12th Jan 2006 09:44
Emerald Energy PLC12 January 2006 Emerald Energy Plc FOR IMMEDIATE RELEASE 12 January 2006 Operations Update - Colombia Emerald Energy Plc ("Emerald" or the "Company") is pleased to provide thefollowing update: Campo Rico Block The 172 sq km of 3D seismic acquired on the Campo Rico block is currentlyundergoing enhanced processing. To date, it has been used to evaluate potentialdrilling locations for both exploration and development wells and the firstexploration well, Centauro South No.1, will be drilled in the first quarter of2006. Campo Rico Field The Campo Rico No.1, 2 and 3 wells are currently producing at an aggregate rateof 3,170 bopd. Once the final interpretation of the 3D seismic is completed, theoption to drill Campo Rico No.4 for better drainage of the reservoir will beevaluated. If necessary, the well will be drilled later in 2006. Ecopetrol has advised the Company that it has granted commercial status to theCampo Rico field and exercised its right to back-in for 50% of the discovery.Under the terms of the Campo Rico Association Contract, Ecopetrol will nowreceive 50% of the production after the deduction of 8% royalty oil and willreimburse Emerald for 50% of the costs. Vigia Field The construction of early production facilities at the Vigia field is nowcompleted and the Vigia No.1 and No. 3 wells are currently producing 1,095 bopd.The testing and production start-up of the Vigia No.2 well has been delayed dueto technical problems with the well. A workover rig will be contracted by theend of this quarter to re-enter this well for remedial work. Drilling the Vigia No.4 well is planned for the second quarter of 2006, withVigia No.5 to follow later in the year, should seismic interpretation andreservoir modelling indicate the requirement for another well. Emerald's in-house estimate for the Vigia field reserves, excluding thepotential of the Vigia No.2 drainage area, is 3 mmbbl for proven and probablereserves and 6 mmbbl for proven, probable and possible reserves. It isanticipated that, following the flow test results from the Vigia No.2 well andcompletion of the enhanced processing of the 3D seismic data, the independentreserve report for Vigia will be completed in time for the announcement of 2005preliminary results. Emerald has presented its application for commercial status of the Vigiadiscovery to Ecopetrol and is currently awaiting its response. El Algarrobo Block (Operated by Rancho Hermoso) It is anticipated that drilling of the exploration well Agueda No.1 willcommence in February 2006. Gigante Field The Gigante No.1A well is currently being produced at a restricted rate of 500bopd. After 5 years of operation and 2 million barrels of oil produced, theproduction tubing requires replacement. A rig is being mobilised to the wellsite and the workover is expected to commence within five days. During theworkover, a larger capacity pump (ESP) will be installed to evaluate thefeasibility of increasing production from the well. Silfide Field The Silfide No.1 well has been put on test production using a hydraulicallyoperated rod pump and has been produced at 40 bopd. Analysis of seismic,drilling and logging data indicates that the well has penetrated a secondarytarget and not the primary Lisama target. Ecopetrol has granted the Company athree-month extension to the current exploration period to evaluate an option ofdrilling Silfide No.2 to appraise the discovery. Technical Evaluation Agreements (TEA) The technical studies required under the Mantecal and Altamira TEA's have beencompleted and presented to Agencia National de Hidrocarburos, the Colombianlicensing authority. Emerald currently has no plans to apply for an explorationcontract within these areas. Acquisition of the aeromagnetic survey over Cachama and Las Brisas areas hasbeen completed and the data is currently being processed and interpreted.Existing 2D seismic data will be reprocessed, interpreted and intergrated withthe aeromagnetic data. Drilling Rigs Saxon, the drilling contractor, is completing the assembly of Rig 223 forcommissioning and acceptance testing during January 2006 after which it isexpected to be contracted by Emerald to drill three wells with an option foradditional wells thereafter. Production Total gross production for 2005 was 1.2 million bbl (2004: 0.5 million bbl);average daily production for 2005 was 3,304 bopd (2004: 1,322 bopd). In thefourth quarter of 2005, Emerald achieved an average daily rate of 4,451 bopd (Q42004: 1,971 bopd). During eight days in the fourth quarter of 2005, productionexceeded 5,000 bopd. Currently, with reduced production from Gigante No.1A andVigia No.2 shut-in, production is 4,750 bopd. Alastair Beardsall, Emerald's Chairman, said: "Our efforts during 2005 have produced solid results on which we intend tobuild. Continued growth in the Colombian operations together with our commitmentto achieving exploration success in Block 26, Syria, will further enhanceproduction and reserves in 2006." 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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