SA-2 is the third well completed in our initial drilling program in the South Alibek Field. It is the northern-most well drilled along the crest of the field, 1.5 miles north of our producing well SA-1, and nearly 3 miles from the recently drilled SA-4. The SA-4 and SA-2 wells will be put on test production, and with the current production from SA-1, the crude oil will be trucked to local markets.
The Company estimates that approximately 1250 acres has been delineated by the three new wells, over an area of the field that is three miles in length and half a mile in width. Within this area, the estimated average net pay is 415 feet in the KTII and 303 feet in the KTI. This comprises a large section of the field's crestal area. The Company estimates the field could have an areal extent exceeding 10,000 acres based on the available seismic data, most of which still remains to be confirmed by future wells.
Ryder Scott Company estimated gross Proved reserves of approximately 21 million barrels for year-end 2002 prior to the commencement of this initial drilling program, and are contracted to provide independent estimates of Proved reserves for the 2003 year-end filing with the SEC. Proved reserves are primarily based on actual drilling results, and with the three new wells, the Company has an expectation that these proved resources could increase by 3 times previous estimates. Transmeridian's net interest in these resources is now 50% (40% net of the Kornerstone back-in after payout). Management Comments
"This is a significant well for Transmeridian. It confirms the continuation of the field's crestal area 1.5 miles north of the previous well control; indicates the presence of the same reservoirs as seen three miles to the south and provides the basis for proving up more of our resources, as does SA-4,'' commented Bruce Falkenstein, Vice President Exploration & Geology. "Based on preliminary results of the logging, SA-2 and SA-4 have both indicated a deeper lowest known oil, with potential pay zones identified 650 feet deeper than previously mapped. This discovery of deeper oil pay could increase the field's total volumetrics. Both of these wells will provide much needed information for our future resource outlook."
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