19th Oct 2006 07:01
Gulfsands Petroleum PLC19 October 2006 Drilling Update - Tigris-1 well, Syria Appointment of Director of Corporate Development Expansion of London presence London, 19th October, 2006: Gulfsands Petroleum plc (AIM: GPX), the oil and gasproduction, exploration and development company with activities in the USA,Syria and Iraq, is pleased to provide an update on drilling activity in Syriaand announce the appointment of Kenneth Judge to the Board of Directors asDirector of Corporate Development in parallel with the establishment of theCompany's new London office. Tigris -1 Well The Tigris-1 well in Block 26, Syria is drilling at a depth of 2,280 metres andis estimated to take 90 to 120 days to drill and evaluate. Drilling of Tigris-1commenced on 10 September 2006. The well is targeting a total depth ofapproximately 4,500 metres. The Company owns the deep rights in Tigris to oiland gas contained in Paleozoic reservoirs, which will not be penetrated untilnear the end of drilling this well. Gulfsands has commenced the acquisition of an additional 266 kilometres of 2Dseismic in Block 26 for the purpose of finalizing the drilling program for thefirst half of 2007. Director of Corporate Development With immediate effect, Kenneth Peter Judge OAM has been appointed as Director ofCorporate Development. Mr. Judge's role will primarily include corporatestrategy and liaison with the Company's institutional shareholder base. Mr. Judge, is well known to the London investment community as a corporatelawyer with extensive business management and corporate development experiencehaving held numerous public company directorships and more recently having beenengaged in the establishment or corporate development of oil and gas, mining andtechnology companies in the United Kingdom, Middle East, USA, Australia, Europe,Canada, Latin America and South East Asia. Mr. Judge has undergraduate andpost-graduate degrees in Commerce, Jurisprudence and Laws from the University ofWestern Australia and was awarded an Order of Australia Medal in 1994. Expansion of London Presence In response to an anticipated increase in the Company's activity in the MiddleEast, Gulfsands is establishing a London office at 33 Cavendish Square, LondonW1G 0PW. This office will serve as the Company's corporate and technicalheadquarters in support of activity in the City of London and operations in theMiddle East. Gulfsands' CEO, John Dorrier, said: "We are pleased to welcome Ken Judge to the Board. Ken has a wide range ofrelevant corporate development experience and will assist with shaping andexecuting the Company's strategies and liaison with our largely Europe based,institutional shareholders. The opening of our new London office should alsofacilitate the Company's presence in the City and provide a home for anexpansion of our technical resources to support our operations in Syria andIraq." Further information required under AIM rules:- Mr. Judge, aged 51, is also a director of Hidefield Gold plc, Brazilian DiamondsLtd., Alto Ventures Ltd., Columbus Gold Corporation, Empire Mining Corporation,Block Shield Corporation plc and Carnarvon Petroleum Ltd. Within the last fiveyears, Mr. Judge was also a director of Latin American Minerals Inc., PiperCapital Inc. and Forum Uranium Corporation. Following Mr. Judge's appointment to the Board, he has been granted options over400,000 ordinary shares of 5.714p each at £0.96 per share, exercisable by 18October 2011. Hamilton Capital Partners Limited, a company in which Mr. Judgeis beneficially interested, is the owner of 3,643,750 ordinary shares inGulfsands, which represents approximately 3.74% of Gulfsands' total issued sharecapital. There is no further information required to be disclosed in accordance withSchedule Two (g) of the AIM Rules. ABOUT GULFSANDS: Gulf of Mexico, USA The Company owns interests in 64 offshore blocks comprising approximately216,000 gross acres which includes numerous producing oil and gas fieldsoffshore Texas and Louisiana with proved and probable recoverable reserves of32.4 BCFGE, consisting of 19.8 BCFG and 2.1 MMBO. As of 1st January 2006 thesewere estimated to have a net present value of $183 million. In addition, theCompany's 2.8 BCFGE of possible recoverable reserves were estimated to have anet present value of $15.8 million. 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. In January 2006 the Company completed the acquisition of 1,155 kilometres of 2Dseismic over three areas of Block 26 and following evaluation of this data,commenced drilling of the Tigris-1 prospect on 10 September, 2006. The Tigrisstructure is estimated to have the potential to contain in excess of 500 MMBOE.Gulfsands has identified numerous exploration prospects and leads within Block26 with mean resources potential exceeding 1 billion barrels of recoverable oil. Ryder Scott recently completed a reserves study on the Tigris structure (thereport is available on the Gulfsands' website at www.gulfsands.net) and pendingthe Company's drilling and testing of the Tigris structure, classified thesereserves as either oil or gas bearing. Ryder Scott assessed Gulfsands' netProbable Reserves were 102 BCFG and had a net present value of $233 million.Assuming a primarily natural gas accumulation, Ryder Scott estimated Gulfsandshad an additional net 75 BCFG of possible reserves with a net present value of$261 million. All reserve estimations for Syria were calculated using a discountrate of 10% and after applying the terms of the Production Sharing Contractafter Syrian taxes. The Company has completed its own economic evaluation on the Prospective GasResource and has estimated the Company to have a net Prospective Gas Resource of577 BCFG with a net present value of approximately $1.06 billion. In summary, Gulfsands' total net gas reserves potential among Probable andPossible Reserves for the natural gas case is estimated at 177 BCFG (30 MMBOE)with a net present value of $494 million. When combined with the Prospective GasResource for an aggregate 754 BCFG (126 MMBOE), the net present value ofGulfsands' interest are estimated to be valued at approximately $1.55 billion. Ryder Scott estimated that for a primarily oil accumulation, the PossibleReserves net to Gulfsands are 19.4 million barrels of oil with a net presentvalue of $452 million. Gulfsands has completed its own economic evaluation onthe Prospective Oil Resource and has estimated its net Prospective Oil Resourceat 50.9 MMBO with a net present value of approximately $1.51 billion. In summary Gulfsands total net oil reserves potential among Possible andProspective Oil Resource for the oil case is estimated at 70.3 MMBO with a netpresent value of 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 followingcompletion of a feasibility study on the project, is currently negotiatingdetails of definitive contracts for this regionally important development. Theproject will gather, process and transmit natural gas that is currently a wasteby-product of oil production and as a result of the present practice of gasflaring, contributes to significant environmental damage in the region. Onshore USA Gulfsands operates onshore in the USA through its 100% owned subsidiary companyDarcy Energy LLC which owns interests in two oil and gas fields onshore Texas,USA (Emily Hawes and Barb Mag) with proved and probable recoverable reserves at1 January 2006 of 1.6 BCFGE, consisting of 1.2 BCFG and 58,000 barrels of oilwith an estimated net present value of $9.5 million. Additionally, these fieldscontain a further 2.2 BCFGE of possible recoverable reserves with an estimatednet present value of $7.9 million. For further information including the Company's recent investor presentation,please refer to 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) (pending opening of office)Kenneth Judge, Director of Corporate Development College Hill (London) 020-7457-2020Nick ElwesPaddy Blewer Teather & Greenwood (London) 020-7426-9000James Maxwell (Corporate Finance)Tanya Clarke (Specialist Sales) This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Gulfsands Petroleum