Statement re Gulfsands Receives Approval to Dev...
Immediate 26 January
Release                                                 2010
GULFSANDS PETROLEUM PLC
Gulfsands Receives Approval to Develop Yousefieh Oil Field
London, 26th 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.
Application to Develop the Yousefieh Oil Field Granted by Syrian Authorities
Discovery of oil at Yousefieh-1, located approximately 3 kilometres east of the
Khurbet East Field, was made in November 2008, with two subsequent appraisal
wells being drilled in 2009.
Gulfsands has now received confirmation from Syria's General Petroleum
Corporation that Gulfsands Petroleum Syria Limited has been granted permission
to develop the Yousefieh Oil Field accumulation in Block 26 North East Syria. A
production licence of 25 years duration has been granted, with the possibility
of an extension if required, for a further 10 years.
The Yousefieh Field was assessed at the end of 2008 as containing gross proved
plus probable reserves of 11 million barrels of oil. A further update on
Yousefieh Field estimated gross reserves will be provided at the beginning of
the second quarter 2010.
First oil from Yousefieh is anticipated early in April 2010. Production will
commence from 2 wells, Yousefieh-1 and Yousefieh-3, at an expected initial
combined rate of up to 1000 barrels of oil per day ("bopd").
Production from the wells will be closely monitored to assess flow performance
and to determine whether the Yousefieh reservoir benefits from the same strong
aquifer pressure support as is observed in the nearby Khurbet East Field. The
current expectation is that the Yousefieh field has lower reservoir energy than
Khurbet East and planning is underway to install permanent down-hole artificial
lift equipment in both Yousefieh wells later in the year. In addition, a further
development well on Yousefieh is planned for 2010.
It is anticipated that production from the Yousefieh Field will reach a rate of
approximately 6000 barrels of oil per day by 2012.
Ric Malcolm, Gulfsands CEO, said
"We are delighted to have received the Syrian Government's early confirmation of
development approval for the Yousefieh field and now look forward to commencing
production as soon as practicable. The early production data obtained will
provide valuable information that will assist us in optimizing the development
of the field."
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.
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
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 17,300 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. 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 website www.gulfsands.com
[HUG#1376924]
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