Gulfsands Petroleum plc (AIM: GPX), the oil and gas production, exploration and development company with activities in Syria, Iraq, and the U.S.A., announces that the production of oil commenced at the Khurbet East Early Production Facility (“EPF”) in Block 26, Syria on 21st July 2008.
This early commencement of oil production follows the fast tracking of construction of an EPF for the Massive Reservoir in the Khurbet East Field. The discovery well for the Khurbet East field, KHE-1, completed operations in June 2007.
Gulfsands, the Operator of Syria Block 26 and Dijla Petroleum Company (“DPC”), the jointly owned company established with Syria Petroleum Company ("SPC") to act as the "joint operating company" under the terms of the Production Sharing Contract for Block 26, completed the EPF less than six months after the receipt of approval from the Syrian Petroleum Company and the Government of Syria for the development of the Khurbet East Field (see announcement 13th February, 2008). The commencement of production of oil is several months ahead of the development schedule contemplated at that time.
The first well brought into production is KHE-4, one of the three vertical wells to be tied into the EPF. The Company is now proceeding with un-loading and kick-off operations of the two horizontal wells (KHE-5H and KHE-6H) and will follow with the two remaining vertical wells (KHE-2 and KHE-3). The Company expects that it will take several weeks to complete these operations.
The Company will provide an update on production once all these operations are completed and production rates have stabilised.
Commenting on this important production milestone, Andrew West, Chairman of Gulfsands said:
"From discovery to production within this timeframe reflects the considerable abilities of our technical team and the high level of co-operation with the Government of Syria and Syria Petroleum Company. With production from Khurbet East having started well ahead of schedule, which will ramp up as we tie in additional wells, we look forward to further developing the other opportunities in Block 26 in what is a highly prospective and proven hydrocarbon system in Syria.”
Syria Operations
Gulfsands owns a 50% working interest and is operator of Block 26 in North East Syria. Block 26 covers approximately 8,250 square kilometres and encompasses existing fields which currently produce over 100,000 barrels of oil per day. These fields are operated mainly by the Syria Petroleum Company. The Khurbet East oil field was discovered following the completion of drilling of the KHE-1 well in June 2007 and commenced commercial production within 13 months of the discovery. On 23 August 2007, the Company initiated the first extension period of exploration on Block 26 for a further period of three years.