Statement re Gulfsands enters agreement to acqu...
Immediate Release 22 March 2010
GULFSANDS PETROLEUM PLC
Gulfsands enters agreement to acquire interest in blocks in Tunisia and Southern
Italy
For a full copy of the release which includes a diagram please go to
http://www.gulfsands.com/s/NewsReleases.asp
London, 22nd March, 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 announce that the Company has reached an agreement to acquire working
interest positions in two exploration permits in Tunisia (Chorbane and Kerkouane
Permits) and one exploration permit in Southern Italy (G.R15.PU) from AuDAX
Resources Ltd ( "AuDAX" and ASX:ADX). Â The agreement remains subject to the
completion of formal farm-in documentation and board approvals from both
companies.
Chorbane Permit - Onshore Tunisia
The Chorbane permit is located onshore central Tunisia near the port city of
Sfax and covers an area of 2,428 square km. The terms of the exploration and
production within the Chorbane Permit are governed by a Production Sharing
Contract ("PSC") with the Enterprise Tunisienne D'Activities Petrolieres or
"ETAP". The permit is surrounded by several producing oil fields and extensive
oil & gas infrastructure.The forward work commitment for the Chorbane permit
requires the drilling of one exploration well and Gulfsands will pay 80% of the
cost of the first exploration well in order to earn a 40% interest in the
permit.
A number of prospects and leads have been indentified within the permit, the
most prospective being a large tilted horst block ("Sidi Daher") that contains
multiple potential targets and recoverable un-risked prospective resources of
80 mmboe (AuDAX estimate).
AuDAX has identified a seismic amplitude feature of particular interest that may
indicate the presence of gas within one of the primary reservoir targets. Â The
resource estimate associated directly with the seismic amplitude feature is 175
Bcf of gas or 29 mmboe (Audax probabilistic mean case).
Gulfsands expects to drill the Sidi Daher exploration well prior to the end of
2010, and the gross well cost is estimated at approximately $5.0 million. Â In
the success case, appraisal and development activities will commence as quickly
as practicable with first production expected within 18-24 months of discovery.
Kerkouane Permit - Offshore Tunisia
G.R15.PU Â Permit (Pantelleria Permit) - Offshore Italy
G.R15.PU, is located offshore the island of Pantelleria southwest of Sicily in
Italian waters and the Kerkouane Permit is located offshore northeast Tunisia.
 The two permits are contiguous and comprise a total area of approximately 4500
square km (see figure below). Â The terms of the exploration and production
within the Kerkouane Permit are governed by a Tunisian Production Sharing
Contract ("PSC"), whist the G.R15.PU permit is governed under an Italian
tax/royalty structure.
The permits contain multiple prospects and leads, the most significant of which
is the Lambouka Prospect, a large horst block containing multiple reservoir
targets. The Lambouka Prospect lies in approximately 400m of water. AuDAX has
published 270 mmboe as the mean reserve estimate for the Lambouka Prospect.
The forward work commitment for the Kerkouane Permit requires the drilling of
one exploration well.Atwood Oceanics Inc will be providing the "Atwood Southern
Cross" semi-submersible offshore drilling unit to conduct the work programme for
the Lambouka prospect with an expected spud date of 15th June 2010.
Gulfsands will earn 20% working interest in both permits by paying 30% of the
cost of an upcoming 3D seismic programme that will be used to define the first
drilling location, and has the option to earn an additional 10% in the permits
with payment of an additional 15% of the initial well cost, with option election
prior to the spud of the first exploration well. Â The gross cost of the seismic
programme is approximately $5.2 million and the gross cost of the first
exploration well is approximately $20 million.
Ric Malcolm, Gulfsands CEO, said
"These onshore and offshore Tunisia blocks are within the area of focus of our
Middle East and North Africa business strategy and offer a compelling
opportunity that fits well with our growth strategy of gaining cost-effective
high impact projects and operated production. We look forward to drilling these
two exploration wells this year in what is an exciting development for
Gulfsands."
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
Andrew West, Chairman
Andrew Rose, Chief Financial Officer
Buchanan Communications Limited (London) +44 (0)20 7466 5000
Bobby Morse +44 (0)7802 875227
Ben Romney
Chris McMahon
RBC Capital Markets (London) +44 (0)20 7653 4000
Josh Critchley
Tim Chapman
Matthew Coakes
Martin Eales
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 17,000 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. Â The current exploration license expires in August 2010 and is
extendable for a further two years. Â 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. Â 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. Â 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 websitewww.gulfsands.com
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Code (the "Code"), if any
person is, or becomes, "interested" (directly or indirectly) in 1% or more of
any class of "relevant securities" of Gulfsands, all "dealings" in any "relevant
securities" of that company (including by means of an option in respect of, or a
derivative referenced to, any such "relevant securities") must be publicly
disclosed by no later than 3.30 p.m. (London time) on the London business day
following the date of the relevant transaction. This requirement will continue
until the date on which the offer becomes, or is declared, unconditional as to
acceptances, lapses or is otherwise withdrawn or on which the "offer period"
otherwise ends. If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire an "interest" in "relevant
securities" of Gulfsands, they will be deemed to be a single person for the
purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant
securities" of Gulfsands by the potential offeror or by Gulfsands, or by any of
their respective "associates", must be disclosed by no later than 12.00 noon
(London time) on the London business day following the date of the relevant
transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the Takeover Panel's website
atwww.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the
Panel's website. If you are in any doubt as to whether or not you are required
to disclose a "dealing" under Rule 8, you should consult the Panel.
[HUG#1395912]
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