Gulfsands hits pay in Eugene Island

Offshore staff

(US) - Gulfsands says it has participated at a 25% working interest in another exploration discovery in Eugene Island block 58.

Following the exploration success at EI 58 announced on Dec. 14, 2005, this new exploration well has been drilled to a total measured depth of 13,914 ft.

Electric logs acquired during drilling operations indicate the presence of hydrocarbons within multiple zones, with approximately 188 ft of potential net pay.

Production casing has been set and completion operations have begun. A test of the lowermost productive interval in the well produced natural gas at a rate of 4.5 MMcf/d and 24 b/d of condensate.

First production from this well is scheduled to begin in April 2006. The net cost to Gulfsands for the drilling, completion and facility costs to hook up this well is estimated to be approximately $2.4 million.

Gulfsands says it will also participate with a 25% working interest in two further exploration wells in the immediate area during 2006.

01/31/06