Tigris-1 Well update
Gulfsands Petroleum PLC
14 February 2007
Tigris-1 Well in Syria at Total Depth
Wireline logging completed
Production liner set and further evaluation to be undertaken
Rig to be released
London, 14 February, 2007: Gulfsands Petroleum plc (AIM: GPX), the oil and gas
production, exploration and development company with activities in the U.S.A.,
Syria and Iraq announces that the Company has reached total depth on the
Tigris-1 well within Block 26, Syria and is setting a 7 inch production liner to
total depth in the well.
Gulfsands, the operator and 50% working interest owner in Block 26, Syria, has
completed drilling operations on the Tigris-1 well. The well was drilled to a
total depth of 4,500 metres. Wireline logging operations and formation pressure
testing have also been completed and sidewall cores acquired.
The results of the operations to date are inconclusive. While the lower
portions of the well (3800 - 4500 metres) evidence hydrocarbon-bearing pay over
a substantial interval, the pressure tests indicate lower permeability
reservoirs. It is not possible at this stage to make a determination as to
whether or not these reservoirs will ultimately be capable of producing
hydrocarbons at commercial rates.
While these results are disappointingly incomplete, Gulfsands considers it is
too early to make a determination as to the ultimate commerciality or otherwise
of the Tigris-1 well. There are numerous possible reasons for the apparent low
permeability of the reservoirs and there are a variety of techniques (e.g.
fracture stimulation) which may be suitable to be employed if required to render
the reservoirs commercial.
It is also possible that, as a result of further analysis, deepening of the well
may be deemed an attractive option. Irrespective of the ultimate commercial
outcome, there is also a wealth of valuable additional data to be collected from
further testing and evaluation of this well. Once a 7 inch liner has been set,
the well bore will be preserved in good condition for production testing or
additional drilling.
It is worth noting that the additional cost required to set the liner is
estimated to be approximately 5% of the amount already outlaid in drilling to
target depth. In the opinion of Gulfsands as operator and particularly in light
of the log results which indicate hydrocarbon potential in the wellbore, it
would be imprudent to do otherwise. It has always been Gulfsand's intention as
operator to set casing to total depth if open-hole evaluation proved
inconclusive, and we will now proceed to do so.
Once the liner has been set, and in accordance with our original plans, the
drilling rig used on Tigris-1 will be released in order to expedite its return
to Block 26 around July 2007 following drilling operations with this drilling
rig for another operator in Syria. Future production testing of the wellbore
can be carried out perfectly satisfactorily with a smaller workover rig in
accordance with normal industry practice. Such smaller rigs are both cheaper to
operate and more readily available in Syria.
Emerald Energy, our 50 % partner in Block 26, has elected not to participate in
setting the liner in the well. This is Emerald's prerogative and indeed Emerald
may elect to participate in the future operations of Tigris-1 after reimbursing
Gulfsands for its share of costs and with an additional back-in penalty. While
we respect this decision, we as operator remain firmly of the view that there is
inadequate evidence to support a definitive conclusion that the well will not
prove ultimately commercial, that such a decision is premature and that the
balance of risk and reward is entirely in favour of incurring the modest
additional expenditure required to set the liner.
Gulfsands' CEO, John Dorrier, said:
'Given the pressures on rig availability, it is frustrating not to have a
definitive result from the well at this point. The reservoirs encountered thus
far in the well have lower indicated permeability than expected and it is
therefore uncertain that any hydrocarbons there will yield commercial production
rates. However, given that lower permeability reservoirs are productive in
other parts of the world, we consider it prudent to preserve the wellbore for
further operations.'
NB: This release has been approved by Jason Oden, Gulfsands Exploration Manager,
who has a Bachelor of Science degree in Geophysics with 22 years of experience
in petroleum exploration and management and is registered as a Professional
Geophysicist. Mr. Oden has consented to the inclusion of the material in the
form and context in which it appears.
Certain statements included herein constitute 'forward-looking statements'
within the meaning of applicable securities legislation. These forward-looking
statements are based on certain assumptions 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.
For further information including the Company's recent investor presentation,
please refer to the Company's website www.gulfsands.net or contact:
Gulfsands Petroleum (Houston) + 1-713-626-9564
John Dorrier, Chief Executive Officer
David DeCort, Chief Financial Officer
Gulfsands Petroleum (London) 020-7182-4016
Kenneth Judge, Director of Corporate Development 07733-001-002
College Hill (London) 020-7457-2020
Nick Elwes
Paddy Blewer
Teather & Greenwood (London) 020-7426-9000
James Maxwell (Corporate Finance)
Tanya Clarke (Specialist Sales)
This information is provided by RNS
The company news service from the London Stock Exchange
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