The An Nagyah #16 well was drilled horizontally to a total measured depth of 6,284 feet (2,080 meters) penetrating 2,392 feet (729 meters) of gross oil bearing Lam section. The interval was tested at a stabilized rate of 2,520 barrels per day of oil, 1.2 million cubic feet per day of natural gas and eight barrels of water per day flowing at 360 pounds per square inch tubing pressure on a 52/64 inch choke. Two to three additional horizontal development wells are planned to be drilled during the remainder of 2005.
With testing completed at the An Nagyah #16 well, the drilling rig is moving approximately two miles to the An Nagyah #17 location to drill and test a potential northwest extension of the Lam reservoir.
All of the An Nagyah field production is being transported via a recently completed 18 mile (28 km) pipeline to a nearby facility for processing and transportation to an export terminal. Completion of the pipeline and subsequent cessation of oil trucking operations in early July have reduced operating expenses by approximately $2.00 per net barrel of oil. The pipeline is currently transporting approximately 9,000 gross barrels of oil per day (4,700 net). Daily production is expected to increase to a level in excess of 10,000 gross barrels of oil (5,200 barrels net) by the end of the month.
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