Gulfsands Makes Gulf of Mexico Gas Discovery
Gulfsands Petroleum has participated at a 12.5% working interest in an exploration well on Eugene Island 58. This well has been drilled to a total measured depth of 11,655 feet and the wireline logs of the well indicated the presence of hydrocarbons within several zones with approximately 170 feet of potential net pay. This well tested natural gas at a rate of 8.2 million cubic feet per day and 134 barrels of condensate per day. Production casing has been set and completion operations have commenced and the well is scheduled to commence first production in late March of 2006. The net cost to Gulfsands for the drilling, completion and facility costs to hook up this well is estimated to be approximately $986,000.
Upon completion of operations on the Eugene Island 58 discovery well, Gulfsands will participate in a three well exploration drilling campaign in the immediate area, where Gulfsands will be participating with a 25% working interest in each of these wells.
Gulfsands also participated recently at a 13.15% working interest in a sidetrack well on Ship Shoal Block 177 at a net cost of approximately $465,000. This well had approximately 19 feet of net pay and was put on production last week at a gross daily rate of approximately 5 million cubic feet of natural gas and 31 barrels of oil.
The Company also participated at a 5.26% working interest in an exploration well at High Island 528 that was unsuccessful at a net cost to Gulfsands of approximately $188,000.
Since Gulfsands listed on AIM in April 2005, the Company has participated in the drilling of six offshore Gulf of Mexico exploration wells and four of those six have been discoveries.
John Dorrier, CEO of Gulfsands Petroleum, said:
"We are pleased with the overall results of the 2005 exploration programs in the Gulf. These wells put the Company in a good position to move production back to pre-storm levels and above, as offshore pipeline infrastructure owned and operated by third-parties is brought back into service."
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