TIDMGPX
RNS Number : 3400D
Gulfsands Petroleum PLC
28 January 2015
Gulfsands Petroleum Plc
Corporate Update
London, 28(th) January, 2015:Gulfsands Petroleum plc
("Gulfsands", the "Group" or the "Company" - AIM: GPX), the oil and
gas production, exploration and development company with activities
in Syria, Morocco, Tunisia and Colombia, provides the following
update on the Group's financial position, drilling activities in
Morocco and the Group's activities generally.
Financial Position
-- US$20 million Arawak Energy Loan Facility drawn to US$10 million
-- Cash balances for the Group at 23(rd) January, 2015 were
US$23.5million of which US$12 million was free cash (inclusive of
US$10 million drawn Arawak Energy Loan Facility)
-- Estimated current liabilities less receivables of approximately US$7.5 million
-- Estimated minimum capital expenditure commitments for 2015 of approximately US$2.5 million
Morocco Drilling Activity
-- Further DRC-1 well testing confirms good flow rates and excellent gas bearing reservoir
-- DOB-1 well spudded and drilling activity commences
-- Rharb Sud and Rharb Centre licences extended
-- Technical work ongoing to evaluate prospective oil targets on
Moulay Bouchta, Rharb Sud and Fes Permits.
Corporate Update:
Arawak Energy Loan Facility
Drawings under the US$20 million Arawak Energy Loan Facility
(See announcement of 19(th) January, 2014) are currently US$10
million.
Further drawings under the Arawak Energy Loan Facility are
dependent upon the continued availability of the Arawak Loan
Facility. Following communication received from Arawak Energy on
22(nd) January, 2015, the Company has been advised that Arawak
Energy has reserved all of its rights under the Facility Agreement
which rights may, in certain circumstances, include the right to
terminate the Loan Facility and to require repayment of all moneys
advanced under the Arawak Loan Facility plus a fee of US$1 million.
(see announcement of 23(rd) January, 2015).
Status of Group's Finance
With the Arawak Energy Loan Facility in place and fully
utilised, the Executive Directors anticipate that the Group will be
fully funded to drill and evaluate the DOB-1 well and monetise the
initial Rharb gas discoveries. Assuming in addition the receipt of
revenues from gas production, the Executive Directors anticipate
that the Group should be funded to complete its Rharb concession
commitments and to progress its work in identifying drillable oil
prospects. The work programme beyond that will be dependent on the
financial position of the Group and the availability of further
funding, particularly from within the industry.
Cancellation of the Arawak facility would require a
re-assessment of the Group's financing requirements and achievable
work programme. Should the Arawak facility be terminated Gulfsands
would need to pay back within 90 days the monies drawn down to
date, namely US$10 million plus a fee of US$1 million. The Company
will have to examine all possible options to ensure the
availability of funding to repay monies owning under the Arawak
facility and to continue to finance the Group's corporate
activities. These options will include consideration of the raising
of equity although the availability and terms upon which equity
might be raised has yet to be established.
The Non-executive Directors wish to make clear that, as
previously communicated to shareholders, depending on the outcome
of the forthcoming General Meeting, both the Group's future work
programme and further funding requirements may be subject to
further fundamental review.
Morocco:
Rharb Drilling Operations
Gas well testing on the recent Dardara Southeast 1 discovery
well ("DRC-1"), located within the Rharb Centre Permit in Northern
Morocco has now been concluded and the well suspended as a future
gas production well.
Additional well testing of the DRC-1 well for a further period 8
hours was conducted after the initial testing of the well. During
this further period, the gas flow rate reached 9.4 Million of
standard cubic feet per day on a 40/64(th) inch choke, with no
associated production of formation water or sand. Subsequently a 48
hour down hole pressure survey was conducted with the objective of
supporting an assessment of connected volumes with this information
to be used in preparation of the Group year end reserves and
resources report to be published with the Company's annual
report.
The rig was then moved to the Douar Ouled Balkhair ("DOB-1")
drilling location where the DOB-1 well was spudded on 27(th)
January. Operations on the DOB-1 well are expected to take 28 days
in total.
Following evaluation on the DOB-1 well, management will assess
its further exploration drilling options with respect to Rharb
Centre permit gas prospects whilst they also consider options to
monetise the gas discoveries to date. Following DOB-1, Gulfsands
has three remaining well commitments across the Rharb concession
including the Rharb Sud permit, the terms of which have now been
extended until 9(th) November, 2015. Failure to fulfil the
Company's work programme obligations including these drilling
commitments could result in the potential loss of the Group's
interests in the Rharb permits. Funding of these work programme
obligations is presently dependent upon the continued availability
of the Arawak Energy Loan Facility or alternate financing being
available to the Group.
Plans for Monetisation of Rharb Centre Gas
The Group's priority is to monetise gas production from Rharb
Centre Permit area as soon as possible. The Executive Directors
expect to see production from the LTU-I well in the first quarter
of this year, and the drilling of additional wells such as the
DOB-1 well and a well targeting the adjacent potential identified
from the DRC-1 drilling aimed at helping sustain future contracted
production volumes. Funding of these plans is presently dependent
upon the continued availability of the Arawak Energy Loan Facility
or alternate financing being available to the Group. Additional
successful commercial gas discoveries would be brought on to
production as soon as possible via tie-back to existing pipeline
and gas distribution infrastructure and subject to the availability
of funding.
The Non-executive Directors wish to make clear that they fully
endorse the objective of monetising the Rharb Gas at the earliest
possible opportunity. They are unable at this juncture to associate
themselves with estimates as to the likely timing of such
monetisation.
Evaluation of Oil Prospective Drilling Targets: Moulay Bouchta,
Rharb Sud and Fes Permits
The Moulay Bouchta, Rharb Sud and Fes permits are all considered
prospective for oil and encompass a working petroleum system, with
many oil seeps encountered at surface within these Permits, and the
Moulay Bouchta permit includes rights to evaluate three previously
developed and produced shallow oil fields.
Working closely with the technical staff of ONHYM, the Morocco
regulator of the oil and gas sector, the Company's technical teams
have been consolidating, updating and interpreting a very
significant amount of technical data that covers the three permits,
and includes 2D and 3D seismic and well data from more than 450 old
wells on the permit area.
Work is also underway to reprocess and upgrade the 2D data
received in the first half of 2014 from the Company's 650 kilometre
2D seismic programme on the Fes permit. This seismic data
reprocessing is being carried out in Calgary, Canada, by
specialists using processing techniques not previously applied in
Morocco. The Group is evaluating additional 2D seismic data
acquisition programmes on the oil prospective permits during the
course of 2015. It remains the Group's objective to identify one or
more oil prospective drilling locations on these three permits by
the fourth quarter of 2015.
The Group's technical teams have already identified a number of
prospective targets on each of the Moulay Bouchta, Rharb Sud and
Fes permits and anticipate the Group's December 2014 financial
statements will reflect an uplift in the Group's audited, un-risked
prospective resources.
Extraordinary General Meeting
Shareholders are reminded that this meeting is to be held at
3.00pm on Tuesday 3(rd) February 2015 and that Proxy Forms
completed by registered shareholders must be returned to the share
registrar, Capita Registrars, not later than 3.00pm Friday 30(th)
January, 2015.
This release has been approved by Ian Conway, Gulfsands
Executive Director Technical and Operations, who has Bachelors and
Masters degrees in Physics and has 28 years' of experience in
petroleum exploration and management. Mr. Conway has consented to
the inclusion of the technical information in this release in the
form and context in which it appears.
For further information on the matters referred to in this
announcement, please refer to the Company's website
www.gulfsands.com
Gulfsands Petroleum +44 (0)20 7024 2130
Mahdi Sajjad, Chief Executive Officer
Kenneth Judge, Commercial Director
Buchanan +44 (0)20 7466 5000
Bobby Morse
Ben Romney
RBC Capital Markets +44 (0)20 7653 4000
Matthew Coakes
Daniel Conti
Jakub Brogowski
FirstEnergy Capital +44(0)20 7448 0200
Jonathan Wright
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCQVLBLEFFZBBK
Gulfsands Petroleum (LSE:GPX)
Historical Stock Chart
From Oct 2024 to Nov 2024
Gulfsands Petroleum (LSE:GPX)
Historical Stock Chart
From Nov 2023 to Nov 2024
