The result is as expected and shows that our interpretation of the new shallow area in Block IV and the 3D seismic in Block III is correct. We will now drill another 9 shallow wells in the same area in Block IV and 6 wells in Block III during 2007, Nils N. Trulsvik, CEO of InterOil Exploration & Production, says.
The latest drilling in Block IV proved the presence of untested hydrocarbons in shallower levels (300-400m). As announced in the 4th quarter presentation InterOil have now started the drilling and has finished the two first shallow wells. The initial production of 140 bopd is in line with our expectations. The drilling cost for one shallow well is approximately US $350,000 and the payback time is estimated to 6 - 9 months.
The well in Block III was drilled as an infill production well. The well penetrated several intervals of oil-bearing sands and was drilled to a total depth of 6078 ft. The well is producing from the deepest reservoir interval whilst several of the shallower intervals are under evaluation for potential future production.
InterOil Exploration & Productions total production in Peru is today 2,300 bopd.
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