Gulfsands Commences Drilling Khurbet East Delineation Well
Emerald Energy has advised that Gulfsands Petroleum, the Operator in Block 26, Syria, will today host an analyst presentation which will include technical aspects of the Block 26 asset. A copy of their presentation will be available on the Gulfsands website (www.gulfsands.com). The presentation will contain the following new information which has not previously been announced.
Khurbet East No.8 Well Spud
Drilling operations have commenced on the Khurbet East No.8 delineation well in the Khurbet East Field. The well is designed to provide geologic information on the southern limits of the Khurbet East Field, establish the oil-water contact and to have the potential to be used as a water disposal well in the future. The Khurbet East No.8 well is expected to take approximately 45 days to drill and evaluate.
Yousefieh Preliminary Volumetrics
Based on a preliminary evaluation of the data acquired in the Yousefieh No.1 discovery well and the Yousefieh No.2 appraisal well, Gulfsands estimates the range of oil initially in place, on a gross basis at stock tank conditions, to be 27.2 (P90), 48.5 (P50) and 73.9 (P10) million barrels. Further work is required to determine the expected range of recovery factors and, hence, recoverable reserves.
The Operator plans to submit a commerciality application for the Yousefieh discovery and, in the third quarter of 2009, to drill a second appraisal well.
Khurbet East Field Production and Development
Gross oil production from the Khurbet East field averaged 8,470 barrels per day during the 163 day period between commencement of production and the end of 2008 (unaudited). The average sale price during this period was US $61 per barrel (unaudited).
During 2009, Gulfsands expects gross oil production to average between 12,500 and 13,000 barrels per day with a rate at the end of the year of approximately 16,000 barrels per day. Gross development capital expenditure is expected to be US $37 million, consisting of 4 development wells (Khurbet East Nos. 8, 9, 10 and 11 at a total cost of US $14 million), full field development facilities for Khurbet East (US $20 million) and miscellaneous items (US $3.5 million). The total cost of the full field development facilities for Khurbet East, to be incurred in 2009 and 2010, is estimated to be in the range of US $45 to $50 million. The Operator estimates that the Khurbet East field may be fully developed with a total of 15 production wells, including the existing 5 wells currently on production and 3 production wells expected to be drilled in 2009.
Gulfsands expects gross exploration and appraisal capital expenditure in 2009 to be approximately US $22 million, consisting of 3 wells (Yousefieh No.2, Yousefieh No.3, and one further exploration well at a total cost of US $12 million) and the 3D seismic survey currently being acquired (US $10 million).
The area of the 3D seismic survey has been increased to approximately 850 square kilometers to tie into existing 3D seismic surveys in the area and to assist in better understanding the new exploration play demonstrated by the Yousefieh discovery.
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