18th May 2007 08:00
Emerald Energy PLC18 May 2007 Emerald Energy Plc FOR RELEASE 18 May 2007 Operations Review and Update Emerald Energy Plc ("Emerald" or the "Company") is pleased to provide thefollowing operations update prior to the Annual General Meeting on 18th May: Colombia - Exploration and Development Since September 2006 the Company has been awarded four exploration andproduction contracts (Maranta, Ombu, Helen and Jacaranda) by the NationalHydrocarbon Agency of Colombia ("ANH"). Exploration activities are now focusedon these four new areas as prospectivity has been identified on each and the ANHcontracts include improved fiscal terms. Seismic acquisition is planned tocommence during the third quarter of 2007 prior to potential drilling activityin 2008. Drilling of the Aureliano No. 1 exploration well on the Fortuna block wascompleted in late January, with the target La Luna limestone formations beingencountered as forecast. An extended phase of production testing has beenconducted, including the use of a workover rig for perforation and acidstimulation. Following these operations, a flow rate of 10 bopd of 25 degree APIgravity oil has been established. The recovery of oil confirms the presence ofhydrocarbons but the low flow rate indicates that communication with a fracturenetwork has not been established. A detailed study of the data acquired duringthe drilling and testing of the well is being undertaken to determine the futurepotential of the well and the Aureliano accumulation. A re-entry programme for two wells in the abandoned Totumal field to the southof Aureliano is being prepared, with the aim of determining the potential torecommence production from the field. The Totumal field produced 0.8 millionbarrels from the La Luna formations prior to abandonment in 1993. It isanticipated that data from these re-entries will also assist in theinterpretation of information from the Aureliano No.1 well. A fracture stimulation was conducted in May 2007 on the Silfide No.1 well in theFortuna block. The well had been shut-in since the middle of 2006 due to amechanical failure of the down hole pump. The well is cleaning up after theoperation and a flow rate of 35 bopd, a modest increase over the pre-workoverrate, has been established. The Campo Rico No.4 development well commenced drilling in April 2007 in theCampo Rico field. The well is located to recover reserves from the Miradorformation in the north of the field that would not be recovered by the existing3 producing wells. The Campo Rico No.4 well was drilled to a depth of 10,880 ftand logged hydrocarbon in the Mirador formation. The drilling rig has beendemobilised from the location and a workover rig is being mobilised forcompletion operations. A pipeline is being constructed between the surfacelocation of the well and the Campo Rico field production facilities. Firstproduction from the Campo Rico No.4 well is planned to take place prior to theend of June 2007. Under the commerciality status granted by Ecopetrol for theCampo Rico field development, the drilling and pipeline costs are shared withEcopetrol on a 50/50 basis, as is future production from the well. The Centauro Sur field development was awarded commerciality status by Ecopetrolin May 2007 and joint operations commenced. The reimbursable costs on this fieldhave been recovered and future costs and production for this field are nowshared with Ecopetrol on a 50/50 basis. Colombia - Production Daily gross production for the first quarter of 2007 averaged 3,508 bopd,compared to 3,586 bopd achieved in the fourth quarter of 2006. Production inApril 2007 averaged 3,821 bopd following a number of successful wellintervention operations during the first quarter. In the Campo Rico field, a workover was conducted in the Campo Rico No.1 well toreplace the hydraulic jet pump with an electrical submersible pump, re-perforatean existing producing zone and add perforations in a new zone, resulting in anincreased production rate of 160 bopd. In the Vigia field, workovers were conducted in the Vigia No.1 and No.3 wells.In the Vigia No.1 well, the Gacheta formation was isolated and the electricalsubmersible pump was reconfigured to improve its performance and in the VigiaNo.3 well, the Une formation was isolated the Gacheta re-perforated. Productionfrom the field was increased by 210 bopd as a result of these workovers. Syria, Block 26 - Exploration The Khurbet East No.1 exploration well was spud in mid-February 2007 on theKhurbet East prospect, a fault-bound structural culmination, with closure mappedat several potential reservoir levels including Cretaceous, Triassic andPalaeozoic ages. The Khurbet East prospect is located approximately 12kilometres southwest of the Souedieh oil field and 12 kilometres south of theRoumelan oil field. Hydrocarbon shows were encountered while drilling the Tertiary Chilou andCretaceous Massive formations. Wireline logs indicated a gross hydrocarboninterval of 31 metres and a net hydrocarbon interval of approximately 22.5metres in the Massive formation. The presence of hydrocarbon in the Massiveformation was confirmed by a wireline formation sampler which retrieved a sampleof 21 degree API gravity oil to surface. Wireline logs indicated a potential nethydrocarbon interval of approximately 26.4 metres in the Chilou formation ofwhich some 19 metres are contiguous in the top of the Chilou 'B' formation. Awireline formation pressure sampler could not be run to confirm the presence ofhydrocarbon in the Chilou formation as the sampler tools available were notsuitable for large diameter well bores. The well has reached a total drilling depth of 3,800 meters. Wireline loggingindicated additional potential hydrocarbon intervals in the Triassic formations.Several intervals have been identified in the well for potential productiontesting which is expected to commence shortly. However, there is a possibilitythat the shallow zones may not be production tested in this well due to acombination of the mechanical configuration of the shallow casing strings andthe rig availability which may require the Crosco 602 rig to be demobilised fromthe Khurbet East No.1 location prior to testing all the intervals identified forpotential production testing. Any intervals not tested in this well may beproduction tested at a later date using a workover rig. Immediately after completing operations on Khurbet East No.1, the Crosco 602 rigis planned to drill an appraisal well, Khurbet East No.2, on the Khurbet Eastprospect, with the main objective of appraising and testing the potentialhydrocarbon accumulations in the Chilou and Massive formations. This well willalso complete the minimum work obligation for the initial exploration phase inthe block. Angus MacAskill, Emerald's Chief Executive Officer, said: "We are very pleased with the enhanced production in Colombia following workoveractivities, and look forward to additional production from the latest Campo Ricodevelopment well. In exploration, we are very encouraged by progress with theKhurbet East No.1 well in Syria and look forward to further activity both inSyria and in the new contract areas in Colombia." Company web site may be found at www.emeraldenergy.com Enquiries: Helen Manning 020 7925 2440 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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