Gulfsands Underscores Production Ops at Khurbet East

Gulfsands has provided the following update on production operations at the Khurbet East Field in Syria's Block 26.

Khurbet East Field Production

The Khurbet East Field is producing at an average daily rate of approximately 10,500 barrels of oil per day from 5 wells (2 vertical and 3 horizontal) with cumulative production of approximately 2 million barrels. Only trace quantities of water have been produced to date. The Field oil production rate has been reduced from previously reported levels as part of a reservoir management strategy to extend the period of water-free production.

The Khurbet East Early Production Facility expansion project is ongoing. The project was projected to be completed during the first quarter of 2009, but following slippage in the delivery of the three-stage separator unit, the Company now anticipates that the facility expansion project will be completed prior to the end of the first half of 2009. Three new production wells will be drilled on the Khurbet East Field following KHE-8 in order to make provision for the increased production capacity of up to 18,000 barrels per day.

Khurbet East 8 Delineation Well

The next well in the drilling campaign is the Khurbet East-8 (KHE-8) delineation well in the Khurbet East Field area. The KHE-8 well will commence drilling operations following completion of drilling operations on the Yousefieh-2 well.

KHE-8 is located on the southern flank of the Khurbet East Field and is designed to provide reservoir and structural information in addition to identifying the oil-water contact, with the potential to be used later as a water disposal well. Approximately 45 days will be required in order to complete operations on the KHE-8 well.

Khurbet East Reserves Reporting

The updated independent reserves report for the Khurbet East Field, which has been anticipated for completion prior to the end of the first quarter 2009, is now expected to be completed early in the second quarter 2009 in order to incorporate information gathered from the drilling of the KHE-8 well.