Gulfsands Petroleum Touts 57% Revenue Increase in '09
Gulfsands Petroleum announced its annual results for the twelve months ended December 31, 2009.
- Revenues up by 57% to $84.4 million (2008: $53.6 million)
- Profit after tax of $27.8 million vs. loss of $5.4 million (restated) in 2008
- Cash from operating activities up by 117% to $43.5 million (2008: $20.0 million (restated))
- Loss of $14.2 million in US business before intra-group interest after impairment charge of $6.4 million (2008 : loss of $0.3 million afer impairment charge of $1.7 million (restated))
- Free cash balances at year-end of $57.6 million (2008 : $36.8 million)
- Group 2P working interest reserves up by 25% to 50.7 mmboe (2008 : 40.4 mmboe)
- 2P working interest reserves in Syria up by 31% to 46.0 mmbbls (2008 : 35.2 mmbbls)
- Working interest production in Syria up by 70% during 2009 to 8,500 bopd at year-end
- Khurbet East early production facility upgraded to 18,000 bopd capacity
- Commercial development approval obtained for Yousefieh field
- Four well exploration campaign in Syria in 2010
- 500km2 of 3D seismic to be acquired on Block 26
- Two exploration wells and additional 3D seismic to be acquired in Tunisia
- US business to be sold when market conditions favorable
Our long-term objective is to deliver significant growth in shareholder value via the exploration and development of oil and gas fields in the Middle East and North Africa ("MENA") region.
We intend to achieve this primarily by investment in early stage exploration and appraisal opportunities but do not rule out the acquisition of more mature assets if the opportunity exists for us to add material value.
Where possible we prefer to act as operator, as this allows us to retain control of project execution risk and financial exposure, but will invest in non-operated situations if we are confident that our own interests are sufficiently protected and the operator is capable of managing the business just as well, if not better, than us.
Our first priority is to maximize the potential in Syria, in particular to capture the available upside in Block 26 before the final expiry of the exploration period in August 2012. We will also be looking for ways to add further assets in Syria, capitalizing on the strength of the relationships that we have forged over the last decade.
We have ambitions to build a significant business in Iraq in the mid to longer term, where we believe that the opportunities for smaller E&P companies will increase in coming years. Our focus will remain outside Kurdistan until we are satisfied that the issues concerning the exploitation of Kurdistan's hydrocarbon potential have been satisfactorily resolved. We will seek to participate in projects that offer significant upside and can deliver returns that are commensurate with the challenges presented by those projects, and we will assess our risk exposure and capital commitment both on an individual project basis and for the country as a whole.
We will seek attractive opportunities to enter other countries in the region, but will scrutinize such opportunities carefully to ensure they represent compelling justification for investment.
We intend to dispose of our US business as and when we assess the time is right to do so. In the meantime we will pursue a strategy of selective reinvestment in this business in order to be in a position to commence a disposal process when market conditions are favorable.
Finally, we aim to follow a relatively conservative financing policy, ensuring that any leverage is kept at prudent levels and that we have the financial resources available to finance necessary investment even in adverse economic conditions.
We consider our key strengths in achieving our strategy to be:
- The relationships that we have formed in Syria and elsewhere in the MENA region, primarily via Mahdi Sajjad, our President
- The reputation for efficient cost effective operation that we have built up in Syria
- The balanced and complementary skill set and expertise of our executive team
- The enthusiasm, competence and dedication of our staff
Commenting on the annual results, Ric Malcolm, CEO of Gulfsands, stated, "I am pleased to report on a year of substantial progress and delivery on production and reserves underpinning a strong financial performance and a maiden profit."
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