Gulfsands Petroleum plc provides the following information on a claim made in the courts in Syria.

Claim by Al Mashrek Group in Syria

Al Mashrek Global Investment Ltd (“Al Mashrek”) has filed a claim with the Courts in Damascus, Syria, against Gulfsands Petroleum Levant Limited (incorporated in Cayman Islands) (“GPLL”) and the Syrian registered branch of GPLL on the grounds that Al Mashrek was not properly notified of the Open Offer completed in January 2016 and hence lost the opportunity to subscribe for new shares in the Open Offer and as a result Al Mashrek’s equity was subsequently diluted.

The Court of Appeal of Damascus has issued an order of provisional attachment on GPLL’s moveable and immovable assets, including GPLL’s share of Block 26, to secure Al Mashrek’s claim of an amount of Syrian pounds equivalent to US$2 million.

While Gulfsands continues to investigate the alleged claim it is determined to protect it’s rights in Syria and will update the market as more information becomes available.

Background: Al Mashrek, Rami Makhlouf and EU Sanctions

Al Mashrek, a company owned beneficially by Mr Rami Makhlouf and corporate entities in which Mr Makhlouf and other members of his family are involved (“Makhlouf Interests”), subscribed for shares in the Company in 2007. Prior to the Open Offer in January 2016, these shares represented approximately 5.94% of the issued shares in the Company, and following completion of the Open Offer in January 2016 these shares now represent approximately 1.48% of the issued shares of the Company.

Since the time of its first entry into Syria in 2000, the Group has had several commercial relationships with various Makhlouf Interests. All such relationships have been conducted on arms-length commercial terms, have been properly documented and have been disclosed as required by relevant laws and regulations, including the AIM Rules for Companies. Following the imposition by the UK in May 2011 of sanctions against certain individuals and organisations in Syria, including Al Mashrek, Mr. Rami Makhlouf and members of his family, the Group has suspended all payments to the Makhlouf Interests under the commercial agreements noted below, and has suspended some of the rights pertaining to the shares in Gulfsands held by Al Mashrek.

Alastair Beardsall, Chairman, said:
"The Board of Gulfsands Petroleum recognises the importance of the Company's interest in Block 26, located in Syria, and will vigorously defend this action in the appropriate cour