Glenn Whiddon, CEO, stated: "Entry into the Dutch Sector of the North Sea, a prolific oil and gas province, will provide Grove with additional opportunities for early cash flow," said Glenn Whiddon, Groves' CEO. "In realizing our strategy we are enhancing our portfolio with projects in politically stable regions with existing infrastructure and a well-established market. All 4 blocks we have applied for contain existing oil discoveries. We believe that these oilfields can be profitable developments and will add substantial value to our company."
The P8 Block contains a proven undeveloped oil accumulation discovered by Mobil in 1982, with three wells drilled on structure. The wells flowed between 500 to 800 barrels of oil per day during testing from vertical wells. An independent reserve report is being prepared and will be issued upon the final granting of the production license.
Grove is evaluating a number of development scenarios, but its preferred option is currently a horizontal long reach extended well from the Horizon platform that is approximately 6 kilometers from the P8 discovery. The company said that a horizontal well should result in substantially higher flow rates than the original vertical test wells.
Grove noted that negotiations are underway with the operator of the adjacent Horizon Field regarding a joint development plan for the P8 discovery. Following the talks, the Dutch authorities will formally award the block to Grove.
Under Dutch law, EBN (the state participant) has the right to earn a 40-percent interest in P8 by funding its share of capital and operating costs. EBN has advised Grove that it plans to exercise its farm-in right.
The P8 Block accumulation is contained within the Lower Cretaceous Vlieland Sandstone reservoir that occurs at depths of approximately 1800 meters subsea. The water depth at P8 is approximately 33 meters and the discovery is approximately 6 kilometers northwest of Chevron's Horizon platform.
Also, during 2005, Grove applied for exploration licenses covering blocks F14, F18, and L1b. The company's applications and work program commitments are being reviewed as part of the license award process. The company said that the blocks contain stranded Jurassic oil discoveries encompassing a significant volume of oil in place. Historic well test results were inconclusive, and Grove will perform extensive re-assessment in terms of geological and geophysical studies on the existing vintage 3D data set and may drill further appraisal wells if required.
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