Total 3P (proved, probable plus possible) oil in place is estimated at 2.56 billion barrels, an increase over Sproule's June, 2003 estimate, which was 2.4 billion barrels. Total gross 3P recoverable reserves are in the order of 179 million barrels, a significant 8% increase over the June, 2003 estimate. Net present value (discounted at 10%) of the Company's interest in the 3P reserves is estimated at US $269 million, representing a 66% increase over the previously reported NPV of US $162 million. The Sproule evaluation is based on their June 1, 2004 Brent Oil Price Forecast less an adjustment of $5.95 per barrel for the blended Oudeh production. In the 3P case, the Oudeh oil price, weighted to production, averaged $20.67 per barrel over the remaining term of the contract.
It should be noted that the new reserves estimate does not include the three recently drilled successful horizontal wells, OD# 136, #137 and #138. Inclusion of these three new wells is expected to further enhance the reserves estimate at the next assessment.
Also, Sproule has identified a potential additional oil in place resource volume of 1.34 billion barrels in the western and central sectors of the Shiranish formation. Further development of these sectors, including 3D seismic, testing of existing suspended wells and appraisal drilling could facilitate conversion to 3P reserves.
The Company is currently in the process of acquiring 3D seismic data covering the entire Oudeh Field. Appraisal drilling in the western and central sectors and further development drilling throughout the rest of the field will commence upon processing and interpretation of the 3D data. The well workover program, as part of the overall development of the Oudeh Field, is ongoing and has been very successful to date, resulting in materially increased production levels. The Company looks forward to seeing further positive results from this program by year end. Gross field production is currently approximately 1,800 bopd. Several wells are temporarily shut-in while undergoing repairs. The latest horizontal well drilled, OD #138, is on production with an initial production test of 150 bopd. OD #138 is awaiting acid stimulation which is expected to significantly increase production rates from this well.
In addition, as previously reported, the Company is planning three exploration wells on its West Gharib project in Egypt. Gross field production from the Hana Field is approximately 1,750 bopd.
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