TIDMGPX
RNS Number : 6361P
Gulfsands Petroleum PLC
06 October 2011
Immediate Release 6(th) October, 2011
GULFSANDS PETROLEUM PLC
Syria Block 26 Production and Drilling Activities Update
London, 6(th) October, 2011: Gulfsands Petroleum plc
("Gulfsands", the "Group" or the "Company" - AIM: GPX), the oil and
gas production, exploration and development company with activities
in Syria, Iraq, Tunisia, Italy and the U.S.A., provide the
following update on oil production in Syria.
Block 26 Production Operations
During September 2011, Gulfsands Petroleum was instructed by the
Syrian Oil Ministry to reduce Block 26 production in line with
reduced availability of crude storage capacity within the country.
Production operations on Block 26 have consequently been impacted
such that average gross production during the month of September
was 14,547 bopd versus the average for the month of August of
24,112 barrels of oil per day ("bopd"). As of October 3(rd) daily
gross production had been reduced further and is currently steady
at approximately 6,000 bopd.
During this period of reduced offtake, the opportunity has been
taken to undertake a complete shut-in of the Yousefieh field in
order to conduct a long term field pressure build-up survey. Memory
pressure gauges have been placed in all Yousefieh wells prior to
the shutdown of the field on 26(th) September. This data
acquisition exercise represents an opportunity to determine average
field reservoir pressure to a level of accuracy that would not
otherwise be possible to achieve when the field is under normal
production conditions. Measuring reservoir pressure in this way
will enable a more accurate calculation of field in-place volumes
and recoverable reserves to be made.
The outlook for Block 26 oil production during October remains
uncertain as refinery maintenance work within the country may
contribute to further temporary restrictions on production
levels.
An update on Block 26 production levels will be provided as soon
as further information becomes available.
Block 26 Drilling Operations
Wardieh Exploration Well
Drilling operations have concluded on the Wardieh-1 exploration
well after a zone of live asphaltic hydrocarbons was encountered
while drilling, overlying a porous reservoir zone, the combination
of which threatened the safety of the drilling operation. For
safety reasons, the well was plugged and abandoned at a depth of
2229 metres Measured Depth below Rotary Table ("m MDBRT"), 271
metres shallow to the planned total depth for the well.
The asphalt zone was encountered in a layer overlying and within
the upper part of the exploration objective in the Cretaceous
Shiranish and Massive formations. Wireline logging operations were
successfully completed prior to the continuation of drilling
operations. A high density oil-based drilling fluid was deployed to
replace the water-based system to assist with the control of
influxes of asphalt and maintain borehole stability. However, upon
drilling ahead, a highly porous and potentially cavernous zone was
encountered resulting in the complete loss of the heavier drilling
fluid, which resulted in the decision to halt operations for safety
reasons.
The Wardieh-1 exploration well was designed as a test of a
combined structural and stratigraphic trap in formations of
Cretaceous age. The well was located approximately 16 kilometres to
the southeast of Yousefieh Field and targeted a new stratigraphic
exploration play.
The exploration objectives within the Wardieh area remain of
interest due to the presence of live asphaltic hydrocarbons and
underlying highly porous reservoir rocks. A similar occurrence of a
hazardous asphaltic zone overlying a productive oil field of
Cretaceous age is found in Syria at the North Karatchok field which
is located 25 kilometres to the northeast. The company will conduct
a comprehensive geological and operational review of the Wardieh-1
well result prior to taking a decision on whether to conduct
further drilling and to establish the optimal drilling procedure to
ensure a safe and successful operation.
Khurbet East 20 Delineation Well Operations have been completed
on the Khurbet East 20 ("KHE-20") vertical delineation well located
in the north flank of the Khurbet East field, approximately 650
metres to the east of successful horizontal production well KHE-19H
and approximately 830 metres to the north-east of successful
vertical production well KHE-18. The KHE-20 well location was
selected as a test of the presence of good quality karst reservoir
on the field's northern flank as predicted from a newly developed
field mapping methodology utilizing non-standard seismic data
interpretation techniques. Mapping of the Khurbet East karst
reservoir to date has proved challenging due to the non-reflective
properties of this type of rock.
The KHE-20 well encountered the hydrocarbon bearing Cretaceous
Massive Formation at a depth of 1933 metres Measured Depth Below
Rotary Table ("m MDBRT"), 1529 metres True Vertical Depth Sub-Sea
("m TVDSS"), 3 metres shallow to the prognosis indicated from the
new mapping technique. Interpretation of wireline logs indicated a
high quality gross porous karst reservoir interval of 38.6 metres
with a net oil column of 29.8 metres, average porosity of 20% and
average oil saturation of 82%. No oil-water contact has been
observed in this well.
An open hole well test was conducted over a 36 metres gross
interval from1933-1969m MDBRT (1529-1565m TVDSS), during which the
well flowed at a rate of 1897 barrels of oil per day ("bopd") for a
6 hour period on a choke setting of 48/64(th) inch at a wellhead
pressure of 103 psi and with an associated water-cut of 1% by
volume. Oil quality and formation pressure were recorded as being
in line with surrounding Khurbet East production wells.
Forward Drilling Programme
Gulfsands drilling operations in Syria Block 26, using the
Crosco E-401 and M-501 drilling rigs, will continue as planned on
the Yousefieh 8 sub-horizontal development well ("Yousefieh-8H")
and on the Khurbet East 102 Triassic reservoirs appraisal well
("KHE-102") respectively.
The Yousefieh-8H development well targets recoverable oil
volumes located on the south flank of the Yousefieh field. The well
is located 315 metres to the south of the Yousefieh-3 vertical
production well and is designed to be drilled in an east-northeast
direction with a planned sub-horizontal open hole reservoir section
of approximately 360 metres. The production target for this well is
to add an incremental 500 bopd to Yousefieh field production.
The KHE-102 vertical well is targeted to appraise the as yet
undrilled northern flank of the Khurbet East field Triassic Butmah
and Kurrachine Dolomite reservoirs. This well will be located
approximately 1100 metres north north-east of the KHE-1 Khurbet
East field Triassic reservoirs discovery well, and will obtain key
information on reservoir top structure and quality, the depth of
the fluid contacts and on the properties of the hydrocarbons
encountered.
The results of these drilling operations will be the subject of
a future news release.
This release has been approved by Richard Malcolm, Chief
Executive of Gulfsands Petroleum Plc who has a Bachelor of Science
degree in Geology with 30 years of experience in petroleum
exploration and management. Mr. Malcolm has consented to the
inclusion of the technical information in this release in the form
and context in which it appears.
ABOUT GULFSANDS:
Gulfsands is listed on the AIM market of the London Stock
Exchange.
Syria
Gulfsands owns a 50% working interest and is operator of Block
26 in North East Syria. The Khurbet East oil field was discovered
in June 2007 and commenced commercial production within 13 months
of the discovery. This field has been producing at an average gross
production rate of approximately 21,500 barrels of oil per day
through early production facilities during August 2011. A second
field discovery, the Yousefieh field, was brought on-stream in
April 2010, and has been producing at approximately 2,600 barrels
of oil per day. Current restrictions on Block 26 oil production
which came into force during September 2011 are discussed elsewhere
in this release. Block 26 covers approximately 5,414 km(2) and
encompasses existing fields which currently produce over 100,000
barrels of oil per day, and are operated mainly by the Syrian
Petroleum Company. The current exploration license expires in
August 2012. Gulfsands' working interest 2P reserves in Syria at 31
December 2010 were 53.6 mmbbls.
Tunisia
Gulfsands is acquiring working interest positions in two
exploration permits in Tunisia (Chorbane and Kerkouane Permits) and
one exploration permit in Southern Italy (G.R15.PU) from ADX Energy
Ltd the operator of all three permits. The Company's interest in
these permits remains subject to the completion of the Company's
farm obligations and various approvals from the governments of
Tunisia and Italy.
Kerkouane Permit - Offshore Tunisia
G.R15.PU Permit (Pantelleria Permit) - Offshore Italy
G.R15.PU, is located offshore the island of Pantelleria
southwest of Sicily in Italian waters and the Kerkouane Permit is
located offshore northeast Tunisia. The two permits are contiguous
and comprise a total area of approximately 4,500 km(2) .
The operator has identified multiple leads and targets on these
permits. Drilling operations were recently completed at the
Lambouka-1 well where gas was encountered in the Abiod Formation.
However, as a result of down-hole problems, no fluid samples or gas
flow were established. The well was suspended with the intention of
re-entering at a later date and drilling and testing the reservoir
in a sidetrack hole up-dip of the existing discovery.
Gulfsands has completed its earn commitments with respect to the
Kerkouane and Pantelleria Permits with the drilling of the
Lambouka-1 well. Gulfsands has earned a 30% working interest in
both permits by paying approximately 35% of the cost the Lambouka-1
well and reimbursing the operator for a portion of various
pre-drill costs that include a recently completed 3D seismic
programme.
Chorbane Permit - Onshore Tunisia
The Chorbane permit is located in central Tunisia and covers an
area of 2,428 km(2) . The permit is surrounded by several producing
oil fields and extensive oil & gas infrastructure. Gulfsands'
work commitment for the Chorbane permit included the drilling of
one exploration well, the Sidi Dhaher- 1 well, which was concluded
recently with the announcement on 3(rd) October, 2011 of a
potential oil discovery. Gulfsands was responsible for paying 80%
of the first $5 million in drilling costs, and 40% of the drilling
costs in excess of $5 million, so as to earn a 40% interest in the
permit.
A number of prospects and leads have been indentified within the
permit, the most prospective being a large tilted horst block
("Sidi Daher") where the operator has identified multiple potential
targets estimated to hold recoverable mean un-risked prospective
resources of 175 billion cubic feet of gas ("bcfg") and 44 million
barrels of oil from Tertiary and Cretaceous aged reservoirs.
Iraq
Gulfsands signed a Memorandum of Understanding in January 2005
with the Ministry of Oil in Iraq for the Maysan Gas Project in
Southern Iraq, following completion of a feasibility study on the
project, and is negotiating details of a definitive contract for
this regionally important development. The project will gather,
process and transmit natural gas that is currently a waste
by-product of oil production and as a result of the present
practice of gas flaring, contributes to significant environmental
damage in the region. The Company is actively engaged in
discussions with respect to financing and potential equity
partners. Gulfsands has no reserves in Iraq.
Gulf of Mexico, USA
The Company owns interests in 14 leases offshore Texas and
Louisiana, which include 9 producing oil and gas fields with proved
and probable (2P) working interest reserves at 31 December 2010 of
2.1 mmboe (figures adjusted for the disposal of non-core properties
in December 2010 and September 2011).
Certain statements included herein constitute "forward-looking
statements" within the meaning of applicable securities
legislation. These forward-looking statements are based on certain
assumptions made by Gulfsands and as such are not a guarantee of
future performance. Actual results could differ materially from
those expressed or implied in such forward-looking statements due
to factors such as general economic and market conditions,
increased costs of production or a decline in oil and gas prices.
Gulfsands is under no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by applicable
laws.
More information can be found on the Company's website
www.gulfsands.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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