28th Jun 2007 07:01
Gulfsands Petroleum PLC28 June 2007 Annual General Meeting London, 28th June, 2007: Gulfsands Petroleum plc ("Gulfsands", the "Group" orthe "Company" - AIM: GPX), the oil and gas production, exploration anddevelopment company with activities in the U.S.A., Syria and Iraq will hold itsAnnual General Meeting at 11am today, at which the following statement will bemade by Andrew West, Chairman of Gulfsands: "Gulfsands' achievements in the USA and Syria in 2006 and during the first halfof 2007 have provided the Company with a very positive platform for the future.Financially, the Company experienced increases in its profit, turnover, cashflow from operations, fixed assets, net assets and shareholders' funds during2006 and subsequent to year-end announced a multi-zone oil and gas discovery atKhurbet East in Block 26, Syria. The Company commenced drilling the Khurbet East 1 ("KHE-1") exploration well inBlock 26, Syria on 19 February 2007 and this represented the third well of afour well drilling commitment on the block. KHE-1 encountered four significanthydrocarbon bearing reservoirs. The deepest reservoir Triassic Kurrachine Dolomite flowed oil to the surface ondrill stem testing at a rate of approximately 478 barrels of oil per day ("bopd") with a gas to oil ratio ("GOR") averaging approximately 2000 standardcubic feet per barrel ("scf/bbl"). Preliminary assessment of the oil gravity is35 degrees API. Logged pay appears relatively large but is uncertain due to poorwell-bore conditions at this depth. The Triassic Butmah Formation contained approximately 16 metres of nethydrocarbon pay based on wireline log interpretation, reservoir pressures and anatural gas fluid sample recovery. The Cretaceous Massive Formation contains approximately 22 metres of net oil payover a 25 metre gross interval based on wireline log interpretation, reservoirpressures and fluid sample recovery. The oil in this reservoir has an APIgravity of approximately 24 degrees, based on PVT analysis. The Tertiary Chilou 'B' Formation contained approximately 26 metres of net oilpay, based on wireline log interpretation. On 14 June the Company spudded the fourth well on Block 26, the KHE-2 appraisalwell. This well is designed to provide further information of the lateralextent and continuity of the Cretaceous Massive and Tertiary Chilou 'B'Formations. The results of this well are expected in August. The Group's USA reserves increased significantly during 2006 primarily as aresult of extensive workovers and recompletions of existing wells in the Gulf ofMexico which resulted in proved and probable reserves totaling 44.6 BCFGE (7.4MMBOE) as of 31 December 2006. These reserve additions replaced 389% of theGroup's 2006 produced oil and gas volumes. Also significant to USA operationswas the restoration of production to pre-storm levels of approximately 3,000boepd by the end of 2006. The Group continues to make progress in its discussions with the Iraq OilMinistry on the Maysan Gas Project, as well as other business initiatives inIraq. The Board were also very pleased to recently welcome two significant new Syrianshareholders to the Company, as announced on 26 June 2007. The £11.6m of newfunding secured for the Company as a result of this investment will assist theCompany to accelerate its activities in Syria, including the evaluation of thefuture development of the recent oil and gas discovery at Khurbet East. The Board believes that the outlook for the Company remains strong and ourcurrent activities in Syria, USA and Iraq should provide significant potentialfor creating further value for Gulfsands and its shareholders. The Board islooking forward to another exciting year as the Company appraises its recent oiland gas discovery in Syria and further progresses its initiatives in Iraq." The Board will also make a presentation to shareholders on the Khurbet East oiland gas discovery at the Annual General Meeting. This presentation can be viewedon the Company's website at www.gulfsands.net. 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 experiencein petroleum exploration and management and is registered as a ProfessionalGeophysicist. Mr. Oden has consented to the inclusion of the material in theform and context in which it appears. ABOUT GULFSANDS: Gulf of Mexico, USA The Company owns interests in 54 offshore blocks comprising approximately193,000 gross acres which includes numerous producing oil and gas fieldsoffshore Texas and Louisiana with proved and probable recoverable reserves netto Gulfsands at 31 December 2006 of 41.5 BCFGE (6.9 MMBOE), consisting of 27.3BCFG 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 MagField) with proved and probable recoverable reserves net to Gulfsands at 31December 2006 of 3.1 BCFGE (0.5 MMBOE), consisting of 2.8 BCFG and 57,000barrels of oil. Syria Gulfsands owns a 50% working interest and is operator of Block 26 in North EastSyria. Block 26 covers 11,000 square kilometres and encompasses existing fieldswhich currently produce over 100,000 barrels of oil per day. These fields areoperated by third parties including the Syria Petroleum Company. Iraq Gulfsands signed a Memorandum of Understanding in January 2005 with the Ministryof Oil in Iraq for the Maysan Gas Project in Southern Iraq and followingcompletion of a feasibility study on the project is negotiating details ofdefinitive contracts for this regionally important development. The project willgather process and transmit natural gas that is currently a waste by-product ofoil production and as a result of the present practice of gas flaring,contributes to significant environmental damage in the region. Certain statements included herein constitute "forward-looking statements"within the meaning of applicable securities legislation. These forward-lookingstatements are based on certain assumptions made by Gulfsands and as such arenot a guarantee of future performance. Actual results could differ materiallyfrom those expressed or implied in such forward-looking statements due tofactors such as general economic and market conditions, increased costs ofproduction or a decline in oil and gas prices. Gulfsands is under no obligationto update or revise any forward-looking statements, whether as a result of newinformation, future events or otherwise, except as required by applicable laws. For further information, including recent investor presentations, please referto the Company's website www.gulfsands.net or contact: Gulfsands Petroleum (Houston) + 1-713-626-9564John Dorrier, Chief Executive OfficerDavid DeCort, Chief Financial Officer Gulfsands Petroleum (London) 020-7182-4016Kenneth Judge, Director of Corporate Development 07733-001-002 College Hill (London) 020-7457-2020Nick ElwesPaddy Blewer Teather & Greenwood (London) 020-7426-9000Tom Hulme (Corporate Finance)Tanya Clarke (Specialist Sales) This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Gulfsands Petroleum