Gulfsands Petroleum plc, the oil and gas production, exploration and development company with activities in the U.S.A., Syria and Iraq, is pleased to provide an updated reserves study as of 31 December 2006 for Gulfsands' USA oil and gas properties.

Proved and probable reserves in the USA increased by 31% to 44.6 billion cubic feet of natural gas equivalents (BCFGE), or 7.4 million barrels of oil equivalents (MMBOE), as of 31 December 2006 compared to 34 BCFGE as of 31 December 2005. The net present value (NPV) of the proved and probable reserves as of 31 December 2006 discounted at 10% totals $197 million with 84% of the NPV in the proven reserves.

Gulfsands' reserve additions for the 2006 calendar year replaced 389% of its 2006 produced oil and gas volumes. Produced oil and gas volumes for 2006 were 3.67 BCFGE.

Gulf of Mexico Reserves

Gulfsands commissioned Netherland, Sewell & Associates Inc. to provide a reserves report for the USA offshore Gulf of Mexico oil and gas properties as of 31 December 2006. This reserve report reflected an increase in overall reserves primarily associated with extensive workover and recompletion work on many of the properties. The reserves report states that Gulfsands' Gulf of Mexico properties contain proved and probable reserves of 41.5 BCFGE, consisting of 27.3 billion cubic feet of natural gas (BCFG) and 2.36 million barrels of oil (MMBO). On an oil barrel equivalent basis this represents 6.9 MMBOE. The report further classifies an additional 2.1 BCFGE of possible recoverable reserves.

The NPV at 31 December 2006 of the proved and probable reserves discounted at an annual rate of 10% is $185 million (86% of net present value is in proven reserves). The NPV of the possible reserves was $9.8 million.

Onshore Gulf Coast Reserves

Collarini Associates completed a reserves report for the USA onshore Gulf Coast oil and gas properties of the Company at 31 December 2006. This reserve report also reflected an increase in overall reserves. The reserves report states that Gulfsands' onshore properties contain proved and probable reserves of 3.1 BCFGE, consisting of 2.8 BCFG and 57,000 barrels of oil. The report further classifies an additional 4.7 BCFGE of possible recoverable reserves, consisting of 4.6 BCFG and 24,000 barrels of oil.

The NPV of the proved and probable reserves discounted at an annual rate of 10%, is $11.8 million and the NPV of the possible reserves is $11.2 million.

Gulfsands' CEO, John Dorrier, said, "The increases in our USA reserves have exceeded our expectations with a resulting increase in their value despite lower commodity prices."