Xtract announced the following operational update ahead of drilling in the Netherlands and Denmark.
Xtract has recently been advised by Chevron that the Noble Byron Welliver (300' ILC) is now on site at the P2-10 drilling location and the well has spudded. The rig move was delayed due to the weather conditions that prevailed throughout December 2011. The well program is expected to take up to 100 days.
The P2-10 appraisal well targets an existing gas discovery on the P2 block and one of the main objectives is to evaluate commercial hydrocarbon flow rates from an extended reach horizontal well within the Rotliegendes sandstone reservoir. Xtract has an overriding royalty arrangement of up to 5 percent of sales value from Chevron and TAQA's share of gas delivered into the Dutch National Transmission System and condensate delivered onshore.
As previously announced by Xtract, the Maersk Resolve is currently drilling on contract to Maersk Oil and Gas in Denmark. The Maersk Resolve (350' ILC) has experienced similar weather conditions as the Byron Welliver over the last few weeks which has impacted their well activities. Noreco has advised that the revised release date by Maersk Oil and Gas of the Maersk Resolve drilling rig is January 26, 2012.
The rig move will require a suitable weather window to undertake the short tow to the Luna location and subsequent positioning for drilling operations. The move is therefore dependent on weather conditions prevailing at the time of the rig release by Maersk. Xtract will provide a further update once it has been advised by Noreco that the well has spudded. The Luna drilling program is expected to take approximately one month in duration.
Peter Moir, Chief Executive of Xtract Energy, commented, "Despite the bad weather conditions in the North Sea over the last few weeks it is pleasing to know that the Noble Byron Welliver is now safely jacked up at the P2-10 well location and that drilling operations have commenced. We look forward to updating shareholders on progress in due course."
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