Sea Dragon provided the following update on its operations in Egypt.
NW Gemsa Concession
Al Amir SE#8 Well: The well was spud on May 20, 2011 and successfully drilled to its total depth of 10,750 ft. This is the second of four water injection wells planned for the Al Amir SE water secondary recovery project. Well logs indicate good quality sands in both the Kareem Shagar and Rahmi zones, well suited for water flooding purposes. Pressure measurements indicate that communication exists with other producers in the area. The well was successfully perforated on July 10(th) in the interval 10,404 to 10,432 ft within the Kareem Rahmi interval. The Kareem Shagar Formation will be perforated at a later date.
Geyad-5 Well: The Geyad-5 water injection well was spud on July 23(rd) , 2011 and is currently drilling below 400 ft. The well is expected to reach a total depth of 7,000 ft. and bottom in the Upper Rudeis Formation. This well is located approximately 1.1 km west-south west of Geyad-1X and 2 km of the recently drilled Geyad-3C well. It is targeting the Kareem Formation water leg in the western edge of the field.
Water injection is expected to commence in Q-4, 2011. This marks the beginning of the water flood project which will result in significant increase in recoverable reserves and production levels from the field.
Current production from the Al Amir SE and Geyad fields is running steady at around 8,000 bopd (800 bopd net to Sea Dragon). Cumulative production from the NW Gemsa Concession has now exceeded 5.6 million barrels of 42 degree API Crude oil.
Sea Dragon has a 10% working interest in the NW Gemsa Concession with Vegas at 50%, as operator, and Circle Oil PLC with 40%.
Kom Ombo Concession
Geological, geophysical and engineering work and studies are continuing. The work includes a remapping of the Al Baraka field and exploratory prospects. This work will be complemented by the results of other geotechnical studies now underway to firm up locations for the two exploratory wells and AB-16, AB-17 and AB-18 development wells planned for the fourth quarter, 2011.
Work is underway currently on securing a drilling rig and ancillary services to be mobilized to Kom Ombo and begin operations during the fourth quarter. All tubular and supplies have already been ordered and should be available within the next two months.
Production from the Al Baraka field is approximately 800 bopd (400 bopd net to Sea Dragon).
Sea Dragon has a 50% working Interest and is a joint operator of the Kom Ombo Concession with Dana Gas owning the remaining 50%.
Commenting on the latest developments on the Company's operations in Egypt, Company Chairman and CEO Mr. Said Arrata stated, "We are very pleased with the progress made on drilling the water injection wells in our NW Gemsa Concession. We are looking forward to the commencement of the water flood project and the resulting increase in production. In Kom Ombo, preparation work for the fall drilling season is well underway."
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