the
first exploration well in the Block by early 2006.



Iraq



In Iraq, the Group completed a Feasibility Study for the Misan Gas Project in
August 2004 and presented the final results to the Iraqi Oil Ministry in October
2004.  The Misan Gas Project is a midstream project that gathers gas that is
currently being flared at the oil fields in Southern Iraq, brings the gas to a
central processing plant to clean it of impurities and remove the light
hydrocarbon liquid fraction (Natural Gas Liquids), and then transmits the
natural gas for further distribution and use in Iraq.  The extracted hydrocarbon
liquids are then transmitted to a southern port for storage, offloading and
export.  The Group signed a Memorandum of Understanding with the Iraq Oil
Ministry on 5 January 2005 to continue cooperation on this project and to begin
discussion of a definitive contract during 2005. In May 2005, Gulfsands
increased its interest in the Misan Gas Project to 100%.



AIM Listing



The directors of the Group decided in 2004 to list its business on the London
Stock Exchange (AIM market) and began formalities to implement this resolution
during the second half of the year.  This process was completed in early April
2005 when Gulfsands Petroleum PLC's shares began trading in London.  The Group
placed approximately $57 million of new equity (net of expenses) at 130 pence
per share.  These new funds will enable the Group to re-structure the financing
in Northstar Gulfsands, conduct active exploration programs in the Gulf of
Mexico and Syria, and continue its business development activity in Iraq and in
particular the Misan Gas Project.



Outlook



In summary, 2004 was a very active and successful year for Gulfsands, resulting
in significant increase in oil and gas reserves, turnover of $33 million and a
net profit for the year.  In addition the Group's activities in the Gulf of
Mexico, Syria and Iraq continue to provide significant potential for expansion
during 2005 and beyond.



GULFSANDS PETROLEUM LTD. AND SUBSIDIAIRES

Consolidated Profit and Loss Account
For the years ended 31 December 2004 and 2003


(in thousands of U.S. dollars except earnings (loss) per share)

                                                                            2004                2003

Turnover                                                                 33,056               6,852
Cost of sales                                                           (19,485)             (3,954)
Write down of oil and gas properties                                          -                (900)
Gross profit                                                             13,571               1,998

General and administrative expenses                                      (4,602)             (2,262)
Write down of goodwill                                                     (107)               (107)
Administrative expenses                                                  (4,709)             (2,369)

Operating profit (loss)                                                   8,862                (371)

Investment Loss                                                            (675)                  -
Interest receivable                                                         143                  28
Interest payable                                                         (3,477)             (1,459)
Accretion of net present value of decommissioning
provision                                                                (1,352)               (327)

Profit (loss) on ordinary activities before taxation                      3,501              (2,129)

Tax on profit (loss) on ordinary activities                               1,038                   -

Profit (loss) on ordinary activities after taxation                       4,539              (2,129)

Minority interests                                                       (2,917)               (308)

RETAINED PROFIT (LOSS)                                                    1,622              (2,437)

Basic earnings (loss) per share                                            0.33               (0.50)
Diluted earnings (loss) per share                                          0.20               (0.50)



Consolidated Balance Sheets
At 31 December 2004 and 2003


(in thousands of U.S. dollars)

                                                                               2004                  2003
Fixed assets
Tangible fixed assets                                                       56,038                21,833
Intangible fixed assets                                                      2,629                 1,842
Investments                                                                      -                   463
                                                                            58,667                24,138

Current assets
Debtors: amounts falling due within one year                                 9,001                 3,132
Cash at bank and in hand                                                    19,579                 7,599
                                                                            28,580                10,731

Creditors: amounts falling due within one year                             (18,688)               (3,382)

Net current assets                                                           9,892                 7,349
Total assets less current liabilities                                       68,559                31,487

Debtors: amounts falling due after one year                                  1,748                     -
Creditors: amounts falling due after more than one year                    (29,947)              (11,826)
Provision for liabilities and charges                                      (16,427)               (2,889)
Equity minority interests                                                   (7,873)               (2,546)

NET ASSETS                                                                  16,060                14,226

Share capital                                                                    7                     7
Share premium account                                                       17,448                17,448
Revaluation reserve                                                              -                  (212)
Profit and loss account                                                     (1,395)               (3,017)

SHAREHOLDERS' FUNDS                                                         16,060                14,226



Consolidated Cash Flow Statement
For the years ended 31 December 2004 and 2003


(in thousands of U.S. dollars)
                                                                              2004                2003

Net cash inflow from operating activities                                  14,802               3,134

Interest received                                                             143                  28
Interest paid                                                              (2,916)             (1,354)
Net cash outflow from returns on investments and

servicing of finance                                                       (2,773)             (1,326)

Capital expenditure
Payments to acquire tangible fixed assets                                 (22,912)            (19,864)
Payments to acquire intangible fixed assets                                  (895)             (1,209)
Net cash outflow from capital expenditure                                 (23,807)            (21,073)

Financing
Issues of ordinary share capital                                            1,187              10,488
Contributions in subsidiary undertaking                                       160                 750
Issue costs of share capital                                                    -                (521)
Receipts from new loans                                                    35,236              14,134
Repayment of loans                                                        (12,825)             (1,646)
Net cash inflow from financing                                             23,758              23,205

Increase in cash                                                           11,980               3,940

Cash at bank and in hand, beginning of year                                 7,599               3,659
Cash at bank and in hand, end of year                                      19,579               7,599

Non-cash investing and financing
Non-cash capital contributions in subsidiary undertaking                    2,250                   -
Provision for decommissioning                                              17,000               2,562
Receipt of investment for oil and gas properties                                -                 675


Notes to the Summary Financial Statements:


The summary financial statements set out above have been extracted from the
Group's audited statements for the year ended 31 December 2004 and 2003 (not
presented herein). Those financial statements were prepared under the historical
cost convention in accordance with applicable UK accounting standards and with
the provisions of the Companies Act 1985 that would apply if these were
statutory financial statements, except that consolidated figures only have been
presented. In addition to the requirements of UK accounting standards, the
accounting for oil and gas exploration and production activities is guided by
the Statement of Recommended Practice (SORP) 'Accounting for Oil and Gas
Exploration, Development, Production and Decommissioning Activities', issued by
the UK Oil Industry Accounting Committee on 7 June 2001. The financial
information has been prepared in accordance with the provisions of the SORP.



These summary statements do not constitute financial statements in accordance
with UK accounting standards as they omit substantially all the disclosures
required.


The Annual Meeting of Shareholders will take place 11:00 A.M. on Friday, 5
August 2005 at the offices of College Hill Associates Limited located at 78
Cannon Street in London, England.  All shareholders are welcome to attend.  If
unable to attend, shareholders are encouraged to fill out the form of proxy and
return it to Computershare Investor Services PLC.



Note to Editors


   •    Gulf of Mexico, USA

The Group has a 52.6% interest in Northstar Gulfsands, which owns interests in
39 producing oil and gas fields offshore Texas and Louisiana and operates 8 of
those fields. Northstar Gulfsands has proved and probable reserves of 4.7 mmbbls
of oil and some 29.2 bcf of gas as of 1 November 2004.


   •     Syria

In Syria, Gulfsands owns a 50% working interest in Block 26 and is the operator.
The block covers 11,000 sq kms and surrounds areas which currently produce over
100,000 bopd from existing fields.  The Group is planning the acquisition of an
extensive 2D seismic programme and the drilling of the first well by the first
quarter of 2006. Gulfsands has identified 27 exploitation and exploration
prospects and leads with mean resources potential of 1 billion barrels of
recoverable oil.


   •    Iraq
      
Gulfsands has recently signed a Memorandum of Understanding with the Ministry of
Oil in Iraq for the Misan Gas Project in Southern Iraq and is currently
negotiating the definitive contract for the project.  The project will gather,
process and transmit natural gas that is currently a waste by-product of oil
production in the region and will end the environmentally damaging practice of
gas flaring. Gulfsands has completed a feasibility study and expects to conduct
further technical work and commercial discussions with the Iraq Oil Ministry in
the first half of 2005.


   •    Onshore USA

At the Emily Hawes field, which has previously produced approximately 1.7 bcf of
natural gas before being shut-in, gas production is expected to start during the
summer of 2005.  The first well in the Barb Mag oil field is expected to be
drilled in the third quarter of 2005.  Darcy Energy has a 25% and 37.5% working
interest in these fields respectively.




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