Gulfsands gets 25-yr production licence for Yousefieh oil field in Syria

Gulfsands Petroleum PLC (AIM: GPX) said now received confirmation  from  Syria's General  Petroleum Corp that Gulfsands Petroleum Syria Ltd has been granted permission to develop the Yousefieh oil field in Block 26 in the north-east of the country.

The subsidiary has been granted a production licence of 25 years, with the possibility of an extension for a further 10 years.

Gulfsands holds a 50 percent interest in the block and acts as operator. The remainder is held by Emerald Energy PLC (LSE: EEN) which is being taken over by Chinese state-run oil company Sinochem.

Discovery of oil at Yousefieh-1, located approximately 3 kilometres east of the Khurbet East field, was made  in November  2008, with two subsequent appraisal wells being drilled in 2009.

The Yousefieh field was assessed at the end of 2008 as containing gross proved plus probable reserves of 11 million barrels of oil.  A further update on Yousefieh field estimated gross reserves will be provided at the beginning of the second quarter 2010.

First oil from Yousefieh is anticipated early in April 2010. Production will commence from 2 wells, Yousefieh-1 and Yousefieh-3, at an expected initial combined rate of up to 1,000 barrels of oil per day (bopd).

Production from the wells will be closely monitored to assess flow performance and to determine whether the Yousefieh reservoir benefits from the same strong aquifer pressure support as is observed in the nearby Khurbet East field. Gulfsands currently expects that the Yousefieh field has lower reservoir energy than Khurbet East and planning is underway to install permanent down-hole artificial lift equipment in both Yousefieh wells later this year. The company also plans a further development well on Yousefieh in 2010.

It is forecasting production from the Yousefieh field to reach a rate of approximately 6,000 barrels of oil per day by 2012.

Gulfsands CEO Ric Malcolm said: "We are delighted to have received the Syrian government's early confirmation of development  approval for the Yousefieh field and now look forward to commencing production as soon as practicable.  The early production data obtained will provide valuable information that will assist us in optimizing the development of the field."


Khurbet East is currently producing at an average gross production rate of approximately 17,300 bopd through an early production facility.  Block 26 covers approximately 8,250 square kilometres and encompasses existing fields which currently produce over 100,000 bopd, and are operated mainly by the Syrian Petroleum Co.

The current exploration license expires in August 2010 and is extendable for a further two years. Gulfsands' working interest 2P reserves in Syria at December 31 2008 were 35.2 million barrels.

The company 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. The company is engaged in discussions with respect to financing and potential equity partners. 

In the US Gulf of Mexico, 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 million barrels of oil equivalent.  http://www.proactiveinvestors.co.uk/companies/news/12596/gulfsands-gets-25-yr-production-licence-for-yousefieh-oil-field-in-syria-12596.html