10th Nov 2005 07:01
Cairn Energy PLC10 November 2005 EMBARGOED FOR RELEASE AT 07:00 10 November 2005 CAIRN ENERGY PLC Forthcoming Site Visit 28th - 30th November 2005 & Operational Update Cairn Energy is hosting a visit to India for analysts and investors from 28th -30th November 2005. The itinerary includes a tour of Cairn's assets in Gujaratand Rajasthan. There will be a presentation on the Group's activities, whichwill be available after the 29th November at www.cairn-energy.plc.uk in thedownloads section of the Investor Relations page. No further trading oroperational update will be given during the visit. As part of its normal programme of communications, Cairn will provide a tradingand operational update on 17th January 2006 ahead of the full year results,which are scheduled to be announced on 14th March 2006. The following summary of operations since the interim results in September 2005is provided as information prior to the analyst and investor visit to India. Operational Update A) Rajasthan (Block RJ-ON-90/1) Cairn is pursuing its goal of adding to the Rajasthan resource base through itsactive exploration and appraisal campaign. The company continues to evaluate anddevelop its existing discoveries to bring them onto production as soon asreasonably possible. The Field Development Plans for Mangala, Aishwariya,Raageshwari oil and Saraswati have been completed and were submitted to theGovernment of India in October 2005. Discussions are on-going with Mangalore Refinery and Petrochemicals Limited, anONGC subsidiary, which is the appointed nominee to take delivery of theRajasthan crude, with regard to a detailed Crude Oil Sales Agreement. Studiesfor the Front End Engineering Design for Mangala are complete and the tenderingprocess for the detailed work is almost concluded. Rajasthan Development Mangala, Bhagyam and Aishwariya The evaluation of the northern fields, Mangala, Bhagyam and Aishwariya, is nowmoving to a phase of detailed analysis of the potential for any additions to thevolumetric and reserve base. In particular: i) pre-stack time migration work on the 3D seismic indicatesthe potential for the main field bounding faults to be positioned furtherup-dip. A dedicated well programme designed to test the crestal fault locationsin these fields is currently being planned. ii) A re-appraisal of petrophysical parameters in these mainfields suggests that the current evaluation may have been conservative whencompared with analogous fields and crudes. A focussed special core analysisprogramme, involving new core material, is planned to evaluate the watersaturation parameters to address this issue. The results of this study areexpected in Q1 2006. Rajasthan Exploration Greater Vijaya and Vandana area - N-R-4 Discovery The N-R-4 discovery well, drilled six and a half kilometres (km) west of theVijaya and Vandana fields, was drilled to a true vertical depth of 2741 metres(m) in pre-rift formation. The well encountered a number of oil bearinghorizons, in similar units to those seen at Vijaya and Vandana, and has a logevaluated 38 m of oil bearing reservoir. Oil was recovered from MDT samples at three reservoir horizons prior to threeopen-hole DST tests being carried out. The middle zone flowed oil into thetubing at an estimated rate of 40 barrels of oil per day (bopd) but did not flownaturally to the surface. The other two zones did not flow. It is anticipatedthat artificial lift, with or without stimulation will be required in futureoperations. Based on this well and an appraisal well (N-R-5) together with 3D seismicmapping, the oil in place for the N-R-4 discovery is initially estimated at 100- 400 million barrels (mmbbls) gross. In this type of stratigraphic trap,recoveries are anticipated to be low. The N-R-4 discovery further extends westwards the stratigraphic trap potentialseen at the Vijaya and Vandana fields. GS-V-1 Gas and Condensate Discovery - Greater Saraswati area The GS-V-1 Well was drilled to a separate structure nine km to the North West ofthe Saraswati field in the East-Central area of the Rajasthan contract area. Thewell reached a total depth (TD) of 2190 m in a fractured pre-rift formationwhere it encountered 12 m of net gas pay. An open-hole DST conducted over a 30 minterval of fractured sediments produced at a maximum stabilised rate of 3.2million standard cubic feet per day and 70 bopd of 47.5 degree API condensate ona 32/64" choke. While appraisal drilling will be required, the initial gas in place estimatesfor the GS-V-1 discovery are in the 20-30 billion cubic feet gross range.A number of exploration prospects around the GS-V-1 discovery highlight furthergas potential which will be targeted by an exploration drilling programme. Exploration 3D Seismic A 300 square km exploration 3D seismic survey has been acquired over the area tothe south of Bhagyam and to the west of Mangala. Interpretation of this surveyis now underway and the first exploration well based on this data is expected tospud before the end of the year. Kameshwari-West-1 - North-Central area The Kameshwari-West-1 well was drilled to a TD of 1500 m in pre-rift formation.Strong residual oil shows were observed in good reservoir sands in the BarmerHill and Fatehgarh levels in this separate structure, which lies some 16 km NWof the Kameshwari discovery. The Kameshwari-West-1 well, although essentially a dry hole, gives positiveevidence for the presence of good reservoir and hydrocarbon migration throughthe, as yet, poorly explored west-central part of the contract area. Rajasthan Appraisal Vijaya and Vandana appraisal well The N-R-3 appraisal well, drilled four km south from Vijaya -1 and two km fromVandana-1, encountered 55 m of log evaluated oil bearing reservoir. Based on the four wells drilled to date and the 3D seismic mapping, the oil inplace for the Vijaya & Vandana discoveries is estimated at 200 - 900 mmbbls. Inthis type of stratigraphic trap, recoveries are anticipated to be low. Greater Vijaya and Vandana area appraisal of N-R-4 discovery The N-R-5 appraisal well 8 km to the north of the N-R-4 discovery wellencountered 37 m of log evaluated oil bearing reservoir. Raageshwari 3ST appraisal well The Raageshwari-3ST appraisal well was drilled into a structural compartment onthe NE flank of the Raageshwari field. The well encountered 15 m of oil bearingreservoir in the Thumbli formation. The additional oil in place established by the Raageshwari -3ST well isestimated to be 5-15 mmbbls gross. Bhagyam Gas Well Following the discovery of a gas cap in the nearby N-I accumulation, a well isbeing planned at the crest of the Bhagyam field, to test the potential foradditional gas cap volumes in both the Fatehgarh and Barmer Hill formations, aswell as to gather information on the main bounding fault and the Fatehgarh oilreservoir at the field crest. Gas cap volumes are potentially valuable as a future fuel source to power theenergy demands of the nearby major fields as an addition to the considerable gasvolumes discovered further south in the block. B) Cambay Basin CB/OS-2 - Gauri Oil The G-A-3 Gauri oil well has been commissioned and has produced first oil. Oilis evacuated through the gas system at the Suvali plant in Gujarat. The futureperformance of this well under depletion will be important in assessing therecoverable potential in similar more extensive channel reservoirs at Lakshmi. C)Cambay Basin CB-ONN-2001/1 - Vanthvali -1 The ONGC operated Vanthvali -1 exploration well is currently operating. D) KG Basin KG-DWN-98/2 Following the drilling of the "D" discovery well in August 2005, drilling hasyet to recommence on this ONGC-operated, deep water block. A Padmavati appraisalwell is expected to spud before the end of the year after which an explorationwell on the "U" prospect is planned. Enquiries to: Cairn Energy PLC:Analysts/InvestorsBill Gammell Tel: 0131 475 3000Kevin HartMike WattsMediaDavid Nisbet, Head of Group Communications Brunswick Group LLP:Patrick Handley, Mark Antelme Tel: 0207 404 5959 NOTES TO EDITORS: •Cairn focuses its activities on the geographic region of South Asia. The Group holds material exploration and production positions in west India, east India and Bangladesh along with new exploration rights in northern India and Nepal. •This focus on South Asia has already resulted in a significant number of oil and gas discoveries. In particular, the Company made a major oil discovery (Mangala) in Rajasthan in the north west of India at the beginning of 2004. •India currently imports approximately 2 mmbbls. Domestic production is approximately 650,000 bopd of which approximately 50,000 bopd comes from the Cairn operated Ravva field. For further information on Cairn see www.cairn-energy.plc.uk This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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