Stream O&G reported the advancement of its Delvina Block gas exploration program Phase II with the award of the seismic tomography contract. This second phase of the seismic program is target oriented, focused on improving the definition of the three structures in preparation for drilling of the exploration wells. The additional seismic data will be integral to the successful execution of the Company's Plan of Exploration ("PoE") on the Delvina Block, accessing over 600 BCF of gas resources.
The field segment of the program will commence in May 2011, providing monitoring of the north, south and east structures adjacent to the existing producing Delvina field. The resulting information will be utilized to determine the location of the planned exploration well.
"Our exploration program at Delvina is moving forward as planned," said Dr. Sotirios Kapotas, President and CEO. "The Delvina gas field and Block offer significant growth potential for the Company, and is expected to provide new opportunities in a scarce gas environment. The production potential can be utilized in various ways to the benefit of Stream adding shareholder value."
Per the November 30, 2010 independent reserves report, the Delvina gas field and block were evaluated to hold approximately 616 BCF of gas initially-in-place (high estimates; AJM Petroleum Consultants). Future activities at Delvina are expected to result in the conversion of possible reserves into probable reserves, while the drilling of the first horizontal well is expected to convert probable into proved reserves and contingent resources into probable reserves. Drilling exploration wells in the adjacent structures is expected to convert prospective resources.
Stream plans to expand its existing gas market and is finalizing gas utilization plans which will support the Delvina development program timelines. A small power generation plant is expected to be installed in 2011 at the Delvina gas field. Plans are being finalized for a large scale power generation plant in support of the Company's full scale field and block development. These activities are expected to provide production for additional markets for power generation, oilfield enhanced oil recovery utilization and other industrial consumers.
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