Gulfsands Completes First Horizontal Well in Khurbet East Field

Gulfsands Petroleum has completed the drilling operations on the first horizontal development well within the Khurbet East Field (KHE-5H). The KHE-5H well, which flowed oil to surface at an average rate of 2041 barrels of oil per day (bopd) through a 3/8" choke, has been completed and suspended as the fourth oil producer for connection through the Early Production Facility (EPF), scheduled to commence operation by the fourth quarter of 2008.

The KHE-5H well was designed to be drilled and completed as a horizontal producer within the Cretaceous Massive Reservoir (Massive Reservoir) in the Khurbet East Field. The top of the reservoir was encountered within 1 meter of the pre-drill estimate and the well was drilled through a total horizontal section of 300 meters within the reservoir. The well flowed oil to surface at an average rate of 2041 bopd through a 3/8" choke during the final 6 hour flow period. Analyses of data from bottom-hole gauges indicate that these rates were achieved with less than 10 psi pressure drawdown at the reservoir. Preliminary analysis of the downhole pressure data indicates the same excellent reservoir properties as seen in the other Khurbet East wells.

The production information obtained from the KHE-5H well and the vertical production wells within the Massive Reservoir in the Field (KHE-2, KHE-3 and KHE-4) during the EPF phase will be valuable for planning and optimising the design and construction of the Khurbet East permanent production facility.

The Company has plans to drill at least one additional horizontal production well within the Field in the near term for tie-in to the EPF. This will provide the Company with 3 vertical and 2 horizontal producing wells from the Massive Reservoir at Khurbet East during the EPF stage.

"With a further horizontal well to be spudded imminently, Gulfsands is on track to commence commercial production later this year," Gulfsands' Executive Chairman Andrew West said.

Gulfsands owns a 50% working interest and is operator of Block 26 in northeast Syria. Block 26 covers approximately 8,250 square kilometers and encompasses Block 26 called Khurbet East.


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