Khurbet East Update

KHE-3 appraisal well testing averages 3,420 bopd

Report on commercial development of Khurbet East expected mid January

Khurbet East Reserves and Resources Report due before end January

3D seismic programme completed over Khurbet East Field


London, 7th January, 2008:  Gulfsands Petroleum plc ("Gulfsands", the
"Group" or the "Company" - AIM: GPX), the oil and gas production,
exploration and development company with activities in the U.S.A.,
Syria and Iraq is pleased to announce that the Company has
successfully completed the drilling, logging and testing of the
Khurbet East-3 (KHE-3) well, the second appraisal well on the Khurbet
East discovery within Block 26, Syria. The well flowed 26 degree API
oil on drill-stem test at an average, stabilised production rate of
3,420 barrels per day (bopd).


KHE-3 Well

Gulfsands, the operator and 50% working interest owner in Block 26
has now completed operations on the KHE-3 well.  The objectives of
this second appraisal well were to acquire reservoir and structural
information on the primary objective Massive Formation southeast of
the KHE-1 discovery well, and to undertake a production test of the
entire main reservoir section.

The top of the Massive Formation reservoir was encountered within 3
metres of the pre-drill prognosis and at a similar depth to the KHE-1
discovery well and the KHE-2 appraisal well. Third party
interpretation of the wireline logs obtained from the KHE-3 well
indicates a similar reservoir interval in the Massive Formation as
seen in the KHE-1 and KHE-2 wells with reservoir properties similar
to or slightly better than those encountered in the KHE-1 and KHE-2
wells. A definitive oil-water contact has still not been identified
within the main reservoir interval.

After completion of logging operations, the Company carried out a
drill-stem test over the entire Upper Massive reservoir interval. The
oil production rate continued to improve during the course of the
test reaching a maximum daily production rate of 3,560 bopd near the
end of the main flow test period. The average, stabilised production
rate was 3,420 bopd with 206,000 cubic feet of natural gas per day
through a ¿ inch choke.  Preliminary analysis indicates that the oil
gravity is 26 degree API, which is consistent with the oil
encountered in KHE-1 and KHE-2.

The information obtained from the KHE-3 well has been provided to
independent engineering consultants, RPS Group plc, for assessment
and inclusion in a report on commercial development of the Khurbet
East Field. The Company expects to submit this report to the Syrian
Petroleum Company and the Syrian Government for approval in mid
January 2008.  RPS Group plc has also been requested to provide a
report on the reserves and resource estimate for the Khurbet East
Field and this is anticipated to be delivered during the second half
of January 2008.


3D Seismic

The Company has also completed the 3D seismic acquisition programme
over the Khurbet East Field.  The Company is now proceeding with
seismic processing and the interpretation of these data will be used
to assist in the selection of additional development well locations
in the Khurbet East Field during 2008 and 2009 as well as any
"near-field' exploration locations immediately adjacent to the Field.

The Company has also completed approximately 60% of the acquisition
of a 240 square kilometre "exploration" 3D seismic programme located
to the south of Khurbet East.  These data are expected to assist in
maturing exploration leads within the Khurbet East "play fairway"
into "drill ready" prospects. This seismic programme is expected to
be completed by the end of January 2008 with seismic processing and
interpretation to follow.

Forward Programme

Following receipt of Syrian Government's and the Syrian Petroleum
Company's ("SPC") approval of the submitted report on the prospects
for commercial development of the Khurbet East Field and the
Company's plans for the installation of an early production system,
Gulfsands and its joint venture partner intend to proceed as soon as
practicable with development of Khurbet East Field. Subject to the
early receipt of the Syrian Government's and SPC's approval to the
Company's development plans and completion of logistical and
commercial arrangements, the partners will be targeting to achieve
first oil production in the fourth quarter of 2008.


The joint venture also intends to drill at least one exploration well
during 2008 following the completion of interpretation of the 3D
seismic data currently being acquired and processed.


Gulfsands' CEO, John Dorrier, said:

"The excellent production test from the Massive Formation at KHE-3
demonstrates the high oil flow rates attainable from wells in the
Khurbet East Field.  The Company is now focused on working with its
partners to achieve first oil production as early as practicable in
2008.  The Khurbet East 3D seismic surveys also cover a series of
additional promising subsurface features, several of which the
Company expects to drill during the current exploration period of the
Contract."

This release has been approved by Jason Oden, Gulfsands Exploration
Manager, who has a Bachelor of Science degree in Geophysics with 23
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.


ABOUT GULFSANDS:

Gulf of Mexico, USA
The Company owns interests in 54 offshore blocks comprising
approximately 193,000 gross acres which includes numerous producing
oil and gas fields offshore Texas and Louisiana with proved and
probable recoverable reserves net to Gulfsands at 31 December 2006 of
41.5 BCFGE (6.9 MMBOE), consisting of 27.3 BCFG and 2.36 MMBO.

Onshore USA
Gulfsands owns interests in two oil and gas fields onshore Texas, USA
(98.5% working interest in Emily Hawes Field and 37.5% working
interest in Barb Mag Field) with proved and probable recoverable
reserves net to Gulfsands at 31 December 2006 of 3.1 BCFGE (0.5
MMBOE), consisting of 2.8 BCFG and 57,000 barrels of oil.

Syria
Gulfsands owns a 50% working interest and is operator of Block 26 in
North East Syria.  Block 26 covers approximately 8,250 square
kilometres and encompasses existing fields which currently produce
over 100,000 barrels of oil per day. These fields are operated by
third parties including the Syria Petroleum Company.  In the first
half of 2007 Gulfsands announced an oil and gas discovery on Block 26
called Khurbet East.  This discovery is
currently under appraisal.  The Company initiated the first extension
period of exploration on Block 26 for a further period of three years
commencing on 23 August 2007.  The Company has also formed a
strategic partnership with Cham Holding for acquiring oil and gas
projects in Syria and Iraq.

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 and following completion of a feasibility study on the project
is negotiating details of 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.

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.

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

Gulfsands Petroleum (Houston)                        + 1-713-626-9564
John Dorrier, Chief Executive Officer
David DeCort, Chief Financial Officer

Gulfsands Petroleum (London)                         020-7182-4016
Kenneth Judge, Director of Corporate Development     07733-001-002

Buchanan Communications Limited (London)             020-7466-5000
Bobby Morse
Nick Melson
Ben Willey

Landsbanki Securities (UK) Limited (London)          020-7426-9000
Jeff Keating
Sebastian Jones

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