Earlier this year, Interra announced that significant exploration prospects and leads had been identified in Myanmar. Interra and its 40% partner in Goldpetrol, Geopetrol Singu Inc., have subsequently conducted further analysis with respect to the existing producing areas together with the exploration prospects and leads and have decided to undertake a drilling program to test the most prospective of these.
Various prospective well locations have been identified and the initial two selected are a deep infill well (YGP-03) and a deep exploration well (Kubyu GP-01). A third well is currently being contemplated and will either be a deep infill well or an exploration well. The decision will in part depend on the results of the first two wells.
YGP-03 will be an infill well to be drilled in the northern portion of the Yenangyaung Field and is designed to produce oil from producing zones that will not be efficiently drained by surrounding wells during the contract period. The well is intended to be drilled to a depth of 8,900 feet and will use some of the latest directional drilling technology. The borehole will be directionally drilled in a structural down-dip direction in order to penetrate a greater effective length of the reservoirs, and should offer production improvement compared to a vertical well.
Kubyu GP-01 will be drilled to greater than 10,000 feet as a vertical exploration well in an undrilled area which is structurally bounded by faults. It will test the primary producing zones from the Chauk Field to the north and several zones that produce at the Yenangyaung Field to the south. Since this is structurally isolated from both fields it is expected to encounter "virgin" reservoir conditions and, if successful, would add significant reserves to Goldpetrol as previously reported in the release of 22 March 2006 describing the Reservoir Characterization and Prospect Assessment Study performed by Schlumberger Logelco Inc.
Due to the lack of available drilling rigs in Myanmar which are able to safely drill to the proposed target depths and drill directionally, a drilling rig will be sourced from outside the country. It is envisioned that the first of the three wells will spud in December 2006. This is dependent upon numerous factors including whether the rig will be imported into Myanmar as scheduled. The total cost of the three wells to be drilled is estimated to be in the order of US$8 million. Interra will be accountable for a 60% share of these costs and this will be funded from existing funds on hand.
Interra Resources Limited is a Singapore-listed company specializing in the upstream petroleum business. Our core focus is petroleum production, field development and low-risk exploration. We are positioning ourselves to be a leading regional producer of oil and gas.
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