The first prospect contains three target structures that contain millions of barrels of propane, butane and 49 degree API, high quality sweet crude. By utilizing industry standard formulae, the oil recovery from the first prospect is conservatively estimated to be in excess of 25 million barrels. The compositional analysis also indicates that the prospect has Raw Gas (C1, C2 and inert), Methane and Ethane recoverable potential in excess of 100 Billion cubic feet, taking the BOE (barrels of oil equivalent) to over 40 million barrels. Based upon this knowledge, the long-term development potential for this field is outstanding.
Mark Western, Tekoil's Chairman & CEO, stated, "We are extremely excited to have made the first major step towards our 2006 development plans. Tekoil has retained the services of specialist engineering firm Fekete Associates, who submitted the project description on our behalf. This has now been lodged with the appropriate authorities."
Mr. Western went on to say, "Existing 2D seismic data indicates that a 3D seismic survey of the size proposed is necessary to properly image the structure, which will enable us to utilize next-step 3D seismic inversion technology for the critical mapping of the porosity."
Tekoil has also retained Dallas-based firm dB.LLC Petroleum Advisors for the survey program design and data interpretation. Contractors for the survey execution have also been identified, and are expected to begin work by no later than May 15, 2006. This will enable rig mobilization during early summer, with the first production well being "spud" by September 01, 2006.
By utilizing a conservative figure of $35 per BOE (barrel of oil equivalent), management anticipates that the project will become self-funding during 2008, and with 7 wells completed, will produce revenues in excess of $120 million during that same year. By 2010, with 13 wells completed, management anticipates that the project will produce revenues in excess of $250 million.
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