The production test of the Al Roidhat 1 discovery commenced on March 15th when the well was cleaned-up, perforated and production testing initiated utilizing down hole equipment and pressure/temperature gauges obtained from Canada. The well will be flowed for a period of approximately five days at a constant rate and then shut-in for pressure buildup of approximately ten days. After the pressure build up is completed, the down-hole memory gauges will be removed and the data interpreted by a third party engineering firm to establish reserves and the results made public, sometime around the middle of April. Initial results are encouraging with the oil of pipeline spec and less than 1% water. Once the Al Roidhat test is completed the service rig and test equipment will be moved to the next test location.
The Al Roidhat 2 appraisal well spudded at 12:00 pm on March 20th. It is anticipated that the drilling program will last about twenty days. The objective of the second Al Roidhat well is to appraise the Qishn formation, as well as, additional geological features identified by seismic, including the Saar, Kohlan and the Granite Wash, in order to assess production potential. Site preparation has commenced for Al Roidhat 3, which will be spudded immediately following the completion of Al Roidhat 2.
Calvalley is also pleased to announce that it has entered into a financing agreement with a private fund designed to finance international oil and gas projects. The Company will receive $US 2.5 million, in unsecured project financing which is non-dilutionary from an equity perspective and which represents an excellent opportunity for Calvalley to finance approximately 20% of its 2004 drilling budget.
Lastly, the Company's 150 kilometer seismic program commenced on March 19th. The acquisition program is expected to take approximately two months, after which processing and interpretation of the seismic data will begin. The seismic program will be initiated in the vicinity of the 2002 Auqban reef discovery in order to better delineate the structure in advance of appraisal drilling later this year.
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