Toreador Increases Overall Reserve Estimates
"Toreador has a full calendar of activity, focusing on our $46.0 million exploration and development program," said G. Thomas Graves, President & CEO. "As we accelerate our project work in Turkey, France and Romania, we are excited about pursuing our vision for growth and creating value for our investors."
Toreador's current worldwide oil and gas production amounts to about 1,900 barrels of oil equivalent (BOE) per day. Toreador continues to project that production could climb to 3,000-4,500 BOE per day by late 2005.
Targeted Additions of Potential Reserves
Based on the potential success of upcoming projects, primarily in Turkey, France and Romania, the company believes that additions of potential reserves by December 31, 2007, could range from 49-87 MMBOE. In Turkey, the company anticipates that total potential reserve growth of 32-53 MMBOE could be generated from its projects, including the South Akcakoca sub-basin in the Black Sea -- 15-25 MMBOE; the Calgan permit -- 7-15 MMBOE; and the Boyabat re-entries on the Sinop permit -- 10-13 MMBOE. Toreador also expects additions of potential reserves could be derived by year-end 2007 from its work in other countries: France -- 10-15 MMBOE; Romania -- 6-15 MMBOE; and United States -- 1-4 MMBOE.
At December 31, 2004, Toreador recorded proved oil and gas reserves of 13.8 MMBOE. The company's production has an eight-year half life and a 50-year project life.
Turkey - Offshore
The areal extent of the Akcakoca and Ayazli prospective features in the western Black Sea's South Akcakoca sub-basin has increased 50%, according to Toreador's structural interpretation of a recent $5.3 million 190-square-kilometer 3D seismic survey that better defined this natural-gas play. The company now believes these features cover 9,000 acres rather than 6,000 acres as originally evaluated. The features' structural definition also has improved, indicating greater prospectivity in the area. Toreador's Ayazli-1 exploratory well discovered natural gas in September 2004. Testing of the Ayazli-1 indicated that gas was present from 2,122-3,171 feet in the Eocene-age Kusuri formation, the well's primary objective. On multiple tests combined flow rates on a 32/64-inch choke were about 15 million cubic feet (MMcf) of gas per day with an average flowing wellhead pressure of 824 pounds per square inch.
Initial development plans for the Akcakoca sub-basin include the drilling of three consecutive delineation wells. If successful, the wells will be completed and suspended as future producers. Toreador will have the option to drill up to five additional wells using the same rig that drilled the first three wells.
After Toreador completes the further analysis of the 3D seismic survey's velocity anomalies, the company intends to begin its offshore drilling program in late April with the spudding of the Akkaya-1 delineation well, which is on trend with and located about seven miles east of the Ayazli-1 well. The Akkaya-1 will be drilled by the Prometeu jackup rig supplied by Grup Servicii Petroliere (GSP) Romania, a Romanian drilling company. This is the same rig that drilled the Ayazli-1 well.
Toreador also is negotiating a contract for a second rig, most likely a semi-submersible, that would be capable of drilling in somewhat deeper waters in the Akcakoca area where water depths of slightly more than 300 feet are beyond the capabilities of the available jackup rig.
Phased development of the South Akcakoca sub-basin is planned with production beginning in the second half of 2006. Two modular caisson tripod systems, key components of the development scheme that will accommodate the first three wells, are under construction in Lafayette, Louisiana, or in transit for final assembly in Ismit, Turkey. The modular technology offers an economical, efficient approach to both drilling and production and are identical to off-the-shelf hardware used in the near-shore Gulf of Mexico. The tripod systems can accommodate up to three wells each.
In addition, a 2D high resolution survey is under way over nine potential drilling locations in the South Akcakoca sub-basin. The data will help the company better define these drilling locations and also will be used to insure the safety of drilling rig operations.
Toreador previously has reported that the South Akcakoca sub-basin holds potential reserves of about 350 billion cubic feet (Bcf) of natural gas based on available information. The company cannot be more definitive about the area's reserve level until delineation drilling and testing are completed. However, an initial producible reserve level of 80-100 Bcf of gas would justify production from as many as eight wells for a total gross production rate of 50-75 MMcf of gas per day. This would result in projected net annual gas sales, less operating costs, of $33.0-50.0 million to Toreador based on current gas prices in the Turkish market of $5.50-6.00 per thousand cubic feet.
Toreador is operator and holds a 36.75% working interest in this acreage.
Turkey - Onshore
In the onshore Sinop area northeast of Ankara, Toreador plans to re-enter the Boyabat-2 well in April. The company estimates the re-entry could identify 60-80 Bcf of potential field reserves. If the re-entry is successful, Toreador expects to offset the re-entry with a development well during the second half of 2005. Toreador operates and holds a 100% working interest in six Sinop permits.
Toreador is reprocessing seismic data on the Calgan-2 exploratory well, which encountered oil shows when it was drilled during the fourth quarter of 2004. Based on information processed to date from the seismic data, the company expects to re-enter the well and drill horizontally across the top of the structure during the second half of 2005. Toreador is operator and owns a 75% working interest in the Calgan-2 well.
The Calgan-2, a Cretaceous carbonate play, is testing a 5-10 million barrel prospect. If the well is successful, the company anticipates an initial production rate of about 250 barrels of oil per day (BOPD). Toreador is operator and owns a 75% working interest in the Calgan-2 well.
Steady development activity continues in the Cendere and Zeynel fields in south central Turkey. In 2004, a 3D survey was completed in the Cendere Field where Toreador holds a 19.6% working interest in most wells. The survey data has been processed and mapped, and currently is being evaluated. The company produces from the Cendere Field and from the nearby Zeynel Field where Toreador has an 8.5% royalty interest.
The Charmottes-108 well, Toreador's recently drilled horizontal development well in the Charmottes Field, flowed at a rate of 20 barrels of oil per hour with a surface flowing pressure of 50 pounds per square inch during an abbreviated, preliminary testing period, similar to the pressure measured in the successful Charmottes-109 well drilled last summer. Toreador has set casing and production tubing on the Charmottes-108 well, which encountered oil shows over 1,122 feet during drilling. Subsequently, the company has shut in the Charmottes-108 until completion of the Charmottes-110 well, spudded in mid-March. Then both wells will be tested. If the Charmottes-108 and -110 are successful, the company could drill another 2-4 horizontal wells in the field in late 2005 and in 2006.
Toreador is completing construction of expanded production facilities in the Charmottes Field. The expanded facilities, which the company expects to be fully operational in 2005, will accommodate the Charmottes-108 and -110 wells, as well as the Charmottes-109 well, the company's first successful horizontal development well in the field, and any future successful development wells. Temporary storage facilities, which can accommodate about 600 BOPD, will handle interim production from the Charmottes-108 and -110 wells. Production from the Charmottes-109 well currently is being handled by temporary facilities on a restricted basis.
Toreador's Charmottes Field is the only field in the Paris Basin capable of producing from three formations -- the Dogger, the Donnemarie and the Chaunoy. Toreador expects to drill at least one additional well in 2005 to exploit the reserves in the Charmottes Field's Triassic-age Donnemarie formation, which produces at a depth of about 8,600 feet, to further develop this potential. Two of the company's wells in this formation collectively have produced about 500,000 barrels of oil. LaRoche Petroleum Consultants, Ltd., Toreador's independent petroleum engineers, attributed 2.3 MMBOE of probable reserves to this formation at December 31, 2004.
Also in 2005, Toreador expects to drill several development wells in its four-field Neocomian complex where oil is produced from channel sands at about 1,800 feet. During the second half of the year, the company also plans to drill up to six exploratory wells on its 183,000-acre Courtenay permit adjacent to the Neocomian complex. A geochemical study that will supplement existing geophysical and subsurface data should be completed during the second quarter. The work will help to further identify potential well locations.
Toreador is operator and owns a 100% working interest in the Charmottes and Neocomian fields and Courtenay permit.
Toreador has re-entered two of six wells on its 1,325-acre Fauresti Block. The first well re-entry has been logged and suspended pending further testing, and the rig is being moved to the second re-entry. The company anticipates re-entering four additional wells and drilling up to two new development wells on the block this year.
Toreador also plans to re-enter a well on the Viperesti Block and will continue to gather geological and geophysical information, as well as reprocess seismic data, on both the Viperesti and Moinesti blocks. Toreador is operator of and has a 100% working interest in these Romanian concessions.
Toreador holds a 17% nonoperated working interest in the Cowherd-1
well in Marion County, Texas. The well has reached total depth, and
testing of the Travis Peak formation, the primary objective, is
imminent. Toreador's investment in the Cowherd-1 well, located on a
large acreage package, is indicative of the company's strategy to
participate in select domestic exploratory wells and pursue
nonoperated working-interest acquisition opportunities.
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