11th Sep 2006 07:01
Gulfsands Petroleum PLC11 September 2006 11 September 2006 Gulfsands Petroleum plc("Gulfsands" or "the Company") Tigris-1 Well Commences in Block 26, Syria Gulfsands Petroleum plc (symbol GPX), the AIM listed oil and gas exploration,development and production company with activities in the USA, Syria and Iraq,is pleased to announce that the Company has commenced drilling the Tigris-1 wellwithin Block 26, Syria. The Tigris-1 represents the first of a series of wellsproposed to be drilled by the Company in Block 26 over the next 12 months.Gulfsands is currently in final negotiations on an additional drilling rig to beutilized within Block 26 for this continuous drilling program. Gulfsands, the operator and 50% working interest owner in Block 26, hascommenced the drilling of the Tigris-1 confirmation well located in thenortheast region of Block 26. This vertical well will be drilled to anapproximate depth of 4,500 meters with the primary objective being Carboniferousand Devonian aged reservoirs directly underlying the Souedieh Oil Field, thelargest known oil field in Syria. This well is scheduled to take 90 to 120 daysto drill and evaluate at an estimated cost of $7.3 million, or $3.65 million netto Gulfsands. The Tigris-1 well will be the second well to target the Carboniferous andDevonian aged reservoirs within the overall Tigris structure. The S1100 well,drilled in 1994 by the Syrian Petroleum Company and located approximately 1kilometre northeast of the Tigris-1 well, was the first well to intersect thesereservoirs within this structure. Independent interpretation of the wirelinelogs from the S1100 well indicates a substantial hydrocarbon column. The mainobjective of the Tigirs-1 well is to confirm the presence of this hydrocarboncolumn. Tigris has been estimated by Ryder Scott Company, L.P. to have 442 BCFG of grossprobable reserves with a net present value discounted at 10% of $233 million netto Gulfsands 50% working interest. Ryder Scott has estimated the grossprospective resource size for Tigris as some 4.3 TCF of natural gas, or 562million barrels of oil. The Ryder Scott reserve reports can be viewed onGulfsands' website at www.gulfsands.net. Gulfsands' CEO, John Dorrier, said: "The drilling program being undertaken in Block 26 holds great potential for theCompany. The Tigris well is the first in a series of wells planned to bedrilled on a near continuous basis over the next 12 months on the Block. TheBlock 26 drilling program, in combination with the Company's development work onthe Misan Project in Iraq and the oil and gas production oriented programs inthe Gulf of Mexico uniquely position the Company for asset growth." Enquiries: Gulfsands Petroleum (Houston) 001-713-626-9564John Dorrier, Chief Executive OfficerDavid 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) NB: This release has been approved by the Company's geological staff who includeJason Oden, Gulfsands Exploration Manager who has a Bachelor of Science degreein Geophysics with 22 years of experience in petroleum exploration andmanagement and is registered as a Professional Geophysicist, for the purpose ofthe Guidance Note for Mining, Oil and Gas Companies issued by the London StockExchange in respect of AIM companies, which outlines standards of disclosure formineral projects. 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 kilometres 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 commenced drillingin September 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