LTU-1, on the Rharb Central permit, was drilled to a depth of 1,182 metres and encountered a 12 metre gross reservoir section.
Gulfsands Petroleum (LON:GPX) said it is full steam ahead in Morocco, where it made a significant gas discovery in July.
In update with interim results, the group, which also has operations in Syria, Tunisia, Colombia and the US, said it is in discussions with the country’s oil company, ONHYM, to commercialise the LTU-1 discovery.
It said it wants to develop the well “before the end of 2014”. LTU-1, on the Rharb Central permit, was drilled to a depth of 1,182 metres and encountered a 12 metre gross reservoir section.
Gulfsands’ drilling campaign on Rharb is expected to continue in the “latter half of 2014”, with two “drill ready” prospects identified from new 3D seismic data.
Gulfsands ended the half-year in a strong financial position with US$29.3mln in the bank.
Its 2P reserve base stands at 75.8mln barrels of oil equivalent, while its “net revenue interest production” averaged 214 barrels a day during the six months to June.
Revenue for the period was up 40% to US$3.1mln, while the loss narrowed US$9.2mln as costs were cut.
Chief executive Mahdi Sajjad said: “Gulfsands has made considerable progress in 2014, particularly in Morocco where the results of the LTU-1 well in July underpinned our decision to enter Morocco in the first place as well as our decision to await the results of the high quality seismic data before recommencing drilling activity on the Rharb permit.
“We hope to complete the required development for the commencement of commercial production from this discovery by the end of the year with commercial production to follow shortly after which will represent a significant milestone for our business in Morocco and Gulfsands generally.”
The shares, up 10% in the last month, fell 3.7% in morning trade to 52p. Broker Cantor Fitzgerald values the stock at 72p.
“The company intends to complete the required development for the commencement of commercial production from this discovery by the end of the year which will represent a significant milestone for the business in Morocco,” it said in a note to clients.
“The company has also recently been awarded the very promising Moulay Bouchta licence block.
Gulfsands’ Tunisian acreage seems to have fallen down the priority list due to liquidity constraints, however given the prospectivity of the onshore Chorbane Block, we do see longer term value in these assets subject to capital availability.”