2nd Oct 2009 07:00
Emerald Energy Plc
2 October 2009
Operations Update - Syria, Block 26
Emerald Energy Plc ("Emerald" or the "Company") is pleased to provide the following update on well operations in Colombia.
Colombia, Matambo Block - Gigante No.2 Caballos Fracturing
Hydraulic fracture stimulation operations on the Caballos formation in the Gigante No.2 well have been conducted. The formation was treated with chemicals and an acid soak, and subsequently the initial stages of the fracturing operation were conducted. These initial stages provided information to be used for the final design of the remaining fracturing operation.
Prior to commencing the remaining fracturing operation, the well was flow tested over a 53 hour period, under natural flow and through a 32/64 inch choke, at an average oil rate of approximately 538 barrels per day with a water cut of 3.5%. This oil rate is approximately 2.9 times the oil rate of 185 barrels per day recorded during the equivalent natural flow test conducted prior to recent operations and reported on 27 July 2009.
Based on the results to date, the Company has decided not to conduct the remaining fracturing operation at this time. The Company now plans to conduct an extended flow and formation pressure build-up test of the Caballos formation which is expected to take up to one month. If, following this planned testing, the Company believes that further hydraulic fracture stimulation operations are warranted, the design of such future operations will be optimised using the information acquired during the current operations.
Following the completion of the planned operations in the Caballos formation, the Company and its partner, Ecopetrol, plan to commence evaluation and flow testing operations in the overlying Tetuan formation, which may include the application of hydraulic fracturing, or may complete the well as a producer from the Caballos formation.
Colombia, Ombu Block - Capella No.SH1X Slim-hole Well
The Capella No.SH1X slim-hole well has been drilled to a depth of 1,350 feet. At this depth, the drilling assembly became stuck and operations to retrieve the equipment continue. The Company is working with the drilling contractor to resolve the current status and optimise the future drilling process to allow successful slim-hole well drilling. The drilling contractor is working under a turnkey contract with provisions for a fixed cost per well.
Emerald's Chief Executive Officer, Angus MacAskill, said:
"We are pleased with the progress in operations to enhance the Caballos formation in the Gigante No.2 well in Colombia. Although the operational difficulties encountered in Colombia to date with slim-hole drilling in the Capella field are somewhat disappointing, we plan to continue efforts to apply this technology with its potential for low cost appraisal in certain areas of the Capella field."
Enquiries: Lisa Hibberd 020 7925 2440
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers (the "Code"), if any person is, or becomes, 'interested' (directly or indirectly) in 1% or more of any class of 'relevant securities' of the Company, all 'dealings' in any 'relevant securities' of the Company (including by means of an option in respect of, or a derivative referenced to, any such 'relevant securities') must be publicly disclosed by no later than 3.30pm (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which any offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the 'offer period' otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an 'interest' in 'relevant securities' of the Company, they will be deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all 'dealings' in 'relevant securities' of the Company by any offeror or the offeree company, or by any of their respective 'associates', must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose 'relevant securities' 'dealings' should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's (the "Panel") website at www.thetakeoverpanel.org.uk.
'Interests in securities' arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an 'interest' by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a 'dealing' under Rule 8 you should consult the Panel.
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