The company noted the production testing on Snezhnaya has so far achieved a rate greater than 2,200 bopd from six wells out of the ultimate total of seven drilled to date. Imperial is bringing the seven wells into pilot production. In addition, it said that early production facilities are being completed and commissioned with oil currently being barged out for sale.
Imperial also reported that a new horizontal well, Maiskaya 394, has been drilled to address the prospective Jurassic Vasugan formation in the Block 70 of the Maiskaya Field in Tomsk. This well follows the “very encouraging” results from Maiskaya 393.
The company said that Maiskaya 394 was drilled successfully with a 311-meter horizontal section at a vertical depth of 2,664-2,668 meters. The well produced an initial rate of approximately 1,700 bopd of clean oil, 39 degrees API with no water. Imperial noted that further tests are taking place to identify the stabilized rate. It also pointed out that the rates achieved so far confirm the potential for horizontal wells to deliver significant quantities of oil from the Vasugan section of Maiskaya. Production from this section will be in addition to the delivery of oil from the principal oil producing horizon in this field being the Tumen, which was previously successfully tested in Maiskaya 393.
In terms of general developments, Imperial said that work continues to progress in relation to other appraisals/production and exploration wells. Also, in relations to a May 10, 2006, announcement, the company said that it plans to build two new pipelines: one will connect blocks 69 and 70 and the other will connect Block 77 to the Transneft system. Planning and preparation are progressing; negotiations are underway and approvals are being gathered.
Imperial also reported that it has relinquished five non-prospective licenses in the Tomsk region. The licensed areas, in blocks 95 and 96, contained no prospects identified by Imperial. The company said the relinquishment will save an estimated US$30 million in work program expenditure. The company will thus concentrate its resources on its other, highly prospective, acreage where a 12-well exploration program will address entirely new prospects during the remainder of this year and 2007. During the same period, the company expects to drill 40 new production/appraisal wells.
“Step by step, Imperial continues to make progress both in early production and gaining commendable drilling results from its so far identified fields,” said Peter Levine, Imperial’s chairman and chief executive. “In this, the excellent Maiskaya 394 is particularly notable. With some US$200 million of cash as a result of the recent placing, no debt and nil gearing, production, and significant exploration upside, we continue to view the future with great confidence, and remain on track to achieve our stated production target of 25,000 bopd by end 2008.”
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