KHE-7 Drilling update 3D Seismic Programme
Immediate Release 15 January 2009
GULFSANDS PETROLEUM PLC
KHE-7 Drilling update
3D Seismic Programme
London, 15th January 2009: 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 drilling operations have
been completed on the Khurbet East No 7 well ("KHE-7"), with an oil
column identified in this planned water disposal well located on the
northern limits of the Khurbet East Field within Syria Block 26. The
Company also announces the commencement of a 640 square kilometre 3D
seismic programme that is expected to assist the Company in
identifying additional opportunities in the area of Block 26 which
now includes the Khurbet East and Yousefieh discoveries.
Drilling update in Syria
The KHE-7 well was designed to provide geologic information on the
northern limits of the Khurbet East Field, establish the oil-water
contact and to be available to serve as a disposal well for the water
that is expected to be eventually produced in conjunction with oil
production from the Khurbet East Field.
The well was drilled to a total depth of 2,060 metres and encountered
the top of the Cretaceous Massive reservoir at approximately 1978
metres. Good oil shows were encountered while drilling through the
upper 7 metres of the reservoir and gradually diminished over the
next 13 metres.
The reservoir porosities encountered in the KHE-7 well were measured
to be mainly in the range of 5% to 10%, which are significantly lower
than the exceptional reservoir properties encountered in the central
portion of the Field where porosities are in the range of 16 - 20%.
Variations in reservoir properties such as these are not unusual in
carbonate reservoir systems and this new information, combined with
the production history to date, will be important in developing a
more refined reservoir model.
Preliminary analysis of the wireline logs has been unable to directly
establish an oil-water contact due to the generally higher
resistivities measured in this lower porosity reservoir. Although the
oil-water contact was not directly determined by the wireline logs,
preliminary analysis of these logs and the drilling data together
indicates that the oil-water contact in the field may be slightly
deeper and the field may extend further north than previously
interpreted.
A drill-stem test was not undertaken at KHE-7, but has been suspended
for further evaluation which may include production testing and
eventual use as a water disposal well. To date only trace amounts of
water have been produced from the Khurbet East Field.
3D Seismic Acquisition Programme
Acquisition has also commenced on a 640 square kilometre 3D seismic
programme that is designed to provide contiguous data coverage over a
large area surrounding the recent Khurbet East and Yousefieh oil
discoveries. The seismic data acquired will complement and expand the
area previously surveyed by 3D seismic and assist in delineating
already identified leads in the region and provide more information
on the new stratigraphic play that has been identified in an area
that now includes the Yousefieh discovery. The 3D seismic programme
is expected to be completed in approximately 5 months, with final
processed data available during the third quarter of this year.
Gulf of Mexico Update
Oil and gas production from the Gulf of Mexico is continuing to
recover from the disruptions due to Hurricane Ike, with working
interest production now at approximately 950 barrels of oil
equivalent per day (boepd) approximately 50% of the rate prior to
the disruptions. Repairs to third party pipeline infrastructure are
ongoing, and a return to pre-hurricane production levels is not
expected until the second quarter.
This release has been approved by Richard Malcolm, Chief Executive of
Gulfsands Petroleum Plc who has a Bachelor of Science degree in
Geology with 29 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.
Ric Malcolm, Chief Executive said:
"We are very pleased to have encountered oil in this well and with
the evaluation we have carried out to date, providing us with
valuable information on the characteristics of the reservoir in the
northern part of the Field. This represents a good start to the busy
year ahead. This important information and the continued remarkable
production performance of the Khurbet East Field ensures we are
looking forward with some anticipation to receipt of the reserves
re-evaluation which should be completed during the first quarter of
2009.
The data being acquired in the 3D seismic programme currently
underway is also going to be eagerly awaited as we expect it to
provide us with new information to enable us to pursue the new
stratigraphic play that has been identified by the Yousefieh-1 oil
discovery."
For more information please contact:
Gulfsands Petroleum (London) +44 (0)20 7434 6060
Ric Malcolm, Chief Executive Officer
Kenneth Judge, Director of Corporate Development +44 (0)7733 001 002
& Communications
Buchanan Communications Limited (London) +44 (0)20-7466-5000
Bobby Morse
Ben Willey
Sam Bottrill
RBC Capital Markets (London) +44 (0)20-7653 4804
Andrew K. Smith
Sarah Wharry
ABOUT GULFSANDS:
Gulfsands is listed on AIM.
Syria
Gulfsands owns a 50% working interest and is operator of Block 26 in
North East Syria. The Khurbet East oil field was discovered
following the completion of drilling of the KHE-1 well in June 2007
and commenced commercial production within 13 months of the
discovery. This field is currently producing more than 10,000 barrels
of oil per day through the Khurbet East Early Production Facility
(EPF). 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. On 23 August 2007, the Company initiated the
first extension period of exploration on Block 26 for a further
period of three years.
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 48 offshore blocks comprising
approximately 168,000 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 2007 of
41.5 BCFGE (6.9 MMBOE), consisting of 27.3 BCFG and 2.36 MMBO.
Onshore USA
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 2007 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.
More information can be found on the Company's website
www.gulfsands.com
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