Corporate Update

RNS Number : 4797A

Gulfsands Petroleum PLC

20 February 2014

 

Gulfsands Petroleum Plc

Corporate Update

London, 20^th February, 2014: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, Colombia and the U.S.A. provides the following update on its recent activities.

·    3D data on Rharb permit being processed - final volume to be delivered in early March

·    Fourth well location on Rharb permit to be selected with benefit of quality 3D seismic - drilling anticipated to commence in late March / early April

·    Rig selection process under way for drilling on Fes licence - drilling target to be identified in Q3 with drilling anticipated for Q4

·    2D seismic programme in preparation for Chorbane permit in Tunisia

·    Colombia Joint Venture making progress ahead of 2D seismic programmes in late 2014/early 2015

·    Khurbet East and Yousefieh assets in Syria closed in and secure

Morocco Operations:

Rharb Permits

Acquisition of the 225 square kilometre 3D seismic survey, covering the prospective south-western portion of the Rharb permit was completed in October 2013.  The data acquired in that programme is currently undergoing processing by CGG-Veritas. A fast-track preliminary volume of the processed 3D data has been delivered and is being used for basic analyses and lead identification in the area covered by the new survey.

The final volume of processed data is anticipated to be delivered in early March 2014 enabling the selection of future drilling locations in this area of the Rharb permits utilising the new 3D data rather than the 2D data which was of lesser quality but was the only previously available seismic data over the Rharb permits. It is anticipated that the next well to be drilled, which will be the fourth well in the current programme, can be selected with the benefit of the 3D data acquired in the recent seismic programme.

As contemplated by the Company's drilling contract with COFOR, the drilling contractor, it is anticipated that drilling operations on the fourth well in the Company's Rharb drilling programme will commence in late March or early April although the exact timing of the commencement of operations is dependent upon a number of factors including local weather conditions which currently restrict access to some areas of the permit. A further announcement will be made when drilling operations commence.

Fes Permit

The 650 km 2D seismic programme within the Fes permit is nearing completion.  As a consequence of weather disruption to the data acquisition programme, this programme has taken significantly longer than originally anticipated and therefore there will be some delay in completing the processing of data for use in interpretation and identification of drilling targets. 

As the Fes area is known to be structurally complex, prior to the Company's receipt of the data, it will undergo a number of additional and more sophisticated processes than would usually be the case, including depth migration processing. Notwithstanding the additional time and cost involved in applying these sophisticated processing techniques, it is anticipated that the resulting data set will be significantly enhanced and assist with the interpretation of the data captured during this programme in order to develop the leads into drillable prospects.

It is anticipated that a drilling target will be identified during the 3^rd quarter of this year and accordingly the Company has commenced a process to identify and select a suitable rig for drilling on the Fes licence later this year.

Tunisia operations:

Following the Company having assumed operatorship and increased its working interest in the Chorbane permit to 100% in late 2013, the Company has moved quickly to review existing seismic and well log data on the permit and to prepare for a tender of a 105 km 2D seismic programme over two areas of the permit identified as prospective for the location of the next exploration well on the permit.

The Company is currently in discussion with the Tunisian authorities concerning the final acquisition parameters for this seismic survey prior to undertaking the tender process of contractor selection and completing local permitting approvals. It is anticipated that this tender process should be completed during March 2014 with seismic acquisition to commence following completion of the permitting process. The data captured in this survey will be used to finalise a drilling location within the Chorbane permit for an exploration well to be drilled in early 2015.

Colombia operations:

Following completion of the promoted farm-out of a 45% participating interest in both the PUT-14 and LLA-50 Contracts to local partner, Luna Energy in December 2013 (see announcement dated 23^rd December, 2013), the joint venture partners have moved quickly to undertake the significant number of formalities and preliminary activities required to be completed prior to the commencement of 2D seismic acquisition programmes to be undertaken on both licences.

The Company has established a fully operational office in Bogota which is managed by highly experienced local personnel and together with personnel made available by our local partner, Luna Energy, the joint venture has commenced the process of consultation with the local and indigenous communities in the region and in the permit areas, environmental agencies and government security agencies preliminary to the submission of detailed plans for exploration on both permits later this year and during 2015.

Discussions with operators of licences in the areas of the Company's permits and seismic contractors active in these areas have commenced with a view to coordinating and sharing logistics for 2D seismic programmes being planned on both permits. It is anticipated that following completion of the required consultation and approvals processes which are expected to be completed during the next few months, the Company should be ready to commence a programme of 2D seismic data acquisition on the PUT-14 permit during the 4^th quarter of this year with a similar programme on the LLA-50 permit in early 2015.

Further updates can be anticipated as plans for these seismic programmes are finalised during the course of the next several months.

Syria:

The Company continues to work closely with joint venture partner Sinochem in monitoring the security of the Block 26 joint venture's significant assets in Syria and the wellbeing of our personnel in-country. We are pleased to confirm that the Company's local staff continue to monitor these important assets, the Khurbet East and Yousefieh fields remain closed in and not producing and the infrastructure on the fields remain intact with security in place and continuing to be provided by cooperative arrangements between the central government and local communities.

The Company understands that infrastructure in the region continues to be operational with significant production from other fields in the area operated by the central government.

Mahdi Sajjad, the Company's CEO commented:

"We have been extraordinarily busy with the development of our Company's businesses in Morocco, Colombia and Tunisia. Discussions to divest our residual portfolio of assets in the US Gulf of Mexico are also ongoing. On behalf of the Board, I wish to express my sincere appreciation for the tremendous efforts being made by everyone in our organisation to advance these business initiatives as quickly as possible and to evaluate the new business opportunities which we continue to examine on a regular basis.

We are in the very fortunate position of having the financial and personnel resources to be able to develop our existing businesses in parallel with examining the very interesting new business opportunities that our Board and advisors have brought to the Company. The Board is confident of the Company's prospects for future success in the new countries we have entered and of our eventual return to operations in Syria once EU and other sanctions permit."

This release has been approved by Jason Oden, Gulfsands Vice President: Exploration who has a Bachelor of Science degree in Geophysics with 28 years of experience in petroleum exploration and management and is registered as a Professional Geophysicist.  Mr. Oden has consented to the inclusion of the technical information in this release in the form and context in which it appears.

For further information, please refer to the Company's website www.gulfsands.com or contact:

Gulfsands Petroleum	[phone]
Mahdi Sajjad, Chief Executive Officer Kenneth Judge, Commercial Director
Buchanan	[phone]
Bobby Morse Ben Romney
RBC Capital Markets	[phone]
Stephen Foss Matthew Coakes Daniel Conti
FirstEnergy Capital	[phone]
Majid Shafiq
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.

 

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