Drilling Update in Syria
Immediate Release 21 January 2010
GULFSANDS PETROLEUM PLC
OPERATIONS UPDATE:
Khurbet East-14 Delineation Well Flows Oil to Surface Indicating a Deeper Field
Oil-Down-To ("ODT") Depth
Khurbet East-13 Well Commences Production
Zaman-1 Exploration Well Spudded
London, 21st January 2010:Â 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 provide the following update on the Company's operations at Block 26, Syria,
where Gulfsands holds a 50% interest and acts as operator.
Khurbet East-14 Delineation Well Intersects Oil Column and Flows Oil to Surface
The Khurbet East ("KHE")-14 delineation well, located approximately 1 kilometre
north of delineation well KHE-12 and approximately 4.9 kilometres south of the
KHE-1 discovery well, was drilled to a total depth of 2045 metres measured depth
("MD") and 1626 metres true vertical depth below mean sea level ("TVD SS") with
the primary objective being to intersect the oil-water contact in the Khurbet
East field.
The well encountered the top of the Cretaceous Massive Formation at a measured
depth ("MD") of 1988 metres (1571 metres TVD SS) and the preliminary
interpretation of drilling data and wireline logs identified a gross oil column
at the top of the Massive Formation of 14 metres, with a net oil pay of 6 metres
and average porosity within the pay zone of 22%.
An open-hole drill-stem test was conducted over the interval 1982-1998 metres MD
(1564-1580 metres TVD SS). The KHE-14 well flowed oil of 27 degrees API at an
average rate of 613 barrels of oil per day ("bopd") for a 7 hour period on a 2"
choke using nitrogen lift. Negligible quantities of formation water were
produced during this flow period.
Although a definitive oil-water contact was not observed on wireline logs or
drilling data, the wireline logs indicates that oil was produced during this
test from a depth of 1998 metres MD (1580 metres TVD SS), 9 metres deeper than
the previous deepest oil flow observed in the field in well KHE 13.
A new field ODT has accordingly been interpreted at 1580 metres TVD SS.
These test results from KHE-14 and in particular the deeper ODT are expected to
have positive implications for reserves assessments which are currently being
undertaken on the Khurbet East field and which will be the subject of a separate
announcement at the beginning of the Second Quarter 2010.
Khurbet East-13 Well Commences Production
Well KHE-13, which was drilled and completed at the end of last year, has been
tied back to the Khurbet East Early Production Facility, located approximately
3.5 kilometres north-east of the KHE-13 surface location. The well is currently
producing at approximately 310 bopd under natural flow and with negligible
amounts of formation water. The production performance exhibited by well KHE-13
is in line with expectations and consistent with its location within the field;
well productivity is not as strong as that demonstrated by the high performance
production wells located near the crest of the field, but is superior to that
observed from wells drilled in the southern flank. Well KHE-13 will be a
candidate for production enhancement later this year via installation of
permanent artificial lift equipment.
Zaman-1 Exploration Well Spudded
Zaman-1, the first well in the 2010 exploration drilling programme, was spudded
on Friday 15(th) January. The Zaman prospect is located approximately 4.5
kilometres to the south of the Khurbet East Field as currently delineated and
targets the same Cretaceous Massive formation under production at the Khurbet
East field. Gross unrisked speculative reserves for this prospect are estimated
to be in the order of 23 to 35 million barrels of oil. Drilling operations on
the Zaman-1 well are anticipated to take approximately 45 days to complete.
Ric Malcolm, Gulfsands CEO, said
"The positive and significant results from KHE-14 delineation well in addition
to the start of oil production from KHE-13 both represent very significant
milestones in the continuing development of the Khurbet East Field from both a
production and potential reserves perspective. With the spudding of the Zaman-1
exploration well, the Company now commences an active and potentially exciting
exploration drilling programme of four wells during 2010."
This release has been approved by Richard Malcolm, Chief Executive of Gulfsands
Petroleum Plc who has a Bachelor of Science degree in Geology with 30 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
Richard 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 4000
Josh Critchley
Matthew Coakes
Brett Jacobs
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. Â The Khurbet East oil field was discovered in June 2007 and commenced
commercial production within 13 months of the discovery. This field is producing
at an average gross production rate of approximately 17,300 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 license expires in August 2010 and is
extendable for a further two years. Gulfsands' working interest 2P reserves in
Syria at 31 December 2008 were 35.2 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
[HUG#1375425]
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