Three new wells were drilled and completed in the first quarter of 2006 and have resulted in setting a new production record for the field of 7586 barrels of oil per day. Well 267 was drilled as a horizontal well with 212.5 meters of horizontal section and is producing at 715 barrels of oil per day with a 29% water cut. Well 122 was drilled as a horizontal well with 164 meters of horizontal section and is currently producing 535 barrels of oil per day on pump with no water cut. Well 141 was drilled as a deviated vertical well and is producing 137 barrels of oil with a 56% water cut. Tracer analysis indicated this water appears to be coming from a micro channel in the casing cement and remedial cementing operations are being considered.
The accelerated drilling program continues with the three existing rigs drilling ahead or preparing to spud development wells in the field. A fourth lightweight rig has also been mobilized to drill horizontal sidetracks from existing wells and is expected to commence operations shortly.
Valkyries President and CEO, Keith Hill commented, "We are very pleased to see the positive results of these wells and feel we are well down the road to achieving our production targets on this field. The use of 3D seismic and horizontal drilling technology has allowed PNG to increase production by almost 50% since the end of 2004."
Valkyries Petroleum Corp. is an upstream oil and gas company with exploration and producing interests in the Russia and the United States and is currently in advanced stages of evaluation and negotiation on several additional projects in Russia
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