First Horizontal Development Well Commences in Khurbet East Field

Gulfsands Petroleum plc, the oil and gas production, exploration and development company with activities in Syria, Iraq, and the U.S.A., has commenced the drilling of the first horizontal development well within the Khurbet East Field ("KHE-5H"). The KHE-5H well will be completed and suspended as an oil producer for connection through the Early Production Facility ("EPF"), scheduled to commence operation by the fourth quarter of 2008.

The KHE-5H well is designed to be drilled and completed as a horizontal producer within the Cretaceous Massive Reservoir in the Khurbet East Field. Engineering studies undertaken by the Company indicate that the use of horizontal completions will improve well-bore productivity as well as increase ultimate oil recovery from the Massive Reservoir. The KHE-5H well is designed to be drilled to a total measured depth of approximately 2900 metres, which includes a horizontal completion length within the Massive reservoir of approximately 700 metres. The Company estimates that approximately 60 days are required for the drilling, evaluation and completion of the KHE-5H well.

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.

Gulfsands' CEO, John Dorrier, said, "KHE-5H will be the Company's first horizontal completion in the Khurbet East Field. The technology is widely used in the Fields adjacent to Khurbet East, where it has proven an effective technique for maximizing oil recovery and increasing production rates."