12th Aug 2008 07:00
ENEGI OIL PLC
Trading symbols:
London Stock Exchange: ENEG
Bourse de Luxembourg: GB00B29T9605
12 August 2008
Enegi Oil Plc
('Enegi' or 'the Company')
Update on Garden Hill South activities
Highlights:
·; The Company has taken delivery of Nabors Rig 45
·; The rig has been transferred to Garden Hill South and will commence operations within the next seven days
·; Existing Garden Hill South well flowed oil and gas during recent pressure test
·; Enegi will re-enter PAP#1-ST#2 and then drill a horizontal sidetrack
·; The drilling program meets the lease conditions, extending it to 12 August 2012
Enegi, the western Newfoundland focused oil and gas company, announces that PDI Production Inc. ('PDIP'), its Canadian operating subsidiary, has taken delivery of Nabors Rig 45. The rig has been transferred to Garden Hill South ('GHS'), a discovered oil field, where PDIP intends to drill a horizontal sidetrack.
GHS is an onshore oil field that is 100% owned and operated by PDIP. Production tests from GHS to date have produced over 24,000 barrels of high quality crude with a gravity of approximately 51° API. TRACS International has estimated that GHS contains mean resources of 8.6 mmboe. The current drilling program will allow PDIP to meet the conditions of production lease PL2002-01, thereby extending it until 14 August 2012.
In preparation for the arrival of the rig, a pressure test was performed on the existing well, PAP#1-ST#2 which was closed in last year as part of the preparations for the new, horizontal sidetrack. During the pressure test, oil and gas were successfully flowed on various occasions and the well-head pressure returned to its normal level of 15,000 kPa. In light of this, PDIP will use the rig to re-enter the sidetrack, clean up the bottom 130 metres, which is believed to be blocked, drill farther into the formation, and then log the open hole. This will give the Company a better understanding of the reservoir and may allow it to declare its first, proven reserves.
Once PAP#1-ST#2 has been logged, PAP#1-ST#3, the horizontal sidetrack, will be drilled to a Total Depth of 4,448 metres, equal to a True Vertical Depth of 3,450 metres. The drilling program is expected to take approximately 80 days.
The PAP#1-ST#3 well is targeting the Aguathuna Formation, a dolomitized limestone formation of the Early Ordovician St. George Group. An 18.5 metre thick porous reservoir interval is known to exist at the top of the Aguathuna Formation in the original PAP#1 well. The PAP#1 and PAP#1-ST#2 wells have previously produced more than 24,000 barrels between them from this interval.
The Company commissioned two external reports and one internal report on the horizontal sidetrack which forecast that the well should produce between 2,000 and 2,500 barrels/day plus associated gas for the first year. Taking into account these levels of production and long term price estimates, Enegi expects to be self-financing.
Alan Minty, Chief Executive Officer of Enegi, said:
"With the Garden Hill South site now fully prepared, we are tremendously excited about commencing this drilling program. The Garden Hill South site has been fully prepared. The results of the recent pressure test on PAP#1-ST#2 are very encouraging and a great first development in the overall drilling program. The horizontal sidetrack has always been our primary focus and it is forecast to be on production by the end of the year. The forecast levels of production from this well would make Enegi self-financing and allow us to deliver both our onshore and offshore development programs."
Enquiries
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Enegi Oil |
Tel: + 44 161 817 7460 |
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Alan Minty, CEO |
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Kevin McNair, CFO |
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Cenkos Securities |
Tel: + 44 207 397 8900 |
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Joe Nally |
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Stephen Keys |
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Fox-Davies Capital |
Tel: + 44 207 936 5200 |
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Daniel Fox-Davies |
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Richard Hail |
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College Hill |
Tel: + 44 207 457 2020 |
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Nick Elwes |
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Paddy Blewer |
www.enegioil.com
Qualified Persons
The information in this release has been reviewed by Barath Rajgopaul MSc (Mech. Eng.) C. Eng, a director of Enegi. Mr. Rajgopaul has over 25 years experience as a petroleum engineer.
The Company
Enegi Oil Plc is an independent oil and gas group whose objective is the identification, development and operation of hydrocarbon opportunities. The Group's current operations are focused on assets on and around the Port au Port Peninsula in western Newfoundland, which, although lightly explored, is in an active petroleum system with light oil having previously been discovered there. The Group's assets include a proven discovery, Garden Hill South, and four prospects: Shoal Point, Garden Hill Central, Garden Hill North and Lourdes.
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NUOG.L