31st Jul 2014 10:23
LONDON (Alliance News) - Global Energy Development PLC Thursday said a blockage is causing it to only be able to achieve low fluid recovery after fracking at its Catalina #1 Simiti formation in the northern section of the Magdalena Valley in Colombia.
The Catalina 1 well was fracked earlier this year using 27,000 barrels of water pumped into the Simiti formation at the site but only 6,750 barrels of the injected fluid has been recovered since then, with its productivity rate as low as 75 barrels of fluid per day to 125 barrels per day.
Global Energy Development was trading 17% lower at 56.99 pence, putting it amongst the top three AIM All-Share fallers on Thursday.
Hydraulic fracturing, often called 'fracking,' involves fracturing rock via a pressurised liquid to release oil or natural gas. The fluid is then pumped back out of the well along with the gas or oil.
The company carried out a range of tests and believes that the reason it is struggling to recover the fluids is a blockage somewhere along the well. It said the use of sand in the stimulation process is likely to have collected at the oil-water interface and acted as the agent to create the blockage.
Global Energy said it is currently working to remove the blockage by inducing pressure surges within the formation to form a corridor to allow oil to pass through the blockage and hopefully lead to the break up of the block itself.
The company said that if the process fails, it will consider other techniques to remove the blockage, including a work over of the well for chemical removal.
"The company remains very optimistic that oil exists within the Simiti reservoir and can be produced at economic rates," Managing Director Steve Voss said in a statement.
"We will continue to apply the two methods discussed to remove the emulsion blockage which is currently preventing higher production rates, and we hope to have an update on our progress on this activity in August We have learned valuable information from this test well that will benefit the remainder of our development project at Bolivar," Voss added.
By Tom McIvor; [email protected]; @TomMcIvor1
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