Entek provided an update on the VR 342 well in the Gulf of Mexico where the Company has a 50% working interest.
The well is at 8,162 ft (Measured Depth) and has penetrated the primary L1 Sand target. Preliminary wire-line logging and RCI (MDT equivalent) analysis indicates greater than 40 ft of net oil pay with an API gravity of 32O based on interpretation of the RCI data.
Current operations are running side-wall cores to obtain additional reservoir and oil character information (including confirmation of the API gravity of the oil). The well will then be deepened to the planned total depth, which is 8,552 ft (Measured Depth) and the new hole section logged. Following this, production liner will be run across the open-hole section and the well will be suspended as a future producer. Development planning will begin immediately leading to first oil as soon as practicable. Further announcements will be made once the timing becomes clear.
The above results are as predicted pre-drill and provide further confidence in the gross 3P potential, established by previous drilling on the block, independently evaluated at circa 7.5 MMBO (1P 2.5 MMBO; 2P 4.8 MMBO; 3P 7.5 MMBO) and 9.5 BCFG (1P 3.8 BCFG; 2P 6.3 BCFG; 3P 9.5 BCFG).
As previously announced, it is not intended to test flow rate in this well. Analogue studies performed independently on Entek's request suggest potential flow rates of 500-1000 BOPD with minimal decline for the first 3-4 years. Further analysis will be conducted once side-wall core data has been analyzed. This is common practice in the Gulf of Mexico where numerous existing producing analogues give a high level of confidence.
CEO and Managing Director Trent Spry commented, "I am very pleased with the successful results of our first VR342 well which has delivered results to date as predicted. This is the first well in the Company's new oil focus and strategy in the Gulf of Mexico. Conventional oil production from the Gulf is an important part of the Company's strategy as it should provide significant cash flow for other value adding activities. We will continue to evaluate and high grade our oil prospects in the Gulf this year for drilling in 2012.
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