Contractors Unlimited

Gulfsands: Confirmation Of Preliminary Approach Offer Price

Following the announcement on 19 March 2010, the board of directors (the "Board") of Gulfsands Petroleum plc (AIM: GPX and "Gulfsands" or "the Company") clarifies that the preliminary approach received on 18 March regarding a possible offer for the Company was at 315 pence per share for the entire issued and to be issued share capital of Gulfsands.

As stated on 19 March 2010, the Board is unanimously of the view that the proposal is wholly inadequate, highly conditional and materially undervalues the Company.

In accordance with Note 7 on Rule 2.4 of the City Code on Takeovers and Mergers, Gulfsands confirms that this announcement has not been made with the agreement or approval of the potential offeror. There can be no certainty that an offer will be made nor as to the terms on which any offer might be made.

Posted 23/03/2010

Gulfsands Petroleum Plc is an independent oil and gas exploration and production company, incorporated in the United Kingdom, whose shares are traded on the Alternative Investment Market ("AIM") of the London Stock Exchange (symbol: GPX). The Group's major focus is on the Middle East, where it has oil exploration and development projects in the Syrian Arab Republic and upstream and midstream oil and gas business development activities in Iraq. Gulfsands also produces oil and gas from a portfolio of properties in the USA, offshore Gulf of Mexico.


Gulfsands owns a 50% working interest and is operator of Block 26 in North East Syria. The Khurbet East oil field was discovered in June 2007 and commenced commercial production within 13 months of the discovery. This field is producing at an average gross production rate of approximately 17,000 barrels of oil per day through an early production facility. Block 26 covers approximately 8,250 square kilometres and encompasses existing fields which currently produce over 100,000 barrels of oil per day, and are operated mainly by the Syrian Petroleum Company. The current exploration license expires in August 2010 and is extendable for a further two years. Gulfsands' working interest 2P reserves in Syria at 31 December 2008 were 35.2 mmbbls.


Gulfsands signed a Memorandum of Understanding in January 2005 with the Ministry of Oil in Iraq for the Maysan Gas Project in Southern Iraq, following completion of a feasibility study on the project, and is negotiating details of a definitive contract for this regionally important development. The project will gather, process and transmit natural gas that is currently a waste by-product of oil production and as a result of the present practice of gas flaring, contributes to significant environmental damage in the region. The Company is actively engaged in discussions with respect to financing and potential equity partners. Gulfsands has no reserves in Iraq.

Gulf of Mexico, USA:

The Company owns interests in 44 blocks comprising approximately 138,000 gross acres offshore Texas and Louisiana, which include 30 producing oil and gas fields with proved and probable working interest reserves at 31 December 2008 of 5.1 mmboe.

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