30th Mar 2006 07:02
Burren Energy PLC30 March 2006 Burren Energy Plc ("Burren") Congo Licence Developments and Group Drilling Update Burren Energy (LSE:BUR), the independent oil and gas exploration and productioncompany, is pleased to announce the following Congo Licence Developments andprovide a Group Drilling Update. 1. Congo Licence Developments The operator Maurel & Prom ("M&P") has today released an announcement inrelation to its own, and Burren's, interests in Congo, which is translated below: "On 24 March 2006 the Congolese parliament approved the terms of the La Noumbiproduction sharing contract ("PSC"). Following the signature of a participation purchase agreement on 27 June 2005between the Republic of Congo, Societe Nationale des Petroles du Congo ("SNPC"),M&P and Burren Energy Congo Ltd, which was amended by a supplemental agreementdated 18 October 2005, the partners in the Kouilou, M'Boundi and Kouakoualalicences signed the following agreements with the Republic of Congo : • Two amendments to the Kouilou PSC, both dated 21 November 2005 • A further amendment to the Kouilou PSC, applicable specifically tothe M'Boundi licence, dated 5 December 2005. • An amendment to the Kouakouala PSC dated 21 November 2005 These amendments to the Kouilou and Kouakouala PSCs, together with the La NoumbiPSC which was signed on 9 January 2004, were submitted for the approval of theparliament of the Republic of Congo in accordance with the provisions of theHydrocarbon Code. The parliament has just passed draft bills approving thesecontracts and amendments. This decision should permit the entry of SNPC into the M'Boundi developmentlicence to the extent of 10% of the respective interests of M&P and Burren.After this sale the participating interest of M&P in M'Boundi will be 48.6%.This vote concludes the re-organisation of the petroleum rights of M&P andBurren Energy in Congo. In consideration of the entry of SNPC, the rights of M&P and Burren in relationto the M'Boundi development licence are extended to 2030 and those in relationto the Kouakouala development license are extended to 2023. SNPC, in turn, hasconfirmed that it will not acquire of rights in relation to the Kouilouexploration license as had previously been announced. This conclusion of this process demonstrates the climate of trust establishedbetween M&P, its partners, and the Republic of Congo. Furthermore, M&P announces the signature of a contract with Congolaise deRaffinage ("CORAF") to supply crude oil to their refinery, thus allowing theM'Boundi partners immediately to sell a further 5,000 bopd of production inaddition to the 62,000 bopd currently exported via the Djeno terminal. M&P, as operator of the M'Boundi field, points out that the rights of Tullow Oilin this development license will terminate in 2017. As a consequence Tullow Oilwill not benefit from the extension awarded to M&P and Burren Energy or from thecorresponding production. Furthermore, the estimate of the reserves of theM'Boundi field published by Tullow Oil (29.3.06) is not, to our knowledge,certified. Lastly, M&P wishes to emphasise that neither the operator nor thepartnership as a whole was consulted prior to publication of this estimate" Burren wishes to make several comments for clarification in relation to theabove announcement : • As previously announced in August 2005, the percentage interest inthe M'Boundi field being sold by Burren to SNPC is 3.5%, as a result of whichBurren's current 35% interest will fall to 31.5%. • The current term of the M'Boundi license expires in 2017 but isrenewable for 5 years by mutual consent to 2022. The new final licence expirydate of 2030 matches that previously announced. The current term of theKouakouala license expires in 2008 but is renewable for 5 years by mutualconsent to 2013. The new final expiry date of 2023 compares with a previouslyannounced final expiry date of 2018. • Whilst the developments described above have been orallycommunicated to Burren by M&P the formal documentation evidencing the approvalsreferred to in the announcement has yet to be seen by Burren. • Burren's original cash and profit oil consideration for thepart-sale of its M'Boundi interest has been utilised to secure improvements tothe terms of the original deal, being (i) the renunciation of SNPC's rights tothe Kouilou exploration license (ii) the longer than anticipated developmentlicence period for Kouakouala, and (iii) the final ratification of the La Noumbilicense award. 2. Group Drilling Update Burren is pleased to provide the following drilling progress report inTurkmenistan, Egypt and Congo (Brazzaville). Turkmenistan Appraisal well B250: this well, drilled on the boundary of the Burun fieldtested oil at a rate of 2,000 bopd on a 23/64" choke from a new oil pool with agross thickness of 120 metres at the top of the Lower Red Series reservoirsection : this is a record flow rate for a Burun well. This implies that theBurun field extends beyond currently mapped limits : determining the extent ofthis extension will require further drilling. Exploration well NDE002: This second exploration well on this prospect testedoil at a rate of 400 bopd on a 1/4" choke from a shallow four metre sand at adepth of 1384 metres. Burren is seeking permission to allow early productionpending approvals of a new production permit. Appraisal drilling will berequired to determine the extent of this discovery. The original deeperobjectives failed to find hydrocarbons. Exploration well Kara Tepe West : This first well on this shallow prospect inthe east of the Nebit Dag PSA area failed to find hydrocarbons and has beenplugged and abandoned. Congo (Brazzaville) On the M'Boundi field, well MBD1204, at the north west perimeter of the field,has encountered the Vandji reservoir below the oil-water contact and thereforereduced the extent of oil bearing reservoir in this area, thus requiring thedelineation of the northern boundary of the field to be reassessed. ConsequentlyBurren has reduced its estimate of the mapped oil-in-place from 1600 millionbarrels to 1400 million barrels. Egypt Well Washka Southwest -1 on the East Kanayis block has been drilled to a depthof 6,166ft on the prospect, to the north-east of the block. Despite recordingextensive oil shows in the target reservoir, wireline logging showed that thereservoirs were water-wet and the well has therefore been plugged and abandoned.The rig has just spudded an exploration well to the east , Waskha South-1. Future Exploration Drilling Five rigs are currently drilling an estimated 20 exploration wells planned forthe year between these three countries. Burren intends to provide quarterlyupdates on progress with the next update scheduled for the end of June thisyear. Enquiries: Burren Energy Tel: 020 7484 1900Finian O'Sullivan, Chief Executive OfficerAndrew Rose, Chief Financial Officerwww.burren.co.uk Pelham PR Tel: 020 7743 6676James HendersonAlisdair Haythornthwaite This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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