The target of this first well is the South-eastern portion of the Lenox Silurian Platform reef which is believed to extend South-east of Portrush's existing light oil production and natural gas indications on the delineated portion of the reef where the Richards and Martin wells are producing under their own pressure; no pump is required. The Martin and Richards well originally each tested 450 barrels per day but are currently choked back and the gas production is being flared. From the seismic analysis similar results are anticipated from this new well called the Spens 1-21.
Through to December 2003 the two wells produced a cumulative total of nearly 100,000 barrels of oil. The Martin well did not come on stream until April 2003. Typical reefs in the area can vary in size from approximately 300,000 barrels and 2BCF to over 1,000,000 barrels and 10 BCF of recoverable reserves.
Additional developments currently underway include property acquisitions, seismic work, and geological modelling. The on going work is intended to fully develop the reef structure and develop the shallow gas potential of the project. The upper gas zones have been encountered in all three holes previously drilled.
A pipeline is planned to be laid to hook up the gas that is currently being flared off as well as the anticipated gas production from upper zones. Progress is being made on this phase of the project. Details should be announced shortly. In addition further drilling on the reef structure is anticipated which will target the gas charged crestal portion of the reef which will be hooked into the planned pipeline.
The company will earn up to approximately a 20% working interest in the well. Oil production from the new well can be put on stream very quickly using the existing battery plant and infrastructure. This light oil commands a roughly four dollar premium per barrel.
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