Reserves and Resources

Reserves and Resources

Up until 2015, hydrocarbons related to the known discoveries of Khurbet East and Yousefieh were classified as Reserves.  During 2015 these Reserves were reclassified to Contingent Resources as a result of the continuing EU/UK Sanctions in Syria. In such a circumstance the SPE PRMS Guidelines suggest that if the (re)commencement of development cannot be guaranteed to be within five years from the date of evaluation then the volumes of hydrocarbons should be classified as Contingent Resources rather than Reserves. The Company therefore concluded in December 2015 that the uncertainty in any timeline over which EU/UK Sanctions in Syria may be lifted required that the volumes of oil, gas and condensate previously reported as Syrian Reserves be reclassified by the Company as Contingent Resources. Since 2015 this classification as Contingent Resources has continued. During 2026, in parallel to resuming Block 26 development and production, it is expected that a new CPR will be completed which is expected to confirm that the majority of the Contingent Resources are to be reclassified as 2P Reserves.

Over recent years, the Gulfsands team has undertaken significant internal technical work to review estimated resources as part of the preparation for its return to Syria. During 2019, and again in 2023, Independent consultants Oilfield Production Consultants (“OPC”) were commissioned to review, audit and validate this work, and prepare a Competent Persons Report (“CPR”). This exercise included a comprehensive review of the Block 26 interests (Contingent Resources and Prospective Resources) in accordance with the definitions and guidelines set forth in the 2018 Petroleum Resources Management System (“PRMS”) approved by the Society of Petroleum Engineers (“SPE”).  

In estimating the Resources, it has been assumed that the period of time elapsed during which the Group has declared Force Majeure on its Block 26 development and production activities, will ultimately be added as an equivalent time period extension to the contractually specified Exploration Period and Production Concession Periods, as is anticipated by the PSC.  Discussions are underway with SPC to confirm the precise additional time that will be added. 

Contingent Resources

The Group’s Contingent Resources in the 2023 CPR, were reconfirmed by OPC as of 1 January 2025, and during 2025, the Company internally updated the economic model taking into account the production that has occurred during 2025, and other items. The 2C Contingent Resources in Khurbet East (Massive, Butmah and Kurrachine Dolomite), Yousefieh (Massive) and Al Khairat (Massive) fields as at 1 January 2026 were evaluated to be 105.7 million boe (net to Gulfsands), a 2.0% decrease in 2C Contingent resources compared to 108.0 million boe in the 2024 Annual Report, as follows:

Please note, certain figures may not add up due to rounding.

Gas is converted to mmboe at the conversion factor 1 bcf = 0.1667 mmboe

Prospective Resources

OPC also reviewed the portfolio of nine identified prospects within Block 26 as of 1 January 2025, and validated them as Prospects under PRMS definitions and also estimated associated Prospective Resources, on a risked and un-risked, pre-royalty basis, summarised below.

Prospective Resources (Unrisked)

OPC also reviewed the portfolio of nine identified prospects within Block 26 as of 1 January 2026, and validated them as Prospects under PRMS definitions and also estimated associated Prospective Resources, on a risked and un-risked, pre-royalty basis, summarised below. 

Prospective Resources (Risked)

The following table is a summary of OPC’s estimate of the oil and gas Prospective Resources (Risked) attributable to Block 26 as of 1 January 2026. The figures are based on Gulfsands net 50% working interest ownership: