Operations Update
Immediate Release 22 October 2009
GULFSANDS PETROLEUM PLC
Operations Update:
Yousefieh 3 Appraisal Well Intersects 49 Metre Net Oil Column and
Flows Oil
Khurbet East 12 Delineation Well Completed
Khurbet East Gross Oil Production Reaches 5 million Barrels
London, 22nd October 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 provide the following update on the
Company's operations at Block 26, Syria where Gulfsands holds a 50%
interest and acts as operator.
Yousefieh 3 Appraisal Well Intersects 49 Metre Net Oil Column and
Flows Oil
The Yousefieh 3 vertical appraisal well, located approximately 500
metres to the south-east of the Yousefieh 1 discovery well,
encountered the top of the Cretaceous Massive Formation at a measured
depth ("MD") of 1946 metres (1530 metres true vertical depth sub
surface ("TVD SS")) and was drilled to a total depth of 2056 metres
MD (1640 metres TVD SS).
Preliminary interpretation of drilling data and wireline logs has
identified a gross oil column within the well-bore of 60 metres with
a net pay of 49 metres having an average porosity of 19.5% and an
oil-water contact at 1590 metres TVD SS, consistent with that seen at
Yousefieh 1 and 2.
An open-hole drill-stem test was conducted over the interval
1946-1985 metres MD. Yousefieh 3 flowed naturally at an average rate
of 226 stock tank barrels per day of 24-25 degree API oil for 9 hours
on a 32/64" choke setting. No formation water was produced during
this flow period. Analysis of this well test indicates that a
component of this reduced oil flow rate when compared to Yousefieh 1
is the result of formation damage sustained during drilling and
coring operations. The reservoir section will be subjected to an
acid stimulation at a later date with the objective of improving flow
performance.
The well will now be completed as a potential future production well
with the running of a 7" liner over the reservoir section.
Khurbet East 13 Development Well
Following the completion of operations at Yousefieh 3, the rig will
move to the Khurbet East field to drill Khurbet East 13 ("KHE-13"), a
vertical production well to be located approximately 600 metres
southwest of the Khurbet East 9 development well.
Khurbet East 12 Drilling and Testing Operations Completed
Khurbet East 12 ("KHE-12"), located 3.2 kilometres south of the
Khurbet East 8 well, the previous southern most well in the Khurbet
East field, was drilled as a delineation well to determine the
southern extent of the field and identify the field oil-water
contact.
Extended flow testing operations have recently been completed on
KHE-12. Oil was confirmed to be present within a 6 metre section of
core recovered from the top of the reservoir interval but the well
did not flow oil to surface in the presence of artificial lift and
acid stimulation. Formation water only was produced during testing of
a net reservoir interval of 10 metres and initial interpretation of
this flow test result is that the oil observed in KHE-12 core is
residual and lies beneath the Khurbet East field oil-water contact.
The field oil-water contact is now assessed as being located at a
depth shallower than the top of the Cretaceous Massive reservoir
encountered in KHE-12 at 1592 metres TVD SS, but deeper than 1570
metres TVD SS, the lowest level of oil production from Khurbet East
as recorded in well KHE-8. The result of this well will be
incorporated into an assessment of field reserves which is scheduled
to be completed during the first quarter of 2010.
KHE-12 is now expected to be used as a future water disposal well.
Khurbet East Field Oil Production
Cumulative gross oil production from the Khurbet East field has
reached 5 million barrels with minimal water production and little
pressure depletion being observed to date. Average daily gross oil
production during the month of October is in excess of 17,000 barrels
per day.
Ric Malcolm, Gulfsands CEO, said
"The successful outcome of the Yousefieh 3 appraisal well will now
enable the Company to proceed shortly with an application for
commercial development of the Yousefieh field. We continue to be
very pleased with the excellent production performance of the Khurbet
East field and on reaching another important milestone of 5 million
barrels gross production. Additionally, the results from the Khurbet
East 12 well have enabled us to identify the southern extent of the
field and to further narrow down the depth of the field oil-water
contact."
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
Richard 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 4667
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 producing at an average gross production
rate of approximately 17,000 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 license expires in
August 2010 and is extendable for a further two years. Gulfsands'
working interest 2P reserves in Syria at 31 December 2008 were 35.2
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.