Gulfsands Receives Approval to Develop Yousefieh Oil Field

LONDON, January 26 - Gulfsands Petroleum plc ("Gulfsands", the "Group" or the
"Company" - AIM: GPX), the oil and gas production, exploration and
development company with activities in Syria, Iraq, and the U.S.A., is
pleased to provide the following update on the Company's operations at Block
26, Syria where Gulfsands holds a 50% interest and acts as operator.

Application to Develop the Yousefieh Oil Field Granted by
Syrian Authorities

Discovery of oil at Yousefieh-1, located approximately 3
kilometres east of the Khurbet East Field, was made in November 2008, with
two subsequent appraisal wells being drilled in 2009.

Gulfsands has now received confirmation from Syria's General
Petroleum Corporation that Gulfsands Petroleum Syria Limited has been granted
permission to develop the Yousefieh Oil Field accumulation in Block 26 North
East Syria. A production license of 25 years duration has been granted, with
the possibility of an extension if required, for a further 10 years.

The Yousefieh Field was assessed at the end of 2008 as
containing gross proved plus probable reserves of 11 million barrels of oil.
A further update on Yousefieh Field estimated gross reserves will be provided
at the beginning of the second quarter 2010.

First oil from Yousefieh is anticipated early in April 2010.
Production will commence from 2 wells, Yousefieh-1 and Yousefieh-3, at an
expected initial combined rate of up to 1000 barrels of oil per day ("bopd").

Production from the wells will be closely monitored to assess
flow performance and to determine whether the Yousefieh reservoir benefits
from the same strong aquifer pressure support as is observed in the nearby
Khurbet East Field. The current expectation is that the Yousefieh field has
lower reservoir energy than Khurbet East and planning is underway to install
permanent down-hole artificial lift equipment in both Yousefieh wells later
in the year. In addition, a further development well on Yousefieh is planned
for 2010.

It is anticipated that production from the Yousefieh Field
will reach a rate of approximately 6000 barrels of oil per day by 2012.

Ric Malcolm, Gulfsands CEO, said

"We are delighted to have received the Syrian Government's
early confirmation of development approval for the Yousefieh field and now
look forward to commencing production as soon as practicable. The early
production data obtained will provide valuable information that will assist
us in optimizing the development of the field."

This release has been approved by Richard Malcolm, Chief Executive of
Gulfsands Petroleum Plc, who has a Bachelor of Science degree in Geology with
30 years of experience in petroleum exploration and management. Mr. Malcolm
has consented to the inclusion of the technical information in this release
in the form and context in which it appears.

ABOUT GULFSANDS:

Gulfsands is listed on the AIM market of the London Stock Exchange.

Syria

Gulfsands owns a 50% working interest and is operator of Block 26 in
North East Syria. The Khurbet East oil field was discovered in June 2007 and
commenced commercial production within 13 months of the discovery. This field
is producing at an average gross production rate of approximately 17,300
barrels of oil per day through an early production facility. Block 26 covers
approximately 8,250 square kilometres and encompasses existing fields which
currently produce over 100,000 barrels of oil per day, and are operated
mainly by the Syrian Petroleum Company. The current exploration license
expires in August 2010 and is extendable for a further two years. Gulfsands'
working interest 2P reserves in Syria at 31 December 2008 were 35.2 mmbbls.

Iraq

Gulfsands signed a Memorandum of Understanding in January 2005 with the
Ministry of Oil in Iraq for the Maysan Gas Project in Southern Iraq,
following completion of a feasibility study on the project, and is
negotiating details of a definitive contract for this regionally important
development. The project will gather, process and transmit natural gas that
is currently a waste by-product of oil production and as a result of the
present practice of gas flaring, contributes to significant environmental
damage in the region. The Company is actively engaged in discussions with
respect to financing and potential equity partners. Gulfsands has no reserves
in Iraq.

Gulf of Mexico, USA

The Company owns interests in 44 blocks comprising approximately 138,000
gross acres offshore Texas and Louisiana, which include 30 producing oil and
gas fields with proved and probable working interest reserves at 31 December
2008 of 5.1 mmboe.

Certain statements included herein constitute "forward-looking
statements" within the meaning of applicable securities legislation. These
forward-looking statements are based on certain assumptions made by Gulfsands
and as such are not a guarantee of future performance. Actual results could
differ materially from those expressed or implied in such forward-looking
statements due to factors such as general economic and market conditions,
increased costs of production or a decline in oil and gas prices. Gulfsands
is under no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise, except as
required by applicable laws.

More information can be found on the Company's website
www.gulfsands.com

Gulfsands Petroleum (London): Richard Malcolm, Chief Executive Officer, +44(0)20-7434-6060; Richard Malcolm, Chief Executive Officer, Kenneth Judge, Director of Corporate Development & Communications, +44(0)7733-001-002 ; Buchanan Communications Limited (London): Bobby Morse, Ben Romney, +44(0)20-7466-5000; RBC Capital Markets (London): Josh Critchley , Matthew Coakes, Brett Jacobs, Martin Eales, +44(0)20-7653-4000