Stream O&G announced that the Ministry of Economy, Trade and Energy of Albania has given its formal approval for the execution of the Plan of Development ("PoD") for the Delvina gas field. The formal approval was the final ratification of the PoD that was submitted in early 2010. The approval of the PoD allows Stream to enhance production and sell petroleum products under Albpetrol's existing license for a period of 25 years with an option to extend, at the Company's election, in five year increments thereafter.
Delvina is one of the largest onshore gas fields in south east Europe and the only major producing gas field in Albania. Current production from the two existing wells in the field is 700 mcf/d of natural gas and 47 bbl/mmcf of natural gas liquids ("NGL"). The two wells to be worked over this year are integral to Delvina's development program for recompletion, fracturing, seismic monitoring and extended well tests; these will offer additional insights to the geological and reservoir characterization of the Delvina field and similar structures.
In addition, the exploration phases of the block offer significant growth potential for the Company. In October 2010, Stream kicked off Phase II of Delvina block's Plan of Exploration ("PoE") previously submitted to the Albanian authorities. Phase I was completed mid 2010; Phase II includes the drilling of a vertical exploration well in the first quarter of 2013 after the completion of further geological assessment and the integration of new data.
Connected to potential markets by existing pipelines, Delvina gas field and block production has the capacity to support significant thermal power generation for Albania or the enhanced oil recovery ("EOR") projects for the Company and others.
"We're pleased to receive the final ratification of our plan of development for the Delvina field," said Dr. Sotiris Kapotas, President and CEO. "Natural gas is in extremely short supply in Albania, and as the largest onshore gas field in south east Europe, it provides Stream with the potential to significantly increase available resources. In addition, an internal source for natural gas will contribute to the economics of our future EOR projects."
Stream continues the procurement of goods and services in preparation for its 2011 development program in Delvina, which contemplates workovers of the two existing wells and preparation for drilling a horizontal well in the field. In addition, Management is preparing to evaluate NGL potential upside, future horizontal well plans and NGL development.
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