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UPDATE – Gulfsands Petroleum resumes drilling in Morocco

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The Lalla Yetou Updip-1 gas exploration well, which selected using seismic data acquired last year, has a target depth of 1,180 metres.

UPDATE – Gulfsands Petroleum resumes drilling in Morocco

By Philip Whiterow

June 20 2014, 11:46am
The Lalla Yetou Updip-1 gas exploration well, which selected using seismic data acquired last year, has a target depth of 1,180 metres.
The Lalla Yetou Updip-1 gas exploration well, which selected using seismic data acquired last year, has a target depth of 1,180 metres.

— ADDS BROKER COMMENT–

Gulfsands Petroleum(LON:GPX) has restarted drilling on the Rharb Centre permit in northern Morocco.

The Lalla Yetou Updip-1 gas exploration well, which was selected using 3D seismic data acquired last year, has a target depth of 1,180 metres.

LTU-1 is located up dip structurally from a previous well Lalla Yetou-3 that found gas bearing sands. Drilling will take about 28 days.

Mahdi Sajjad, Gulfsands’ chief executive, said: “We are very pleased that the company has re-commenced drilling operations in Morocco and we look forward to seeing the results of this next well.”

LTU-1 will be Gulfsands’ fourth well on the Rharb Centre permit. The previous three failed to flow commercial gas, but with the benefit of the new seismic data the company hopes it now has a much better picture of where the gas pockets lie.

Rharb is close to existing gas pipelines and any producing wells can be tied into the local infrastructure.

Broker Cantor Fitzgerald believes there is there is “considerable” near-term value contained within the proven conventional and shallow gas play in the Rharb permit with plenty of exploration potential in the nearby Rharb Sud, Fes and Taounate permits.

The competent person’s report revealed 2P reserves of 0.6bn cubic feet (Bcf) and 2C contingent resources of 1.4Bcf and Cantor sees first gas this year at a rate of 0.3MMcf/d, ramping up to 7MMcf/d in 2015.

“The Rharb permit therefore offers Gulfsands access to imminent cash flow generation (US $8.5/mcf) through inexpensive drilling and development capex (US$1.5m well cost),” it adds.

There is also demand for natural gas from local industry that Rharb could supply through an existing network of gas pipelines.

Buy with a target price of 72p, concludes Cantor. Shares rose to 50.6p today.

 

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Gulfsands Petroleum Plc is an independent oil and gas exploration and production company, whose shares are traded on the London Stock Exchange (symbol: AIM:GPX). The Group’s major focus is on the Middle East and North Africa where it has oil exploration, production and development projects in the Syrian Arab Republic (activities…

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