Syrian oil production flow rate
Immediate Release 10 September 2008
Gulfsands Petroleum plc
Khurbet East Oil Field Production exceeds 11,500 barrels per day
London, 10th September 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 stabilized oil production
through the Khurbet East Early Production Facility ("EPF") now
exceeds 11,500 barrels of 25.7 degree API oil per day (bopd), with
production from three vertical and two horizontal wells.
Oil production through the Khurbet East EPF commenced on 21st July
2008 with initial production from the KHE-4 vertical well. Additional
wells were successively brought online, and daily average production
through the month of August was approximately 5600 bopd. Upon
completion of the production startup phase on 5th September, all five
wells are online and daily production was increased to in excess of
11,500 bopd with only trace amounts of water.
Total field production to date has been in excess of 260,000 barrels
of oil with the oil being transported by truck approximately 33
kilometers from the EPF to a processing facility operated by the
Syrian Petroleum Company ("SPC"). Sufficient trucking capacity had
been pre-arranged in order to transport these daily volumes.
The production startup phase included a pressure monitoring programme
designed to obtain data to be used to improve reservoir and field
performance. Surface and down-hole pressure gauges were installed in
all wells. Individual wells were shut-in for pre-planned periods to
monitor reservoir pressure behavior.
On 5th September, the Company completed the initial data gathering
phase and the down-hole memory gauges were pulled from the wells.
The data are currently being analysed by in-house and external
engineering professionals. The results of these analyses, combined
with real-time production information, will be used for reservoir
management as well as full-field development planning and design
purposes.
Under oil marketing arrangements reached with SPC and the Oil
Marketing Bureau ("OMB") of the Syrian Government, oil produced from
the Khurbet East Field will be sold as "Syrian heavy crude oil" which
has an API of approximately 24.1, into the OMB's well established
markets and exported through the Mediterranean port of Tartous using
SPC's oil handling infrastructure. Monthly invoices will be raised
for oil produced from the field and these will generally be paid by
the OMB within 21 days of the date of invoice based upon the
initially assessed technical specification of the oil.
However during the first 12 months of production and in keeping with
the oil marketing arrangements for oil produced from newly developed
fields and other producing fields within the region using the same
SPC oil handling infrastructure, the OMB has agreed to make an
initial payment equal to 80% of the value of the invoiced deliveries
which value will be calculated by reference to the official price of
"Syrian heavy crude oil" with the balance 20% of the invoiced amount
being retained pending completion of an independent analysis of the
specification of the oil delivered during this period. This
independent analysis will be carried out in September 2009 at which
time and subject to such adjustments as may be required for
variations in oil quality, the OMB will then pay all outstanding
invoice retentions. After completion of this oil analysis process,
OMB will then begin paying for 100% of all monthly invoiced
deliveries within 21 days of receiving month end invoices.
Andrew West, Chairman of Gulfsands said:
"Khurbet East is the first new oil field to go into commercial
production in Syria in some time and we are therefore very pleased
with the initial results so far. It is especially pleasing that the
individual producing wells, production facility and trucking
operations are producing at even better rates than we expected prior
to our commencement of first oil in mid July. With total field
production to date now in excess of 260,000 barrels of oil, we have
achieved another significant milestone for the Company and we look
forward to the Khurbet East Field's continued contribution to our
production profile and cash flow."
For more information please contact:
Gulfsands Petroleum (London) +44 (0)20-7182-4016
Kenneth Judge, Director of Corporate Development +44 (0)7733-001-002
Jon Bey, Investor Relations: North America + 1 866 689 2599
Buchanan Communications Limited (London) +44 (0)20-7466-5000
Bobby Morse
Ben Willey
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. 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. 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. 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.
---END OF MESSAGE---
Latest directors dealings
- 1 day ago Savannah Energy
- 1 day ago Buccaneer Energy PLC
- 1 day ago Savannah Energy
- 1 day ago Carclo
- 1 day ago Schroder Japan Growth Fund