11th Oct 2006 07:00
Rheochem PLC11 October 2006 Rheochem Plc ("Rheochem" or the "Company") (AIM:RHEP) Drilling results from North Sea Investment • Athena 14/18b-15 well- . Electric logs indicate that the well has intersected a total oil column of 632 feet in the Upper Leek formation • 10% ownership by Zeus Petroleum Ltd (Rheochem holds 33.3% strategic investment in Zeus) Rheochem announces results from Ithaca Energy Inc, the operator of North SeaAthena 14/18b-15 well in the outer Moray Firth area. Drilling has reached totaldepth of 11,051 feet with electric logs indicating that the well intersected atotal oil column of 632 feet in the Upper Leek formation. Rheochem owns 33.3% ofZeus Petroleum which in turn has a 10% interest in the Athena 14/18b-15 welloperated by Ithaca Energy. The well was drilled on time and on budget at a high angle of 60 degrees fromvertical through the Lower Cretaceous Upper Leek reservoir and encountered thereservoir 50 vertical feet higher than the nearby 14/18-7 well that tested 850barrels of oil per day (bopd). The 14/18b-15 well intersected 632 feet of gross oil-bearing sandstones at the60 degree angle drilled, representing 329 feet vertical. Electric logs and otherwell data received to date indicate that this interval contains 253 feet of netporous oil bearing sands representing 127 feet vertical. Porosities in the oil column range from 12 % to 20 % with an average of 16.5%. A32 foot core was recovered and in correlation with the electric logs, thereservoir parameters as observed are of higher quality than the 14/18-7 well. Currently, production casing is being run to the total depth drilled and will beperforated for testing purposes. It is anticipated that testing will requireapproximately 9 days and will commence while the rig is on location. Dependingupon the successful results of the tests, the well will be suspended for futureproduction. Ithaca is the operator with the beneficial interest of the participatingcompanies being 70% Ithaca, 20% EWE Akteingesellschaft (EWE) and 10% ZeusPetroleum (previously Wimbledon). Haydn Gardner, CEO, of Rheochem commented: "In addition to providing drilling services to the natural resources industry Ibelieve our aim of building a portfolio of strategic investment directly intooil and gas assets with near term production potential will significantlyleverage value in Rheochem. Subject to successful testing I look forward tofurther results from Ithaca as they seek to define this discovery." For more information: Haydn Gardner, CEO, Rheochem +44 (0) 20 79877511 Laurence Read/Leesa Peters +44(0) 20 74296666Conduit PR OVERVIEW OF Zeus Zeus has an interest in ten licence blocks (two partial blocks) located acrossthe central North Sea Basin of the UK Continental shelf covering an area ofapproximately 2,000 km2. These are comprised of 4 traditional blocks with a 10%interest and 6 Promote blocks with a 100% operated interest. The licence blocks include the Athena oil discovery and a further 19 prospectsand leads in a variety of hydrocarbon plays. Athena Zeus has a 10 % interest in licence P.1293 covering this discovery. The operatorand 70% interest owner is Ithaca Energy. The Athena discovery is on block 14/18b and is located immediately west of theClaymore and Scapa fields and therefore close to existing infrastructure. It hasbeen independently reviewed by Gaffney Cline Associates and considered aprobable development with low to mid case gross reserves estimated around 24.4MMbbl oil. (2.4 MMbbl to Zeus). Drilling of an appraisal well on Athena has been completed and confirmed thepresence of oil in substantial quantities. Subject to successful testing,further drilling to develop the accumulation and the application for fielddevelopment is planned. Triton and Poseidon Zeus has a 10 % carried interest in the licences covering the blocks 13/16b, 13/17 and 13/18 which contain the majority of the Triton and Poseidon leads. Thiscarry may be reduced subject to a future farm out agreement by Ithaca. These leads were described by Ithaca in their 12 July 2006 release to the LondonStock exchange as follows: "Triton and Poseidon are the two largest 2D seismic mapped leads in Ithaca'sportfolio and are of a highly attractive stratigraphic play type, with the largeupside potential within the prospective Upper Jurassic Buzzard and LowerCretaceous fairways. Independent consulting firm Gaffney Cline and Associates ('GCA'), in its report for the company's recent public offering, has ascribedgross unrisked recoverable Prospective Resources of between 50 to 500 millionbarrels of oil with a best estimate of 150 million barrels to Triton and grossunrisked recoverable Prospective Resources of between 50 to 400 million barrelsof oil with a best estimate of 100 million barrels to Poseidon." Ithaca recently completed an extensive 3D seismic group shoot covering thelicences it holds on blocks 13/16b, 13/17 and 13/18 to reduce the uncertaintyand mitigate risks associated with these leads. Subject to the results of the data interpretation and rig availability, Ithacahas stated that it plans to drill a well on one of the blocks containing theseleads in 2007. Other Assets Zeus was awarded the following blocks under Promote licences in the 23rd UKSeaward Licensing rounds and has a 100% interest: block 14/11, P.1289 blocks 12/15, 13/11, 13/12 & 13/13, P.1393 block 17/7, P.1396 A Promote Licence gives the company 2 years from date of issue to attracttechnical, environmental and financial capacity to complete an agreed workprogram which includes the requirement to drill a well within the following 2years. These Promote licences will expire on 22/12/2007 if an acceptable workprogram is not agreed. In accordance with AIM Guidelines, Haydn Gardner, MD of Rheochem, is the qualified person that has reviewed the technical information contained in this press release. -ENDS- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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