The oil and gas properties being divested represented about 1.1 million barrels of oil equivalent (boe) of proven and probable working interest reserves as at 31 December 2010.
The properties contributed about 322 barrel of oil equivalent production per day of working interest production during the last week of September.
In addition to the immediate cash consideration, the sale removes the significant forward liability provision related to asset retirement (plugging and abandonment of wells, decommissioning of facilities), the company said.
The cash that is currently held in escrow as collateral for bonds securing this asset retirement will also now be released back to Gulfsands Petroleum.
Including the release of this escrow cash, the sale of the properties will generate about $10.2m in cash proceeds.
According to the company, pro forma proved and probable working interest reserves remaining after this sale, as at 31 December 2010, are 2.1 million boe.
This is the second sale of Gulf of Mexico assets completed by the company since the beginning of the year, generating about $20m in total cash receipts.
