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Sun 30 Aug 2009 08:18 PM

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UK's Gulfsands in talks with China's Sinochem - report

State-owned Sinochem said readying $650m offer for operator of Syria's Khurbet field.

UK-based and London listed Gulfsands Petroleum is in discussions with China’s state-owned Sinochem about a possible takeover.The UK’s Mail On Sunday, citing a source close to the situation, said a bid worth up to £400 million ($650million) could be tabled 'within weeks' - the offer representing a 42 percent premium to the company’s share price close on Friday of 230p.

Gulfsands has seen its share price run up from 130p since the beginning of the year as investors have warmed to company’s Syrian activities at its Khurbet East oil field.

In an operational update earlier this month the company, which also has ops in the US and Iraq, confirmed it had successfully completed expansion of the processing capacity at the Khurbet East Early Production Facility (EPF) to approximately 18,000 barrels of fluid per day.

Tie-in operations have also been concluded on the previously drilled KHE-9 and KHE-10 production wells coincident with the completion of the expansion of the EPF - the result being that gross daily production from the Khurbet East Field has risen from approximately 10,730 barrels of oil per day (bopd) back in June to approximately 14,700 bopd now.

Drilling operations on the KHE-11 horizontal well have also recently been successfully concluded - the well awaiting tie-back to the EPF.

The drilling rig has now moved on to drill well KHE-12, some 3.2 kilometres south of the previous delineation well KHE-8, which encountered a full oil column.

The company is further determining the extent of the Khurbet East field. Drilling operations on the KHE-12 well are expected to be completed within 45 days.

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