The Company's exploration program in Area 47 in Libya continues to meet or exceed expectations. To date, three wells have been drilled and have tested light sweet crude oil at high rates, a fourth is drilled and is preparing to test and a fifth is drilling at approximately 1,500 feet.
- B1-47/02 Oil Discovery Flows 23,800 Barrels of Oil per Day from Five Reservoir Intervals
Libyan National Oil Corporation carried out extended flow tests on four intervals in the Lower Acacus Formation at depths between 8,863 and 9,587 feet and one interval in the Middle Acacus Formation at a depth to the top of the perforations of 8,421 feet. These tests yielded a combined maximum measured flow rate, as restricted by test equipment capability, of approximately 23,800 barrels of oil per day (gross) from 312 feet of perforations through choke sizes on particular intervals ranging from 40/64ths to 96/64ths inch. Measured API gravity of the crude oil ranged from 37 to 42 degrees.
"B1-47/02 is another outstanding oil well which provides further validation for our optimism concerning the potential for Area 47", said Jim McFarland, President and CEO of Verenex Energy Inc. "Our first two wells have been declared as oil discoveries and have tested light sweet crude oil at high rates, our third well has also tested oil at high rates and our fourth well is preparing to test based on encouraging logging results. We have spudded our fifth well and are on track to achieve our target drilling program of six to seven exploration and appraisal wells in Area 47 in 2007, with a second drilling rig expected to be deployed to the program in September of this year", he said.
At the request of the NOC, flow rates on the B1-47/02 well were also measured through a smaller and more restrictive choke size of 32/64ths inch for their normalization purposes. These choke-restricted rates ranged between 1,128 and 2,414 barrels of oil per day (gross) on individual reservoir intervals, which on a combined basis totaled 9,150 barrels of oil per day from the five intervals tested.
The well has been suspended as a potential future oil production well.
- C1-47/02 Well Flows at Rates Equivalent to B1-47/02 from Five Reservoir Intervals
The Company drilled, cored, logged and cased its third new field wildcat exploration well C1-47/02 in 47 days, establishing a new pacesetter time curve. The well was drilled to a depth of 9,900 feet and found indications of multiple oil-bearing sandstone reservoirs in the Lower Acacus Formation and in the shallower Aouinet Ouenine Formation, a secondary exploration target, as confirmed by shows during drilling and logging results.
Flow tests on this well have been completed. The well flowed light sweet crude oil from 188 feet of perforations in five reservoir intervals, including four intervals in the Lower Acacus Formation and one interval in the Aouinet Ouenine Formation. The maximum combined measured flow rate at choke sizes up to 96/64ths inch was equivalent to the rate achieved in the second exploration well B1-47/02. Measured API gravity of the crude oil ranged from 41 to 44 degrees.
Additional flow test details will be released following NOC review and approval.
The maximum combined measured flow test rates in each of the wells described above are not necessarily indicative of the ultimate production rate and may be lower in any commercial development, which will be determined from reservoir engineering studies that constitute part of the appraisal and development planning activities currently underway.
D1-47/02 Well Cased in Preparation for Flow Testing
The Company completed an extensive logging, coring and formation evaluation program on its fourth new field wildcat exploration well D1-47/02. Based on positive formation evaluation results the well was cased to the final depth of 9,720 feet and the drilling rig released on July 12, 2007, 49 days from spud. The well, found indications of multiple oil-bearing sandstone reservoirs within the Lower Acacus Formation, the primary exploration target, and in the shallower Middle Acacus and Aouinet Ouenine Formations, both secondary exploration targets.
The KCA DEUTAG Service Rig 32 has been mobilized to the D1-47/02 well to test up to five intervals starting in late July. The aggregate net pay to be perforated in the D1-47/02 well is expected to be similar to the C1-47/02 well.
E1-47/02 Well Drilling at 1,500 Feet
The NOC approved the Company's fifth new field wildcat exploration well E1-47/02, which spudded on July 21, 2007 with Ensign Rig 28. The E1-47/02 well is up-dip from and 18 kilometers northeast of the D1-47/02 well and 20 kilometers southwest of AGOCO's oil and gas discovery well A1-NC04 announced by the NOC in March 2007. The E1-47/02 well will be drilled to a depth of approximately 9,550 feet and will test a separate four-way dip closed structure defined on high quality 2D seismic shot by Verenex in 2006. The primary exploration target is the Lower Acacus Formation.
- Offshore Aquila Exploration Permit Awarded
The French authorities have awarded the Aquila offshore exploration permit in the Bay of Biscay to Vermilion Exploration and Vermilion Rep. The permit is held 50% by VEX and 50% by VREP with VREP being the Operator. The permit has an initial term of three years and provides the right to explore an area of 709 square kilometers adjacent to the eastern boundary of the Aquitaine Maritime offshore exploration permit held by VEX and VREP. Terms of the award require that VEX and VREP reprocess the existing 3D seismic and undertake geological and geophysical studies on the permit.
The Aquila Permit is not included in the farm-out agreement on the Aquitaine Maritime permit.
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