Khurbet East Drilling Update
For Immediate Release
23
April 2009
GULFSANDS PETROLEUM PLC
KHURBET EAST DRILLING UPDATE
London, 23rd April 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 Khurbet East No 8 well ("KHE-8") with an oil column
identified in what was originally anticipated to be a field
delineation well located on the southern limits of the Khurbet East
Field within Syria Block 26. Following acid stimulation, the KHE-8
well flowed oil under artificial lift at a stabilized rate of 617
barrels of oil per day ("bopd") and without lift assistance at
approximately 120 bopd. KHE-8 will therefore be suspended as a
future oil producer.
The Company is also pleased to confirm that the Khurbet East No 9
well ("KHE-9"), the next development well in the Khurbet East Field,
was spudded on 9th April.
KHE-8 Delineation Well
The KHE-8 well is located 2.7 kilometres to the south of KHE-1 and
was designed to provide geologic information on the southern limits
of the Khurbet East Field 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 2,013 metres and encountered
the top of the Cretaceous Massive reservoir at 1,940 metres.
Preliminary analysis of the wireline logs and drilling data indicates
that the well encountered a 23 metre gross (15 metre net) oil-bearing
interval within the Massive reservoir with average porosity in excess
of 23% over the net oil-bearing section. The top of the reservoir
was encountered approximately 18 metres shallower than the pre-drill
prediction. As has been the case with all wells drilled within the
Khurbet East Field, a definitive oil-water contact has not been
identified in this well as the primary reservoir section lies
directly above a relatively impermeable and low porosity section.
An open hole drill-stem test of the gross reservoir interval was
conducted using artificial lift with nitrogen injection resulting in
limited amounts of oil being produced to surface, indicative of
poorer reservoir quality than encountered in the central portion of
the field.
The rig was moved off location to commence drilling of the KHE-9
development well and acid stimulation of the KHE-8 gross reservoir
interval was conducted by a coil tubing operation. Post stimulation,
the well produced oil to surface under nitrogen lift during an 8 hour
initial flow period, achieving a stabilized rate of 617 bopd of 23
degrees API oil with 1-2% being bulk sediment and water ("BS&W").
Under natural flow, the well flowed at an average oil rate of
approximately 120 bopd over a 12 hour period through a 40/64 inch
choke with a BS&W of 1%. These test results suggest that some form of
artificial lift will be required to place this well on continuous
production, a practice that is standard for producing oil wells in
this region.
The KHE-8 well will now be suspended as a future oil producer.
KHE-9 Spudded
The KHE-9 well was spudded on 9th April and is located approximately
one kilometre south of KHE-1. KHE-9 will be the first of three
development wells planned to support the expansion of the early
production facility. The drilling and completion is likely to take 45
days to complete.
Ric Malcolm, Gulfsands CEO, said
"We are very pleased with the results of the KHE-8 well as it
demonstrates that the Khurbet East Field extends significantly
further south than previously interpreted and that commercially
attractive oil production rates can be achieved from wells located in
poorer reservoir quality some distance away from the central portion
of the field."
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.
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 Romney
RBC Capital Markets (London) +44 (0)20 7653 4804
Sarah Wharry
ABOUT GULFSANDS:
Gulfsands is listed on the AIM market of the London Stock Exchange.
Syria
Gulfsands owns a 50% working interest and is operator of Block 26 in
North East Syria. The Khurbet East oil field was discovered in June
2007 and commenced commercial production within 13 months of the
discovery. This field is currently producing more than 11,000 barrels
of oil per day through an early production facility. Block 26 covers
approximately 8,250 square kilometres and encompasses existing fields
which currently produce over 100,000 barrels of oil per day, and are
operated mainly by the Syrian Petroleum Company. The current
exploration licence expires in August 2010 and is extendable for a
further two years. Gulfsands' working interest reserves in Syria at
31 December 2008 were 28.7 mmbbls.
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, following completion of a feasibility study on the project, and
is negotiating details of a 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. The Company is
actively engaged in discussions with respect to financing and
potential equity partners. Gulfsands has no reserves in Iraq.
Gulf of Mexico, USA
The Company owns interests in 44 blocks comprising approximately
138,000 gross acres offshore Texas and Louisiana, which include 30
producing oil and gas fields with proved and probable working
interest reserves at 31 December 2008 of 5.1 mmboe.
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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