Aurelian provided the following operational update.
- First Siekierki Multi Fracced Horizontal Well ("MFHW") Trzek-2 begins stabilized flow rate test
- Stabilized flow rate test delayed by two weeks due to mechanical problems during well clean up. Gas inflow in six of the ten well bore sleeves currently restricted. Likely cause is either clean up debris lodged in sleeve ports or sleeve ports being temporarily closed.
- Reservoir quality good, with tracers confirming that gas was recovered from all ten fracced zones during initial production test. Down hole logs also confirm good quality reservoir throughout horizontal wellbore.
- If these well bore sleeve mechanical problems persist after the end of the stabilized flow test, appropriate remedial work will be undertaken.
- Stabilized rate at the end of the 14-21 day test is likely to be less than the 8mmscf/d that the Company had originally expected. However, good reservoir quality indicators and expected lower production decline rates means that Aurelian should still recover 16-28 bcf from this well and 346 bcf (net) from 20 wells across the full project.
- Second Siekierki MFHW, Trzek-3, drilling ahead of schedule
- Casing set at 3,699 meters after 57 days, compared to 90 days in Trzek-2
- Improved drilling performance due to implementation of Trzek-2 learning
- Update on size of gas column and reservoir quality to be provided in April
- Stabilized flow test results expected by late June or early July
- First Bieszczady well targeting prospective resources of up to 100 million barrels (gross) encounters active oil and gas system in zone above primary targets
- Excellent oil and gas shows and flow of oil and gas obtained in two short term drill stem tests indicates existence of an active oil and gas system above primary targets
- Currently drilling at 3700 meters, still to reach three primary oil targets located between 4,000 and 4,800 meters
- Acquisition of additional 300 km of 2D seismic has been completed and will be interpreted later this year, block coverage now 40%
- Second well in program expected to spud late 2011/early 2012
- Confirmation that there will be no restrictions on the development of Polish unconventional gas
- Henryk Jesierski the Chief Geologist at the Polish Ministry of Environment confirmed at a conference held at the British Embassy in Warsaw on the 16th of March 2011 that Poland will not be blocking unconventional and shale gas development.
Rowen Bainbridge, Chief Executive commented, "While the mechanical performance of the down hole and completion equipment on Trzek-2 has been disappointing, we believe that this can be corrected, will not recur in the future and will not impact the potential of our Siekierki Tight Gas Project. The Trzek-3 well is performing better than we had hoped and we will have stabilized flow rates from both MFHWs by the end of June/beginning of July which will help us optimize the development of this key project.
The Bieszczady well update is encouraging and the existence of an active oil and gas system above our primary targets provides us with further options as to how we may commercialize this well in the future.
Aurelian is moving forward with our operations and our plan to create value in both of our Core Areas. As 2011 progresses, I look forward to bringing you further updates, particularly on our planned activity for the second half of the year when we expect to spud the Krzesinki-1 conventional gas well in the Greater Siekierki Area and potentially two further high impact exploration wells in the Slovakian and Polish Carpathians."