Gulfsands Falls on Annual Results

Shares in Gulfsands Petroleum, the oil and gas production, exploration and development company with activities in Iraq, were down nearly 10% in early trading before recovering to close down 4.9%, following the announcement of its annual results for the twelve months ended 31 December 2011.

HIGHLIGHTS

Financial

· Profit after tax up by 23% to $55.1 million (2010: $44.7 million)

· Cash from operating activities up by 34% to $94.3 million (2010: $70.2 million)

· Further part-disposal of US business realising aggregate cash of $11.0 million

· Free cash balances at year-end of $124.2 million (2010: $80.6 million)

Operations

  • Group working interest production down by 17% to 8,542 boepd (2010: 10,308 boepd)
  • Group 2P working interest reserves up by 34% to 76.3 mmboe (2010: 56.9 mmboe) of which 74.5 mmboe (2010: 53.6 mmboe) relates to its PSC in Syria
  • Group 2C risked contingent resources of 13.0 mmboe
  • Six exploration wells drilled in Block 26, Syria resulting in three discoveries
  • Potentially commercial onshore oil discovery in Tunisia

2012 Objectives

  • Maintain presence in Syria
  • Consolidate position in Tunisia
  • Build another viable non-Syrian business

As a consequence of the sanctions imposed on Syria by the EU, the Group declared force majeure in December 2011 on its PSC in Syria. This has had a significant impact on the financial statements.

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