The operator of Block 26 has taken assignment of an existing contract for a drilling rig owned and operated by the Croatian drilling contractor Crosco, who are part of the INA Group of Croatia. Commencing in early May 2006, this rig will be used to drill an exploration well to evaluate the Souedieh North prospect. There is an option to drill another well, back-to-back, with this rig under the assignment. The Souedieh North prospect is located in the northeast region of Block 26. A vertical well will be drilled to an approximate depth of 7,200 feet with the primary objective being Cretaceous reservoirs similar to those producing in the adjacent Souedieh and Karachok oil fields.
The operator has also signed a definitive agreement with MB Drilling Overseas Limited, part of MB Petroleum Services LLC of the Middle East. The agreement is for the drilling of two wells, with an option to drill one further well. This larger rig will be used to drill to the deeper Palaeozoic prospects identified in Block 26. The first well shall be Tigris No.1 on the Tigris structure located in the northeast region of the Block. A vertical well, expected to spud in August 2006, will be drilled to a depth of almost 15,000 feet with the primary objectives being a series of Palaeozoic (Carboniferous and Devonian) sandstone reservoirs. The Tigris structure is directly underlying the Souedieh oil field (the largest known oil field in Syria), where oil is produced from the shallower Cretaceous reservoirs. Wireline log evaluation of an existing well on the structure drilled some years ago has identified pay zones within the objective reservoirs, and the Tigris No.1 well is designed to evaluate these reservoirs and appraise this potential hydrocarbon accumulation.
On January 30, 2006 Emerald announced the results of the Tigris reserves study by Ryder Scott Company, L.P. (Ryder Scott), an independent petroleum engineering firm. Based on data currently available, the Ryder Scott report concludes that there are nine potentially productive zones contained within Palaeozoic age reservoirs penetrated by the existing well bore. As the available data is insufficient to determine the expected hydrocarbon fluid contained within the structure, Ryder Scott developed two cases for this evaluation: a gas case and an oil case.
If Tigris is a natural gas accumulation, Ryder Scott has classified 442 bcf as Probable Reserves, a further 442 bcf as Possible Reserves, and a further 3447 bcf as a Prospective Resource. In summary, total hydrocarbon potential for Probable and Possible Reserves and Prospective Resource in this case is 4330 bcf, equivalent to 722 mmboe.
If Tigris is an oil accumulation, Ryder Scott has classified 104 mmbbl of oil and 64 bcf of gas as Possible Reserves and a further 408 mmbbl of oil and 245 bcf of gas as Prospective Resource. In summary, total hydrocarbon potential for Possible Reserve and Prospective Resource in this case is 512 mmbbl and 308 bcf, equivalent to 563 mmboe.
Emerald holds a 50% working interest in the contract for exploration and production for Block 26, Syria, through SNG Overseas Ltd, a 100% owned subsidiary. The operator of Block 26 and holder of the remaining 50% is Gulfsands Petroleum Plc.
Alastair Beardsall, Emerald's Chairman, said:
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