28th Jul 2006 16:02
Gulfsands Petroleum PLC28 July 2006 Gulfsands Petroleum plc("Gulfsands" or "the Company") Directors' purchase 3,508,750 shares in Gulfsands Petroleum Directors' ownership increases to 22.25% of issued share capital Gulfsands adopts plan to exercise outstanding share options in an orderly manner Gulfsands Petroleum plc (symbol GPX), the AIM listed oil and gas exploration,development and production company with activities in the USA, Syria and Iraqannounces that it has today received notification from various directors of theCompany (as set out in the table below) for the exercise of options (the "Exercise") over 3,893,750 ordinary shares of 5.714p each in the Company ("Ordinary Shares") due to expire on 2 August 2006. The Company received $890,000 in proceeds from the directors resulting from theExercise and subsequently two directors (as set out below) sold 385,000 newOrdinary Shares to cover certain tax liabilities which fall due in the currentquarter as a result of the Exercise. As a consequence the directors purchased anet 3,508,750 Ordinary Shares. Following the Exercise there remains a total of 10,077,500 options outstandingover Ordinary Shares, with expiry dates between 1 January 2008 and 24 July 2011(further details of which are set out in the Company's Report & Accounts whichwere recently circulated to shareholders and are available on the Company'swebsite - www.gulfsands.net). However, of this amount 7,262,500 of these optionswere granted to directors over the 8-year period the Company was privately heldprevious to its admission to AIM in 2005. Given this quantum of options islarge, the Board of Gulfsands intends to adopt a systematic plan, in conjunctionwith its broker Teather & Greenwood Limited, to enable the exercise andsubsequent sale of sufficient Ordinary Shares to meet option exercise costs andtax liabilities in an orderly and carefully considered manner. Details of the Exercise and the resultant shareholdings are as follows: Director Number of Date of Exercise Price Ordinary Total Ordinary Ordinary Shares options over Grant Shares sold Shares under held following Ordinary at 95p each option following the Exercise Shares the Exercise exercised John Dorrier 1,487,500 2 Aug 2001 $0.229 245,000 3,825,000 8,883,750 / 9.12% David DeCort 875,000 2 Aug 2001 $0.229 140,000 2,768,750 4,285,625 / 4.4% Nordman Continental S.A. 1,312,500 2 Aug 2001 $0.229 0 1,893,750 8,056,875 /* 8.27% David Cowan 218,750 2 Aug 2001 $0.229 0 300,000 437,500 / 0.45% Total 3,893,750 385,000 8,787,500 21,663,750 / 22.25% * Nordman Continental S.A. is owned by a discretionary trust whereby MahdiSajjad's children are potential beneficiaries under the trust. The new Ordinary Shares will rank pari passu with the existing ordinary sharecapital of the Company and have been allotted and issued credited as fully paid.Application has been made for the 3,893,750 new Ordinary Shares to be admittedto trading on AIM and dealings are expected to commence on or around 2 August2006. Following admission, the total issued share capital of the Company has increasedto 97,375,000 Ordinary Shares. Enquiries: Gulfsands Petroleum (Houston) 001-713-626-9564David DeCort, Chief Financial Officer College Hill (London) 020-7457-2020Nick ElwesPaddy Blewer Teather & Greenwood (London) 020-7426-9000James Maxwell (Corporate Finance)Tanya Clarke (Specialist Sales) Note to Editors • Gulf of Mexico, USA The Company owns interests in 64 offshore blocks comprising approximately216,000 gross acres which includes 39 producing oil and gas fields offshoreTexas and Louisiana with proved and probable recoverable reserves of 32.4 BCFGE,consisting of 19.8 BCFG and 2.1 MMBO as of 1 January 2006 with a net presentvalue of $183 million. Additionally, there is a further 2.8 BCFGE of possiblerecoverable reserves with a net present value of $15.8 million. • Syria In Syria, Gulfsands owns a 50% working interest in Block 26 and is the operator.The block covers 11,000 square kilometres and surrounds areas which currentlyproduce over 100,000 barrels of oil per day from existing fields. In January2006 the Company completed the acquisition of 1,155 kilometers of 2D seismic andanticipates drilling two wells during 2006. The first well, known as SouediehNorth, commenced drilling in late April 2006 and was temporarily suspended inJune for further analysis. The second well known as Tigris is scheduled to spudin late August of 2006 and has the potential to contain in excess of 500 MMBOE.Gulfsands has identified 31 total exploitation and exploration prospects withinBlock 26 with mean resources potential exceeding 1 billion barrels ofrecoverable oil. Ryder Scott completed a reserves study on the Tigris structure in 2006 and thesereserves were classified as either oil or gas bearing until such time as theCompany drills and tests the Tigris structure. As of 1 July 2006 Ryder Scottdetermined that the Probable Reserves net to Gulfsands after applying the termsof the Production Sharing Contract is 102 BCFG with a net present valuediscounted at 10% of $233 million. For primarily a natural gas accumulation, anadditional 75 BCFG of possible reserves net to Gulfsands were estimated to havea 10% discounted net present value of $261 million. Furthermore, the Companycompleted its own economic evaluation on the Prospective Gas Resource and hasestimated that Prospective Gas Resource net to Gulfsands is 577 BCFG with a netpresent value of approximately $1.06 billion. In summary total gas reservespotential net to Gulfsands among Probable and Possible Reserves for the naturalgas case is 177 BCFG (30 MMBOE) with a net present value of $494 million andwhen combined with the Prospective Gas Resource it totals 754 BCFG (126 MMBOE)with a net present value of approximately $1.55 billion. For primarily an oil accumulation, Ryder Scott determined the Possible Reservesnet to Gulfsands after applying the terms of the Production Sharing Contract are19.4 million barrels of oil having a net present value discounted at 10% of $452million. Furthermore, the Company completed its own economic evaluation on theProspective Oil Resource and has estimated that Prospective Oil Resource net toGulfsands is 50.9 MMBO with a net present value of approximately $1.51 billion.In summary total oil reserves potential net to Gulfsands among Possible andProspective Oil Resource for the oil case is 70.3 MMBO with a net present valueof approximately $1.96 billion. • Iraq Gulfsands signed a Memorandum of Understanding in January 2005 with the Ministryof Oil in Iraq for the Misan Gas Project in Southern Iraq and is currentlynegotiating the definitive contract for the project. The project will gather,process and transmit natural gas that is currently a waste by-product of oilproduction in the region and will end the environmentally damaging practice ofgas flaring. Gulfsands has completed a feasibility study and expects to conductfurther technical work and commercial discussions with the Iraq Oil Ministry. • Onshore USA Gulfsands operates onshore in the USA through its 83% owned subsidiary companyDarcy Energy LLC. As of 1 January 2006, Darcy Energy owned interests in two oiland gas fields onshore Texas, USA (Emily Hawes and Barb Mag) with proved andprobable recoverable reserves of 1.6 BCFGE, consisting of 1.2 BCFG and 58,000barrels of oil with a net present value of $9.5 million. Additionally, there isa further 2.2 BCFGE of possible recoverable reserves with a net present value of$7.9 million. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Gulfsands Petroleum