The company is the operator and holds a 50% working interest in the Block 26 Production Sharing Contract (PSC).
Block 26 is located in North East Syria, an area it says is relatively stable though due to European Union sanctions it is not currently involved in the operations.
Production in Block 26, without its participation, has reportedly increased to approximately 15-20,000 barrels per day through January – April 2017, though none of this revenue accrues to Gulfsands.
The company added that while the status of this production under the terms of the PSC is unclear at this time, the production does appear to demonstrate the reservoir quality and that the field continues to be operable.
Gulfsands’ working interest in Syria is 2C Contingent Resources of 86.4 mmboe (reclassified from 2P reserves in 2015 due to EU sanctions) and it is ready to resume work there once sanctions are lifted.
Elsewhere, Gulfsands has initiated its pull out of Tunisia, while work has re-started on the Llanos 50 licence in Colombia where a licence extension has just been granted and on the Consulta Previa on the Putumayo 14 licence, also in Colombia.
John Bell, managing director said:”We continue to focus on capital efficiency while protecting and preserving the value within Block 26, our core assets in North East Syria, by ensuring readiness to recommence operations there once EU Sanctions and the security situation permit.
“We have also continued to make strong progress during the year managing our non-core assets elsewhere, while cutting our operating expenses by 43%. We remain focused on controlling our costs going forward and will look to reduce these further over the coming year.
There was a loss in 2016 of US$19.8mln, including impairments of $8.1mln, of which US$5.3mln related to Chorbane in Tunisia, US$1.1mln to Llanos 50 and US$1.1mln to Putumayo 14.
“We continue to enjoy the support of our three major shareholders, without whose support, the Company would be seriously financially challenged,” Bell added.
“We intend to further rationalise the non-core portfolio through farm-out or divestment, and where this is not possible we will exit countries as efficiently as possible,” he added.