The License provides for development from Chevron's P9 Horizon Platform and for participation of the Dutch State via EBN which will result in the following participation: Grove 48%; EBN 32%; Chevron 16% and Dutch State Mining 4%. All parties will fund the development in accordance with their working interest. The 15 year License covers an area of 26.17 sq. km.
Horizon West was discovered by Mobil in 1982. Three vertical wells were drilled on structure and test rates were up to 900 barrels of oil per day of 38.4 API quality crude. It is believed that the field contains approximately 50 - 70 million barrels of Stock Tank Oil Initially in Place ("STOIIP") and historical data suggest recoverable reserves of between 8 - 12% of STOIIP. The Horizon West field lies within the Lower Cretaceous Vlieland Sandstone reservoir at a depth of around 1,800 meters sub sea in approximately 33 meters of water.
An independent reserve report is being prepared pursuant to Canadian National Instrument 51-101 requirements for Reserve Reporting. This report will be lodged in December 2006.
Development will be managed by Chevron from its P9 Horizon Platform 6km to the east and will involve drilling a horizontal extended reach well, thereby reducing capital expenditures and bringing forward development and first production. The horizontal well will expose a much larger section of the reservoir which should result in substantially higher flow rates than achieved on the vertical well tests.
Agreement with Chevron, of a joint development and operating plan, including processing and transport tariffs, is well advanced.
Grove intends to arrange a loan facility to fund development and discussions have commenced with a number of financial institutions.
The Horizon West P8a Production License together with Exploration Blocks F14, F18 and L1b provides Grove with a material acreage position in the Dutch North Sea. After the recent sale of the majority of its UK North Sea interests, Grove has three core areas including development of the Abbadesse natural gas discovery onshore in Italy; the exploration programs on and offshore Tunisia and the Sicily Channel; and now the Dutch North Sea.
Dr. Wolfgang Zimmer, President of Grove, commented that "The grant of the Horizon West oil field is a significant milestone for Grove. This exceptional opportunity greatly enhances Grove's portfolio with a project near existing infrastructure and market. We believe that this oilfield can be a profitable development and will substantially increase Company and investor value."
A location map of the Horizon West oil field may be found at www.groveenergy.com and additional information on the Dutch North Sea may be found at http://dinolks01.nitg.tno.nl/dinoLks/NLOGPortal.jsp.
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