Operational Update
(Thomson Reuters ONE) - Immediate release 9 September 2009 GULFSANDS PETROLEUM PLCOperations Update:Cumulative Gross Oil Production at Khurbet East Passes 4 MillionBarrelsDrilling Operations Complete at KHE-12Yousefieh-1 Completed for Future ProductionYousefieh-2 Appraisal Well Flows Oil to SurfaceYousefieh-3 Appraisal Well Preparing to SpudLondon, 9th September 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 theCompany's operations at Block 26, Syria where Gulfsands holds a 50%interest and acts as operator.Khurbet East Oil ProductionThe Company is pleased to announce that cumulative gross oilproduction since the commencement of production at the Khurbet EastEarly Production Facility ("EPF") in July 2008 has now passed 4million barrels of oil, with negligible associated formation watercontent.Khurbet East 12 Drilling Operations CompletedDrilling operations have recently been completed on delineation wellKHE-12, located 3.2 kilometres south of KHE-8, previously the mostsoutherly well drilled in the field.The KHE-12 well was drilled to a total measured depth of 2070 metresand encountered the top of the Cretaceous Massive reservoir at ameasured depth of 1984 metres, or 1592 metres true vertical depthsubsea ("TVD ss"), approximately 22 metres deeper than the pre-drillprognosis and below 1570 metres TVD ss, the previously interpretedlowest known level of moveable oil used in determining reserves forthe field.The presence of viscous oil in KHE-12 observed while drilling hasbeen confirmed in a 6 metre core section. Analyses of the drilling,core and petrophysical data indicate that the well encountered a netreservoir section of approximately 10 metres, extending down to 1605metres TVD ss, with average porosity of approximately 18 percent. Thereservoir parameters and viscous oil encountered appear similar inquality to those encountered in KHE-8 and an initial evaluationsuggests that the reservoir section is located in an oil-watertransition zone. However, as with the previous wells drilled in thesouthern portion of the field area, a definitive oil-water contact isnot identified in this well.A wire-line formation pressure and fluid sampler measured formationpressures at depths of approximately 1600 metres TVD ss that areconsistent with the oil gradient previously observed elsewhere in theKhurbet East Field. However, three fluid samples recovered by thiswire-line tool from the same depth contained formation water. Flowtesting operations are planned to be conducted on the reservoirinterval following demobilization of the drilling rig in order todetermine the fluids that will be produced under productionconditions.The implications of the results of this well on field reserves willneed to await a detailed evaluation following testing operations,analysis of oil quality and remapping of the Field.Khurbet East 11 Production TestingThe KHE-11 "horizontal" development well penetrated a 60 metresection of Cretaceous Massive reservoir from approximately 1540 to1562 metres TVD ss. The well has undergone an extended productiontest flowing oil to surface at stabilized rates under natural flow of1660 barrels of oil per day ("bopd") on a 48/64" choke setting.Production from the well has an associated water cut of approximately30% and further production monitoring operations are planned to beconducted in order to determine the source of the water production.Following completion of logging and testing operations the well willbe completed as a future production well, although consideration ispresently being given to the use of a remedial water shut-offoperation that would allow early production from this well to bereceived at the EPF.Yousefieh No.1 Remedial Cementing and Flow TestingThe Yousefieh-1 well, drilled in November 2008, was re-entered inAugust 2009 to conduct remedial cementing operations on theproduction liner and to subsequently flow test the well.Remedial cementing operations were conducted successfully and theproduction liner was then perforated across a 14.5 metre intervalbetween 1942.5 metres and 1957 metres. During subsequent flow testingoperations the well flowed oil of approximately 25 degrees API tosurface at an average rate of approximately 356 barrels per day overa 7 hour period, under natural flow and through a 48/64" choke, withan average water cut of less than 1%. Under artificial lift withnitrogen and through a 2 inch choke, the well flowed over a 2 hourperiod at an average oil rate of approximately 823 barrels per daywith a water cut of less than 1%.Yousefieh-1 is now being completed for future production.Yousefieh-2 Appraisal Well Flows Oil to SurfaceThe Yousefieh-2 appraisal well, located approximately 1.8 km east ofthe Yousefieh-1 well, was drilled in February 2009 to target theeastern limit of the same but thinner Cretaceous reservoirencountered in the Yousefieh-1 discovery well. The well wasre-entered on 7th August 2009 to further evaluate the potential of anoil zone that was tested previously with inconclusive results. Usinga work-over rig, a liner was set over the potential reservoirinterval 1558 to 1571 metres TVD ss. Following acid treatment, thereservoir flowed 17 degrees API oil to surface at an average rate of139 barrels bopd under artificial lift using nitrogen on a 2" chokesetting over a period of 12 hours with an associated water cut of49%.As expected, reservoir and oil properties from this tested zone wereconfirmed to be of lower quality compared to those encountered atshallower depths in the Yousefieh-1 discovery well. However, theresults of this successful oil flow test are expected to havepositive implications for the future commercial development of theYousefieh Field and will be evaluated alongside existing geologicalinformation to better understand the nature of the Yousefieh oilaccumulation.Yousefieh-3 Appraisal WellThe Yousefieh-3 appraisal well, located approximately 500 metres tothe south-east of the Yousefieh-1 discovery well and intended as thesecond appraisal well for the Yousefieh discovery, will be spuddedlater this week. A successful appraisal of the field at this locationis expected to enable the Company to proceed later this year with anapplication for commercial development of the Yousefieh Field.Drilling and testing operations are anticipated to take approximately45 days.Ric Malcolm, Gulfsands CEO, said"Oil production from the Khurbet East Field continues to performextremely well with over 4 million barrels of gross oil produced,along with minimal water production and minimal pressure depletion.The results of the KHE-12 delineation well are welcome, indicatingthe potential for a further southern extension to the Field. We arealso pleased with achieving a successful oil flow test on theYousefieh-2 appraisal well.We now look forward to the testing results of Khurbet East-12 and theupcoming Yousefieh-3 appraisal well."This release has been approved by Richard Malcolm, Chief Executive ofGulfsands Petroleum Plc who has a Bachelor of Science degree inGeology with 29 years of experience in petroleum exploration andmanagement. Mr. Malcolm has consented to the inclusion of thetechnical information in this release in the form and context inwhich it appears.For more information please contact:Gulfsands Petroleum (London) +44 (0)20 7434 6060Richard Malcolm, Chief Executive OfficerKenneth Judge, Director of Corporate Development +44 (0)7733 001 002& CommunicationsBuchanan Communications Limited (London) +44 (0)20 7466 5000Bobby MorseBen RomneyRBC Capital Markets (London) +44 (0)20 7653 4667Sarah WharryABOUT GULFSANDS:Gulfsands is listed on the AIM market of the London Stock Exchange.SyriaGulfsands owns a 50% working interest and is operator of Block 26 inNorth East Syria. The Khurbet East oil field was discovered in June2007 and commenced commercial production within 13 months of thediscovery. This field is producing at an average production rate ofapproximately 14,800 barrels of oil per day through an earlyproduction facility. Block 26 covers approximately 8,250 squarekilometres and encompasses existing fields which currently produceover 100,000 barrels of oil per day, and are operated mainly by theSyrian Petroleum Company. The current exploration license expires inAugust 2010 and is extendable for a further two years. Gulfsands'working interest 2P reserves in Syria at 31 December 2008 were 35.2mmbbls.IraqGulfsands signed a Memorandum of Understanding in January 2005 withthe Ministry of Oil in Iraq for the Maysan Gas Project in SouthernIraq, following completion of a feasibility study on the project, andis negotiating details of a definitive contract for this regionallyimportant development. The project will gather, process and transmitnatural gas that is currently a waste by-product of oil productionand as a result of the present practice of gas flaring, contributesto significant environmental damage in the region. The Company isactively engaged in discussions with respect to financing andpotential equity partners. Gulfsands has no reserves in Iraq.Gulf of Mexico, USAThe Company owns interests in 44 blocks comprising approximately138,000 gross acres offshore Texas and Louisiana, which include 30producing oil and gas fields with proved and probable workinginterest reserves at 31 December 2008 of 5.1 mmboe.Certain statements included herein constitute "forward-lookingstatements" within the meaning of applicable securities legislation.These forward-looking statements are based on certain assumptionsmade by Gulfsands and as such are not a guarantee of futureperformance. Actual results could differ materially from thoseexpressed or implied in such forward-looking statements due tofactors such as general economic and market conditions, increasedcosts of production or a decline in oil and gas prices. Gulfsands isunder no obligation to update or revise any forward-lookingstatements, whether as a result of new information, future events orotherwise, except as required by applicable laws.More information can be found on the Company's websitewww.gulfsands.com---END OF MESSAGE---This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 09.09.2009 - 08:00 Uhr
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