Khurbet East Drilling Update

For Immediate Release 23 April 2009 GULFSANDS PETROLEUM PLC KHURBET EAST DRILLING UPDATE London, 23rd April 2009: 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, and the U.S.A., is pleased to announce that drilling operations have been completed on Khurbet East No 8 well ("KHE-8") with an oil column identified in what was originally anticipated to be a field delineation well located on the southern limits of the Khurbet East Field within Syria Block 26. Following acid stimulation, the KHE-8 well flowed oil under artificial lift at a stabilized rate of 617 barrels of oil per day ("bopd") and without lift assistance at approximately 120 bopd. KHE-8 will therefore be suspended as a future oil producer. The Company is also pleased to confirm that the Khurbet East No 9 well ("KHE-9"), the next development well in the Khurbet East Field, was spudded on 9th April. KHE-8 Delineation Well The KHE-8 well is located 2.7 kilometres to the south of KHE-1 and was designed to provide geologic information on the southern limits of the Khurbet East Field and to be available to serve as a disposal well for the water that is expected to be eventually produced in conjunction with oil production from the Khurbet East field. The well was drilled to a total depth of 2,013 metres and encountered the top of the Cretaceous Massive reservoir at 1,940 metres. Preliminary analysis of the wireline logs and drilling data indicates that the well encountered a 23 metre gross (15 metre net) oil-bearing interval within the Massive reservoir with average porosity in excess of 23% over the net oil-bearing section. The top of the reservoir was encountered approximately 18 metres shallower than the pre-drill prediction. As has been the case with all wells drilled within the Khurbet East Field, a definitive oil-water contact has not been identified in this well as the primary reservoir section lies directly above a relatively impermeable and low porosity section. An open hole drill-stem test of the gross reservoir interval was conducted using artificial lift with nitrogen injection resulting in limited amounts of oil being produced to surface, indicative of poorer reservoir quality than encountered in the central portion of the field. The rig was moved off location to commence drilling of the KHE-9 development well and acid stimulation of the KHE-8 gross reservoir interval was conducted by a coil tubing operation. Post stimulation, the well produced oil to surface under nitrogen lift during an 8 hour initial flow period, achieving a stabilized rate of 617 bopd of 23 degrees API oil with 1-2% being bulk sediment and water ("BS&W"). Under natural flow, the well flowed at an average oil rate of approximately 120 bopd over a 12 hour period through a 40/64 inch choke with a BS&W of 1%. These test results suggest that some form of artificial lift will be required to place this well on continuous production, a practice that is standard for producing oil wells in this region. The KHE-8 well will now be suspended as a future oil producer. KHE-9 Spudded The KHE-9 well was spudded on 9th April and is located approximately one kilometre south of KHE-1. KHE-9 will be the first of three development wells planned to support the expansion of the early production facility. The drilling and completion is likely to take 45 days to complete. Ric Malcolm, Gulfsands CEO, said "We are very pleased with the results of the KHE-8 well as it demonstrates that the Khurbet East Field extends significantly further south than previously interpreted and that commercially attractive oil production rates can be achieved from wells located in poorer reservoir quality some distance away from the central portion of the field." This release has been approved by Richard Malcolm, Chief Executive of Gulfsands Petroleum Plc who has a Bachelor of Science degree in Geology with 29 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. For more information please contact: Gulfsands Petroleum (London) +44 (0)20 7434 6060 Ric Malcolm, Chief Executive Officer Kenneth Judge, Director of Corporate Development +44 (0)7733 001 002 & Communications Buchanan Communications Limited (London) +44 (0)20 7466 5000 Bobby Morse Ben Romney RBC Capital Markets (London) +44 (0)20 7653 4804 Sarah Wharry 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 is currently producing more than 11,000 barrels of oil per day through an early production facility. Block 26 covers approximately 8,250 square kilometres 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 licence expires in August 2010 and is extendable for a further two years. Gulfsands' working interest reserves in Syria at 31 December 2008 were 28.7 mmbbls. 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 44 blocks comprising approximately 138,000 gross acres offshore Texas and Louisiana, which include 30 producing oil and gas fields with proved and probable working interest reserves at 31 December 2008 of 5.1 mmboe. 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 ---END OF MESSAGE--- This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
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