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The well was the first to be drilled following the group's interpretation of seismic in the recently completed Rharb 3D seismic programme.
The well flowed at an estimated rate of 6.6mln cubic feet per day without producing formation water, the company told investors.
It is now being monitored for pressure build-up and thereafter will be temporarily suspended as a future gas producer.
LTU-1 was drilled to a depth of 1,182 metres and encountered a 12 metre gross reservoir section.
Gulfsands said the main reservoir appears consistent with pre-drill expectations of a turbidite distributary channel/fan complex, and the gas-to-water contact is also as anticipated.
"We are very pleased with the successful results achieved in the LTU-1 well,” said chief executive Mahdi Sajjad.
He added the firm hopes it will provide a firm foundation for further drilling successes on the permit.
Shares rose 12.37% to 54.50p.