TIDMGPX
RNS Number : 2593Q
Gulfsands Petroleum PLC
17 October 2011
Immediate Release 17(th) October, 2011
GULFSANDS PETROLEUM PLC
Syria Block 26 Production and Operations Update
London, 17(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.
As previously referred to in the Company's news release of 6(th)
October, 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. In
addition, routine refinery maintenance operations are currently
underway within Syria, with the result that the Company has been
instructed by the Syrian authorities for the time being to continue
to confine Block 26 gross daily production to approximately 6,000
barrels of oil per day ("bopd"). It is expected that this reduced
level of production will continue until the end of October at the
earliest and therefore average Block 26 gross production for the
month is anticipated to be approximately 6,000 bopd.
The Company and its partner in the Block 26 joint venture,
Sinochem, have received payment in full for all production through
the end of July. Receipt of payment for August production (average
24,112 bopd) would routinely have been expected in the course of
the past week but at the date hereof remains outstanding.
In the context of the inevitable short term disruption
occasioned by the EU imposition of sanctions on Syrian oil exports,
the Board anticipated some corresponding dislocation to the
historical pattern of production and payment. The Company's strong
cash position means that it is well-placed to manage the
consequential short term diminution in revenue.
Further updates will be provided as information becomes
available.
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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