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Emerald Provides Syria Operations Update

Source: www.gulfoilandgas.com 7/24/2006, Location: Middle East

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Gulfsands Petroleum plc, the operator for Block 26 in Syria, announced certain information some of which relates to Block 26 and Emerald Energy Plc would like to provide that Ryder Scott Company, L.P. has completed an economic valuation of the Probable and Possible reserves (unrisked) on the Tigris structure in Block 26, Syria.

On 30 January 2006 Ryder Scott completed a reserves study on the Tigris structure in which two cases were considered as there was insufficient data available at that time to determine with certainty the hydrocarbon fluid contained within the Tigris structure. This reserves study classified Probable and Possible Reserves and Prospective Resource as follows:

  • If Tigris is a natural gas accumulation, Ryder Scott has classified 442 billion cubic feet (bcf) of gas as Probable Reserves, a further 442 bcf of gas as Possible Reserves, and a further 3447 bcf of gas as a Prospective Resource. In summary, total estimated hydrocarbon potential for Probable and Possible Reserves and Prospective Resource in this case is 4330 bcf of gas, equivalent to 722 million barrels of oil equivalent.

  • If Tigris is an oil accumulation, Ryder Scott has classified 104 million barrels (mmbbz) of oil and 64 bcf of gas as Possible Reserves and a further 408 mmbbl of oil and 245 bcf of gas as Prospective Resource. In summary, total estimated hydrocarbon potential for Possible Reserve and Prospective Resource in this case is 512 mmbbl of oil and 308 bcf of gas, equivalent to 563 mmboe.

    Based upon their estimate of reserves, Ryder Scott has now completed an economic evaluation, as of 1 July 2006

  • If Tigris is a natural gas accumulation, Ryder Scott determined the Probable Reserves net to Emerald after applying the fiscal terms of the Production Sharing Contract are 102 bcf of gas having a net present value, discounted at 10%, of $233 million. An additional 75 bcf of gas of Possible Reserves net to Emerald having a net present value, discounted at 10%, of $261 million. In summary total estimated Probable and Possible Reserves for the natural gas case is 177 bcf of gas (30 mmboe) with a net present value of $494 million.

  • If Tigris is an oil accumulation, Ryder Scott determined the Possible Reserves net to Emerald after applying the terms of the Production Sharing Contract is 19.4 mmbbl of oil having a net present value, discounted at 10%, of $452 million.

    Natural gas pricing used in the evaluation was based upon June 2006 gas prices and the pricing formula within the Block 26 Production Sharing Agreement. Oil pricing was based upon the average price for Syrian light crude oil for the month of June 2006. Natural gas prices were fixed at $7.24 per million cubic feet and oil prices fixed at $66.69 per barrel for the life of the project.

    Drilling of the Tigris #1 well is expected to commence by September of 2006.

    Alastair Beardsall, Emerald_s Chairman, said: The Ryder Scott valuation demonstrates the viability of the Tigris prospect if the reserves are proved up with the forthcoming drilling program. The potential reserves, and their economic value, to Emerald outweigh the geological and drilling risks, we look forward to spudding the Tigris well.

    Emerald holds a 50% interest in Block 26 in its 100% subsidiary SNG Overseas Ltd.

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