Although the well encountered a thick sandstone formation as indicated by seismic, no hydrocarbons were discovered. Evaluation of the data gathered from this well, together with further seismic evaluation should provide a better understanding of any potential of the remaining structures on the Aquitaine Maritime Permit.
Vermilion Exploration, a wholly owned subsidiary of Verenex, holds a 22.5% interest in the Aquitaine Maritime Permit following the drilling of the Orca 1 well. Under a farmout deal negotiated with Vermilion and Bordeaux in the fourth quarter of 2006, VEX was carried on its share of drilling costs (up to a maximum of US $17 million (net)) for the first exploratory well on the Permit. VEX's capital exposure is estimated to be approximately Cdn. $5.2 million, based on an expected gross well cost of US $55 million.
Although the well was not successful, the farmout deal enabled Verenex to test a high potential exploration opportunity at a manageable cost. The result will not impact the Company's core exploration program in Libya, which continues to show excellent results.
Verenex is a Canada-based, international oil and gas exploration and production company with a world-class exploration portfolio in the Ghadames Basin in Libya and the Bay of Biscay offshore France.
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