OIL DISCOVERY AT YOUSEFIEH-1
Immediate Release 19 November 2008
GULFSANDS PETROLEUM PLC
OIL DISCOVERY AT YOUSEFIEH-1, BLOCK 26, SYRIA.
PRODUCTION MILESTONE AT KHURBET EAST OIL FIELD, SYRIA
London, 19th November 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 an oil discovery at the
Yousefieh-1 well in the Gulfsands' operated Block 26, Syria. In
addition, the Company is delighted to confirm that cumulative oil
production from the Khurbet East Field (the "Field") has now exceeded
one million barrels.
YOUSEFIEH-1 OIL DISCOVERY:
The Yousefieh-1 well, located approximately 3 kilometres from the
Khurbet East Early Production Facility in Block 26, Syria, has
encountered 63 metres of net oil pay in the target Cretaceous
reservoir system and flowed oil to surface under natural flow at
approximately 900 barrels of oil per day ("bopd").
Yousefieh-1 well was drilled to a total vertical depth of 2139 metres
and encountered the target Cretaceous reservoirs at a slightly
shallower depth than the pre-drill prediction and based on
preliminary wire-line log evaluation, the well encountered an oil
column of approximately 64 metres, with approximately 63 metres of
net oil pay and average porosity of 18.6%.
A drill stem test ("DST") was conducted over the top 19 metre
interval, flowing oil to surface under natural flow and through a
48/64 inch choke, at an average rate of approximately 900 barrels per
day over a 3 hour period with no water produced. While preparing for
the main flow period of the DST, the well produced, with the
assistance of gas lift, at an average rate of approximately 1,450
barrels per day through a 95/64 inch choke over a 3 hour period. The
preliminary results of the test indicate very good reservoir
permeability.
Preliminary well site analyses indicate the oil gravity is
approximately 23 degrees API, similar to the on-site analysis carried
out upon discovery of oil at KHE-1. Core recovery operations were
successfully completed over the entire reservoir interval and the
information obtained from these cores, together with the wire-line
log information and results of the DST will provide valuable
information for the further appraisal of this discovery.
The Yousefieh-1 well was an exploration well designed to evaluate a
stratigraphic trap in this portion of Block 26 unlike the structural
trap of the Khurbet East Field. The Company is currently preparing
plans to undertake an extensive 3D seismic data acquisition programme
to assist in the delineation of leads and prospects in the areas
surrounding the Khurbet East Field and the Yousefieh-1 discovery.
The Yousefieh-1 well will now be suspended and the rig moved to the
Khurbet East Field to drill a delineation well at the north end of
the Khurbet East Field with the aim of establishing the oil water
contact and also with the potential to be used later as a water
disposal well. A more extensive production testing programme over the
reservoir section of the Yousefieh well is expected to commence in
the next few weeks.
KHURBET EAST FIELD, BLOCK 26, SYRIA:
Production of oil from the Khurbet East Field has just passed an
important milestone with confirmation over the recent weekend that
production from the Field has passed a cumulative one million barrels
since the commencement of production in July from the Early
Production Facility built in cooperation with the Syrian Petroleum
Company.
The Khurbet East Field is continuing to average production of
approximately 11,500 bopd from 5 wells (2 horizontal and 3 vertical
producers) with only trace amounts of water. Pressure monitoring of
the producing wells indicates there continues to be only minimal
reservoir pressure reduction.
As a consequence of the better than expected performance of the
Khurbet East Field, the Company is anticipating a re-evaluation of
the Khurbet East Field reserves which will be undertaken by RPS Group
Plc as of year-end 2008, with results expected in Q1 2009.
Gulfsands' CEO, Ric Malcolm, commented:
"The discovery of oil at Yousefieh-1 in a new play-type is an
exciting and significant outcome for the Company and provides strong
encouragement for future exploration. This is the second oil
discovery to be made in Block 26 within two years and demonstrates
it's very prospective nature. The first discovery at Khurbet East is
consistently producing at high rates through the early production
facility and we are proud of our achievement in having produced more
than one million barrels of oil since production commenced back in
July. The close proximity of the Yousefieh oil discovery to Khurbet
East, together with the high quality reservoir encountered, provides
encouragement for an early declaration of commerciality on this
discovery."
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
Kenneth Judge, Director of Corporate Development +44 (0)7733 001 002
Buchanan Communications Limited (London) +44 (0)20-7466-5000
Bobby Morse
Ben Willey
RBC Capital Markets (London) +44 (0)20-7653 4804
Sarah Wharry
Brett Jacobs
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 approximately 11,500
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.net.
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