Gulfsands Petroleum Cites Rapid Growth, Significant Milestones in 2008
Gulfsands Petroleum has announced its annual results for the twelve months ended December 31, 2008.
- Production commenced on Khurbet East field in Syria in July, 5 months after commercial approval was obtained
- With only 5 months of production, Syria became Gulfsands' largest producing asset and averaged in excess of 5,000 bopd (net WI) during Q4 2008 with no significant water production or pressure depletion
- Discovery of Yousefieh field in Block 26 in Syria
- 2P working interest reserves in US Gulf of Mexico reduced by 3.8 mmboe to 5.1 mmboe : re-estimation of Syrian reserves still in progress
- Group entitlement production of 0.4 mmbbl from Syria, 0.4 mmboe from US vs. 0.7 mmboe (all from US) in 2007
- Appointment of Ric Malcolm and Andrew Rose as CEO and CFO respectively
- Group head office successfully relocated to London
- Placing of 5.5 million new shares at 170p per share to raise $18.6 million
- Revenues up 44% to $53.6 million (2007: $37.3 million)
- Gross Profit nearly doubled to $21.9 million (2007: $11.9 million)
- Cash flow from Operating Activities more than tripled to $18.7 million (2007: $5.9 million)
- Net Loss of $9.7 million (2007: loss of $1.2 million, restated) after impairment charges on US assets and exceptional administrative expenses
- Available cash balances at year-end of $36.8 million
- Expect commercial development approval for Yousefieh field by end of 2009
- 850 km² 3D seismic acquisition under way in Syria to provide 2010 exploration targets
- Targeting year-end gross production on Khurbet East field of up to 16,000 bopd
- Group capex for 2009 in the order of $40 million funded through operating cash flow
- Proceeding with design and construction of permanent production facility, capacity 50,000 bfpd
- Contract approaching signature for Maysan project in Iraq: actively engaged in discussions regarding financing and potential equity partners
Commenting on the annual results, Ric Malcolm, CEO of Gulfsands, stated, "2008 marked the transformation of Gulfsands into a Middle East focused E&P company with the potential for rapid growth. Beyond bringing Khurbet East into production significantly ahead of schedule and making an additional commercial discovery in Syria, we have also restructured the Company's management and operational teams, strengthened the balance sheet and provided the platform to sustain our significant growth trajectory despite the challenges of the
global recession. We believe that 2009 will deliver the fruits of the hard work carried out in 2008 and we are excited by Gulfsands' prospects for the year ahead."
Gulfsands owns a 50% working interest and is operator of Block 26 in North East Syria. The Khurbet East oil field was discovered in June 2007 and commenced commercial production within 13 months of the discovery. This field is currently producing more than 11,000 barrels of oil per day through an early production facility. Block 26 covers approximately 8,250 square kilometers and encompasses existing fields which currently produce over 100,000 barrels of oil per day, and are operated mainly by the Syrian Petroleum Company. The current exploration licence expires in August 2010 and is extendable for a further two years. Gulfsands' working interest reserves in Syria at 31 December 2008 were 28.7 mmbbls.
Gulfsands signed a Memorandum of Understanding in January 2005 with the Ministry of Oil in Iraq for the Maysan Gas Project in Southern Iraq, following completion of a feasibility study on the project, and is negotiating details of a definitive contract for this regionally important development. The project will gather, process and transmit natural gas that is currently a waste by-product of oil production and as a result of the present practice of gas flaring, contributes to significant environmental damage in the region. The Company is actively engaged in discussions with respect to financing and potential equity partners. Gulfsands has no reserves in Iraq.
Gulf of Mexico, USA
The Company owns interests in 44 blocks comprising approximately 138,000 gross acres offshore Texas and Louisiana, which include 30 producing oil and gas fields with proved and probable working interest reserves at 31 December 2008 of 5.1 mmboe.
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