16th Jan 2006 07:01
Gulfsands Petroleum PLC16 January 2006 16 January 2006 Gulfsands Petroleum PLC("Gulfsands" or "the Group") Gulfsands Signs Letters of Intent for Two Drilling Rigs on Block 26, Syria Gulfsands Announces the First Two Prospects to be Drilled on Block 26 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 the signing of a Letter of Intent for each of twoland-based drilling rigs on Block 26 in Syria. Additionally, the Company andits partner, Emerald Energy Plc, have selected the first two prospects fordrilling within Block 26. Letters of Intent on Two Drilling Rigs Gulfsands executed two Letters of Intent (LOI) with MB Drilling OverseasLimited. These LOIs are for two separate rigs: MB Rig 21 capable of drillingthe shallow Cretaceous wells and MB Rig 3 for deeper drilling to the Paleozoic.The LOI for the shallow drilling rig is for one well plus a second well option,while the second LOI for the deep rig will involve the sharing of the rig withanother company operating in Syria. This rig is planned to be contracted for aone-year period with an option to extend for 2 additional one-year periods sothat the Company will be capable of drilling a series of Paleozoic wells during2006 and 2007. Negotiations on definitive rig contracts are now underway andGulfsands expects these to be signed shortly. Two Prospects Selected for Drilling Gulfsands and its partner within Block 26, Emerald Energy Plc, have selected thefirst two prospects for drilling within Block 26. The first prospect to be drilled is known as Souedieh North and is located inthe northeast region of Block 26. This vertical well will be drilled to anapproximate total depth of 7,216 feet with the primary objective beingCretaceous aged reservoirs similar to those producing in the adjacent Souediehand Karachok oil fields. This prospect has the potential to contain in excessof 100 million barrels of recoverable oil (Gulfsands' internal estimate ofpotential). We expect that the spud date for this well will occur on or aboutthe first of May 2006. The second prospect, known as Tigris, will also be located in the northeastregion of the Block. This vertical well will be drilled to an approximate totaldepth of 14,760 feet with the primary objectives being a series of Carboniferousand Devonian sandstone reservoirs. The Tigris structure is directly underlyingthe Souedieh oil field (the largest known oil field in Syria), where oil isproduced from the shallower Cretaceous reservoirs. Wireline log evaluation ofan existing well on the structure drilled some years ago has identified payzones within the objective reservoirs, and the Tigris-1 well is designed toevaluate these reservoirs and appraise this potential hydrocarbon accumulation.This prospect has the potential to contain in excess of 500 million barrels ofrecoverable oil equivalent (Gulfsands' internal estimate of potential). Thewell is expected to spud in mid-to-late August 2006 after the rig completes anexisting long-term drilling contract in Syria with another company. Gulfsands holds a 50% working interest in each of these prospects. John Dorrier, CEO of Gulfsands Petroleum, said: "This announcement underlines our commitment to an aggressive drilling programmeon Block 26 in Syria where we plan to drill 4 wells by August 2007. Thedrilling program in 2006 will be underway shortly with these rigs, and theprospects for significant reserves additions are very good. We are particularlyexcited about the Tigris Prospect beneath Souedieh Field and have undertakenfurther study of the existing well and 3D seismic data to more accurately assessthe reserves potential associated with this structure. "These two wells have the combined potential to contain in excess of 600 millionbarrels of recoverable oil equivalent." Enquiries: Gulfsands Petroleum (Houston) 001-713-626-9564David DeCort, Chief Financial Officer College Hill (London) 020-7457-2020Ben Brewerton / Nick Elwes Seymour Pierce (London) 020-7107-8000Richard RedmayneJonathan Wright Note to Editors • Gulf of Mexico, USA The Group owns interests in 64 offshore blocks comprising approximately 216,000gross acres which includes 39 producing oil and gas fields offshore Texas andLouisiana with proved and probable reserves of approximately 30.3 billion cubicfeet of natural gas equivalents, consisting of 14.94 billion cubic feet ofnatural gas and 2.56 million barrels of oil as of 30 June 2005 with a netpresent value of approximately $129 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 Group completed the acquisition of 1,155 kilometers of 2D seismic andanticipates the drilling of the first well during the first half of 2006.Gulfsands has identified 31 exploitation and exploration prospects and leadswith mean resources potential exceeding 1 billion barrels of recoverable oil. • 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 80% owned subsidiary companyDarcy Energy LLC. At the Emily Hawes field, initial gas production commenced inthe summer of 2005. The first well in the Barb Mag oil field has been drilledand wireline logged with some 38 feet of potential net pay and production testedat 1.5 million cubic feet of natural gas and 36 barrels of condensate per day.Production from this well should commence during the first quarter of 2006.Darcy Energy has a 34.375% and 37.5% working interest in these fieldsrespectively. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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