Gulfsands Petroleum (GPX) has expanded its footprint in frontier energy markets by adding new acreage in Colombia - the one-time 'narco-state' that contains some of the globe's most promising unrisked oil & gas prospects. Gulfsands has secured two exploration and production agreements - Llanos Area 50 and Putumayo Area 14 - located in the Llanos and Caguan Putumayo basins.
These agreements follow on from preliminary awards made by Colombia's Agencia Nacional de Hidrocarburos for licence areas in the Llanos and Caguan Putumayo Basins. A consortium is now being put together to develop the exploration projects, with work expected to start within the next 12 months, including planned 2D seismic surveys. There is obviously no defined cost analysis at this stage, but management states that "the successful applications involved attractive financial terms and modest minimum exploration work obligations over the initial four-year exploration terms".
The Colombian deal, along with recently acquired projects in Morocco and Tunisia, have been undertaken to diversify Gulfsands' production away from its principal asset, Block 26 PSC in Syria. Valuations for Gulfsands headed south after the company was forced to declare force majeure on its Syrian assets in December 2011 - suffice to say, the security situation in the country remains dire. Gulfsands is fully funded in its activities in Morocco and Tunisia through to 2015, with the prospect of gas production (and consequent revenues) from the Rharb permit in Morocco during the second half of this year.
