Gulfsands Petroleum seeks fast track opportunities for new non-Syria businesses
7:44 am by Jamie Ashcroft Gulfsands ceased its involvement in exploration, development and production operations in Syria Gulfsands Petroleum (LON:GPX) today said it is looking for a ‘fast track’ opportunity to build another non-Syrian based business unit.
The firm said that it intends to maintain its presence in Syria to preserve value for shareholders and protect its legal rights over the assets there.
It also plans to consolidate its interests in Tunisia.
In today’s financial results for 2011 Gulfsands revealed that the political and humanitarian crisis in Syria has overshadowed what would have otherwise been a very successful year.
In December Gulfsands declared force majeure over the Block 26 PSC as international sanctions on Syria’s oil industry tightened. Gulfsands ceased its involvement in exploration, development and production operations in the country.
As such it currently receives no revenue from its principal asset in Syria, which comprises the majority of the group’s oil reserves – with 74.5 million barrels of 2P reserves in Block 26.
Today’s results show that prior to the troubles, however, the group’s investment in Block 26 was really starting to pay off. It revealed that it generated 34 per cent more cash from its operations last year and profits were up 23 per cent at US$55.1 million.
Oil production was affected by the troubles in Syria during the year and at the government’s request output was at times intentionally constrained.
Working interest production averaged 8,542 barrels a day during the year, which represents a 17 per cent decrease from last year.
The company ended the period with US$124.2 million in the bank.
“We can but hope that the coming months will bring some respite from the present acute difficulties in Syria, most importantly for the population but also for the company and its shareholders,” said chairman Andrew West.
“In the interim, we are leaving no stone unturned in our continuing efforts to find attractive opportunities to deploy our financial and technical firepower into "fast track" geographical diversification.”
Chief executive Richard Malcolm explains that Gulfsands already has the foundations to achieve this goal with significant financial resources, highly competent human and technical resources as well as credibility in the oil industry.
He says there are numerous opportunities for Gulfsands to acquire both exploration acreage and prospective production at an attractive cost of entry.
“Several such opportunities are currently being evaluated. In all cases, the emphasis is upon cash preservation, the ability to fast-track production and the opportunity to maximise the company's operational strengths and experience,” Malcolm adds.
So 2012 promises to be an exciting year, he says, as Gulfsands applies its proven strengths to establish a stronger base from which to build future value for shareholders.
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