Discovery

Gulfsands Petroleum PLC
31 January 2006


31 January 2006



Gulfsands Petroleum PLC
('Gulfsands' or 'the Group')


Gulfsands Announces New Offshore Discovery in the Gulf of Mexico


Update on Gulfsands Production in the Gulf of Mexico


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 a new discovery in the Gulf of Mexico.


Gulf of Mexico Exploration Discovery at Eugene Island 58


Gulfsands has participated at a 25% working interest in another exploration
discovery within Eugene Island 58 (EI58).  Following the exploration success at
EI58 announced on 14 December 2005, this new EI58 exploration well has been
drilled to a total measured depth of 13,914 feet (13,380 feet true vertical
depth).  Electric logs acquired during drilling operations indicate the presence
of hydrocarbons within multiple zones, with approximately 188 feet of potential
net pay.  Production casing has been set and completion operations have
commenced. A test of the lowermost productive interval in the well produced
natural gas at a rate of 4.5 million cubic feet per day and 24 barrels of
condensate per day.  First production from this well is scheduled to commence in
April 2006.  The net cost to Gulfsands for the drilling, completion and facility
costs to hook up this well is estimated to be approximately $2.4 million.



Gulfsands will also participate with a 25% working interest in two further
exploration wells in the immediate area during 2006.



Since Gulfsands listed on AIM in April 2005, the Company has participated in the
drilling of seven offshore Gulf of Mexico exploration wells and five of those
seven have been discoveries.



Gulf of Mexico Production Update



Gulfsands' oil and gas production continues increasing toward the levels
achieved prior to Hurricane Rita.  Production has increased to nearly 70% of the
pre-storm levels, or at approximately 2,167 barrels of oil equivalent per day
net to Gulfsands, compared to 40% in mid December 2005.  Continued increases in
daily production volumes are expected over the next several weeks.



John Dorrier, CEO of Gulfsands Petroleum, said:



'This new well, with Gulfsands' higher working interest, should make a notable
contribution to the Gulf of Mexico reserves base as well as an important
addition to 2006 production levels and net cash flow.  The timing of the well
coming on stream should be consistent with improving pipeline transportation
conditions following repairs required due to the hurricane damage of late 2005.'



Enquiries:
Gulfsands Petroleum (Houston)                                001-713-626-9564
David DeCort, Chief Financial Officer

College Hill (London)                                        020-7457-2020
Ben Brewerton / Nick Elwes

Seymour Pierce (London)                                      020-7107-8000
Richard Redmayne
Jonathan Wright





Note to Editors



•         Gulf of Mexico, USA

The Group owns interests in 64 offshore blocks comprising approximately 216,000
gross acres which includes 39 producing oil and gas fields offshore Texas and
Louisiana with proved and probable recoverable reserves of approximately 30.3
billion cubic feet of natural gas equivalents (BCFGE), consisting of 14.94 BCFG
and 2.56 MMBO as of 30 June 2005 with a net present value of approximately $129
million.  Additionally, there is a further 3.4 BCFGE of possible recoverable
reserves with a net present value of approximately $14 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 currently
produce over 100,000 barrels of oil per day from existing fields.  In January
2006 the Group completed the acquisition of 1,155 kilometers of 2D seismic and
anticipates drilling two wells during 2006.  The first well, known as Souedieh
North is scheduled to be drilled in May of 2006 which has the potential to
contain in excess of 100 MMBO.  The second well known as Tigris is scheduled to
be drilled in August of 2006 and has the potential to contain in excess of 500
MMBOE.  Gulfsands has identified 31 total exploitation and exploration prospects
within Block 26 with mean resources potential exceeding 1 billion barrels of
recoverable oil.



An independent reserves report was issued in January 2006 on the Tigris
structure.  The reserves were classified as either oil or gas bearing until such
time as the Company drills and tests the Tigris structure.  The reserve report
concluded that there are 442 BCFG of probable recoverable reserves in the Tigris
structure.  Additionally, the report classified the possible reserves as either
natural gas or oil.  The gas case reflected an additional 442 BCFG in possible
recoverable reserves and an additional 3447 BCFG as prospective resource.  The
oil case reflects 104 MMBO and 64 BCFG in possible recoverable reserves and a
further 408 MMBO and 245 BCFG as prospective resource.  In summary, the natural
gas case equates to total recoverable reserves potential among probable
reserves, possible reserves and prospective resource as 4330 BCFG (722 MMBOE),
while the oil case equates to 512 MMBO and 308 BCFG (combined 563 MMBOE).



•         Iraq

Gulfsands signed a Memorandum of Understanding in January 2005 with the Ministry
of Oil in Iraq for the Misan Gas Project in Southern Iraq and is currently
negotiating the definitive contract for the project.  The project will gather,
process and transmit natural gas that is currently a waste by-product of oil
production in the region and will end the environmentally damaging practice of
gas flaring. Gulfsands has completed a feasibility study and expects to conduct
further technical work and commercial discussions with the Iraq Oil Ministry.



•         Onshore USA

Gulfsands operates onshore in the USA through its 80% owned subsidiary company
Darcy Energy LLC.  At the Emily Hawes field, initial gas production commenced in
the summer of 2005.  The first well in the Barb Mag oil field has been drilled
and wireline logged with some 38 feet of potential net pay and production tested
at 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 fields
respectively.




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