Gulfsands completes acquisition of stake in Chorbane oil field in Tunisia

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Gulfsands completes acquisition of stake in Chorbane oil field in Tunisia

Gulfsands Petroleum plc, the oil and gas production, exploration and development company has completed the acquisition of minority interests in the Chorbane permit (Tunisia) from ADX Energy Limited.

The Tunisian Authorities have approved the transfer of all of ADX Energy Limited's remaining interests in the Chorbane permit, onshore Tunisia to a wholly owned subsidiary of Gulfsands. Gulfsands is operator of the Chorbane permit and legal owner of a 100% interest in the permit.

The Chorbane permit covers an area of 1,940 km² in central Tunisia near the port city of Sfax and is principally an onshore permit. The permit is surrounded by several producing oil fields and extensive oil and gas infrastructure. Gulfsands is proposing to undertake a 2D seismic programme of approximately 100 km on the permit to assist in the selection of drilling locations that have been provisionally identified from Gulfsands re-interpretation of a significant data base of legacy 2D seismic data.

Gulfsands commented in a press release:

Gulfsands is aware of recent ADX news releases announcing the approval of this transfer in which ADX has made unwarranted and unfounded allegations against the Company in relation to a dispute with ADX over ADX's performance of obligations arising under an Agreement reached between the parties in December 2013 and referred to in the Company's announcement of 23rd December, 2013. The nature and circumstances giving rise to the dispute are well known to ADX and as a consequence Gulfsands has legal claims against ADX that significantly exceed the sum of US$1.5 million payable by Gulfsands pursuant to that Agreement. Gulfsands is entitled to set off against the amount of its claims against ADX, the sum payable by Gulfsands and has notified ADX that it intends to do.

As the dispute is in the hands of the parties' lawyers and has been for some time, the Company has been advised that it would be inappropriate to comment further as this time. The Company will provide further updates on this matter as and when appropriate.

The Tunisian Republic is located in the northernmost part of Africa bordering the Mediterranean Sea between Algeria and Libya. According to U.S. Energy Information Administration, Tunisia is a relatively small hydrocarbon producer. Oil production has been steadily declining from its peak of 120,000 barrels per day (bbl/d) in the mid-1980s to 67,000 bbl/d in 2012. Tunisia produced 68 billion cubic feet of dry natural gas in 2011.

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