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Gulfsands Petroleum and ADX move on to primary target in Lambouka-1

As it is drilling down to Lambouka-1’s primary target, Gulfsands Petroleum’s (LON: GPX) joint venture partner ADX Energy Ltd (ASX:ADX) has intersected the complete Ain Grab section. In this secondary target, ADX encountered porous reservoir sandstone, as expected, which was determined to be water-bearing following the interpretation of drilling logs.

ADX Energy operates the Kerkouane Exploration Licence offshore Tunisia, which hosts the Lambouka prospect, and the adjacent Pantelleria exploration permit in Southern Italy. Gulfsands is earning into a 30% participating interest in both Kerkouane and Pantelleria.

Earlier this week, ADX reported that the Tertiary aged Birsa Sand - the first reservoir target for the Lambouka prospect - was also water bearing.

Drilling beyond the Birsa and Ain Grab targets, at respective depths of 1,780m and 2,216m, ADX will now move on to Lambouka-1’s primary target, the Abiod carbonate formation.

Whilst investors in Australia saw ADX fall by around 16% on the Australian Securities Exchange, in London investors seem to have their eyes set firmly on the primary Aboid carbonate target. Despite this second watery target in one week, Gulfsands share only fell marginally this morning, down just 1.2% in late morning deals.

Earlier this week, following the disappointment of the Birsa result, London-based stockbroker Arbuthnot Securities remained upbeat on the company’s prospects. According to Arbuthnot, Gulfsands still has “considerable upside from the current share price”, even if the Lambouka-1 exploration well, offshore Tunisia, comes up dry.

Gulfsands also expects to participate in the drilling of another exploration well in Tunisia, before the end of 2010, on the onshore Chorbane permit where it is earning into a 40% interest.