Gulfsands Begins Yousefieh Appraisal Drilling in Syria's Block 26

Gulfsands noted that following the Yousefieh-1 oil discovery announced in November 2008, drilling operations have commenced on the Yousefieh-2 appraisal well in Block 26.

The Yousefieh-2 well is planned to be drilled as a vertical well to a total depth of approximately 2060 meters, and will target the Cretaceous aged reservoirs found to be oil bearing in the Yousefieh-1 discovery well. The Yousefieh-1 well encountered approximately 63 meters of net oil pay (65 meters gross), and flowed oil to surface at an average rate of 900 barrels of oil per day (bopd) on drill-stem test over a 19 meter interval at the top of the reservoir. The Yousefieh oil discovery established the presence of a new exploration play in this area, and the Company believes that the recently announced 640 square kilometer 3D seismic survey will identify various exploration prospects some of which will be similar to Yousefieh.

The Yousefieh-2 well is located approximately 1.8 kilometers east of the Yousefieh-1 well, and near the currently interpreted eastern limit of the accumulation. The Company expects the Yousefieh-2 well to encounter a thinner reservoir section that will provide valuable information on lateral variations in reservoir characteristics such as facies, porosity and permeability in order to refine the geologic model and to aid in determining reserves and future appraisal or development well locations. The Yousefieh-1 discovery well is located very close to existing infrastructure, with the surface location of the well lying within 3 kilometers of the Khurbet East Early Production Facility (EPF).

The Company expects that drilling operations will be completed within 45 days.