Gulfsands Petroleum PLC
21 May 2019
21 May 2019
GULFSANDS PETROLEUM PLC
ANNUAL REPORT FOR YEAR ENDED 31 DECEMBER 2018 AND AGM
Gulfsands Petroleum plc ("Gulfsands" or the "Company", the
"Group"), the oil and gas company focused on the Middle East
region, is pleased to announce the release of its Annual Report and
Accounts for the year-ended 31 December 2018.
The Annual Report and Accounts will be available on the
Company's website and paper copies, together with notice of the
Annual General Meeting ("AGM"), will be mailed to all shareholders
shortly. The AGM is scheduled for 11am on Thursday 27 June at the
Company's registered office at Shakespeare Martineau, 60
Gracechurch St, London EC3V 0HR.
Highlights of the year, and the subsequent period to date, are
as follows:
Increased focus on core assets in North East Syria which,
according to in-country sources, appear to be in good order,
materially undamaged and operationally fit
-- Group working interest 2C Contingent Resources in Syrian
assets of 77.4 mmboe (reclassified from 2P reserves in 2015 due to
EU sanctions).
-- Over 20-year resource life.
-- Involvement in Syrian operations remains suspended during
continuation of EU sanctions, with which Gulfsands remains
committed to full compliance.
-- Production in Block 26, without the participation of
Gulfsands, has reportedly been approximately 20,000 boepd
throughout 2018 - no revenues have been recognised or received by
Gulfsands.
-- While the status of this production under the terms of the
PSC is unclear at this time, the production does appear to
demonstrate the reservoir quality and that the fields continue to
be operable.
-- The area surrounding Block 26 remains stable, with no major disruptions during the year.
Re-entry planning stepped up as political situation appears to
be improving
-- After eight years of devastating war, and as the conflict
enters its ninth year, the focus of the international community
appears to be moving towards one of normalisation and
reconstruction.
-- Gulfsands has spent a significant amount of time during 2018
formalising and analysing existing data, to ensure that the assets
are fully understood, such that the Group is in a position to
initiate re-entry and to recommence operations as soon as it is
permitted to do so.
-- This work continues to provide strong affirmation of the
world class technical nature of Block 26, both in respect of the
existing discoveries, and also the significant exploration upside
potential that remains within the block.
-- The Board believes that Block 26 could contain over a billion
barrels of recoverable resource, with the potential for production
levels of around 50,000 boepd from existing discoveries and over
100,000 boepd from a full block development.
-- In addition, the technical team that has been assembled has
begun supporting business development activities in the broader
Middle East region, which will remain a focus during 2019.
Rationalisation of non-core assets almost complete
-- There are no active operations remaining in Tunisia and
Morocco and the administrative closedown continues.
-- The Creditors Voluntary Liquidation ("CVL") of the Cyprus
subsidiary, Gulfsands Petroleum Morocco Limited ("GPML"), through
the Cypriot courts was approved and concluded at the final
creditors meeting on 8 May 2019.
-- In Colombia, significant progress has been made:
o The Putumayo-14 licence was successfully divested and
transferred in its entirety to the Amerisur Resources plc Group
("Amerisur"), alleviating a minimum work program obligation of
$16.1 million.
o The Llanos-50 licence remains in suspension following
identification of environmental restrictions on the block. These
concerns have been confirmed by Corporinoquia, the local
environmental agency, who have declared the planned seismic
programme non-viable. The Company is in dialogue with the ANH to
mutually terminate the LLA-50 licence.
Increased focus on business development
-- With much of the streamlining of the business complete,
management has increased its focus on business development in the
broader Middle East region.
Capital efficiency and continued financial support from major
shareholders
-- The Group was funded throughout 2018 by the 2017 Secured Term
Financing Facility provided by the Major Shareholders. This 2017
Facility was extended in March 2018, giving a further GBP4 million
of committed capacity which is expected to fund G&A through to
early 2020.
-- Continued initiatives to reduce the ongoing expenses across
the Group with gross office costs after partner recoveries falling
a further 10% from $3.2 million to $2.9 million during the year
-- Budgeted G&A cost for 2019 is around $2.5 million.
-- At the date of this Report, the Group had unaudited free cash
available for operations of $1.6 million.
Delisting from AIM
-- The Company delisted from the Alternative Investment Market
("AIM") of the London Stock Exchange on 23 April 2018, following
shareholder approval at the General Meeting held on 10 April
2018.
-- The Company's shares continue to trade through the secondary
trading auction facility provided by Asset Match
(www.assetmatch.com).
John Bell, Managing Director said:
"We are closing in on completion of the consolidation of
regional focus that we were asked to undertake by the major
shareholders when we took over the executive function of the
company in mid-2016. We are now well positioned to focus on our
world class assets in Syria. After eight years of devastating war,
and as the conflict enters its ninth year, the focus appears to be
shifting to a normalisation process and reconstruction. Gulfsands
looks forward to participating in that reconstruction process with
our Block 26 assets as soon as sanctions allow".
For further information, please refer to the Company's website
at www.gulfsands.com or contact:
Gulfsands Petroleum Plc +44 (0)20 7841 2727
John Bell, Managing Director
Andrew Morris, Finance Director
James Ede-Golightly, Non-Executive Chairman
Camarco +44 (0)20 3757 4983
Billy Clegg / Owen Roberts
Certain statements included herein constitute "forward-looking
statements" concerning the Company within the meaning of applicable
securities legislation. These forward-looking statements are based
on certain assumptions made by Gulfsands and as such are not a
guarantee of future performance. These forward-looking statements
involve risks and uncertainties that could cause actual results to
differ materially from those expressed or implied in such
forward-looking statements. Many of these risks and uncertainties
relate to factors that are beyond Gulfsands' ability to control or
estimate precisely, such as general economic and market conditions
in various countries and regions, political risks, environmental
and physical risks, legislative, fiscal and regulatory
developments, drilling and production results, reserves estimates,
changes in demand for Gulfsands' products, increased costs of
production or price fluctuations in crude oil and natural gas.
Gulfsands cannot give any assurance that such forward-looking
statements will prove to be correct. Gulfsands does not undertake
any obligation to update or revise publicly any forward-looking
statements set out herein, whether as a result of new information,
future events or otherwise, except as required by applicable
laws.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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May 21, 2019 02:02 ET (06:02 GMT)