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Gulfsands Petroleum reach 7 million barrel production milestone

Gulfsands Petroleum’s (AIM:GPX) Khurbet East Field has reached a significant production milestone, with 7 million barrels of cumulative oil production now complete. The oilfields average daily gross oil production continues at approximately 17,000 barrels oil per day (bopd), with minimal water production or pressure depletion to date. The company also announced it had completed the first of the four Exploration wells planned for 2010.

“We are obviously pleased with the continuing strong performance of the Khurbet East Field and short time it has taken to reach this production milestone",  Gulfsands CEO Ric Malcolm said.

In Syria the Zaman-1 well, located 4.5km south of the producing Khurbet  East Field, encountered the top of the Cretaceous Massive Formation at approximately 2,086 metres Measured Depth (NYSE:MD). Zaman-1 well has been interpreted as having a small non-commercial oil reservoir and has consequently been plugged and abandoned. Gulfsands’ 50% share of the Zaman-I exploration cost is estimated at approximately US$450,000 after cost recovery.

“The data from this drill stem test suggests that good quality reservoirs can be encountered to the south of the Khurbet East Field which is encouraging for future exploration in this area and something we were keen to establish with this well”, Ric Malcolm said. "The results of Zaman-1, the first of our four exploration wells this year, will be evaluated in order to understand the implications for future exploration in the area immediately south of the Khurbet East field”.

At Zaman-1, wireline logs indicated that approximately 4 metres of net reservoir pay of average porosity 17% were encountered near the top of the well. However open-hole testing between 2,086 and 2,100 metres MD, flowed formation water at a rate of approximately 1,460 barrels per day with only traces of oil being observed at surface. Below 2,100 metres MD, the reservoir was evaluated as being water bearing and tight with secondary porosity attributable to natural fractures.

The next exploration well, Hanoon-1 will target the Cretaceous Massive formation less than 10 kilometres north of Khurbet East Field. The drill rig is now being mobilised.

Development of the Khurbet East Field continues as the Early Production Facility continues to yield positive production rates. Gulfsands noted that the KHE-13 vertical development well, brought into production in January, began to produce formation water, with the ‘water-cut’ rising to approximately 15%. Consequently KHE-13 will now be shut in until the Central Processing Facility (NYSE:CPF) is complete, at which point its water separation and processing capabilities will comfortably handle the water produced in association with KHE-13’s oil.

KHE-13, which is located approximately 1.5km south-west of the KHE-1 discovery well, confirmed the production capability of the southern portion of the Khurbet East Field. The well was brought into production in January and produced approximately 300 bopd. Gulfsands does not expect the shut-in to negatively impact 2010’s anticipated production from the Khurbet East Field.

Disclosure: The author holds no positions in the company