Debt-free Gulfsands Petroleum maintains interest in Syria

Oil and gas explorer Gulfsands Petroleum said it was debt free at the half-year stage, as it maintained its interest in Syria and continued to streamline its operations in a bid to reduce its rate of 'cash-burn'.

On 14 January the company was admitted to AIM and over 354m shares were sold, raising £14.2m or $20.4m. The funds raised were used to repay the $14.5m debt outstanding under its convertible loan facility and the company said it is now debt free.

For the six months ended 30 June, the company reported a pre-tax loss of $4.8m, down from $31.1m compared to the same period last year.

The company said its assets in Syria were part of its core strategy and it was monitoring the situation in the region closely with a view to returning as soon as was practicable once sanctions had been lifted .

Gulfsands is the operator of the Block 26 production sharing contract and holds a 50% working interest in the contract along with Sinochem Group. Gulfsands is not involved in any activities on Block 26 as 'force majeure' has been declared following EU sanctions on Syria. The company said it remains compliant with all sanctions and intends to return to production as soon as it is allowed under EU law.

The company also said it continues to pursue farm-out agreements or divestment of its non-Syrian assets in Morocco, Tunisia and Colombia.

Gulfsands said: “The group remains committed to maintaining its presence in Syria, and it considers its partnership with General Petroleum Corporation as a key element for the safe stewardship of Block 26 while the various sanctions prevent Gulfsands from a more active role. In Morocco, the company seeks to build on its good relationship with Office National des Hydrocarbures et des Mines to resolve the remaining issues regarding the Rharb and Fes contracts and progress, ideally with a partner, the work program for Moulay Bouchta.

“In Colombia, where the company is in active engagement with Agencia Nacional De Hidrocarburos and potential industry partners, and in Tunisia, we will continue to try and find a practical way forward for all our contracts while managing the exposure for the group to an acceptable level.

“With financing secured to cover operational costs into 2017 the management team remains focused on continuing the realignment of the company into one that has a sustainable business model where liabilities and obligations meet the risk appetite of our shareholders.”

Total unrestricted cash and cash equivalents rose to $1.8m, an increase of $1.4m.