Dover is continuing a detailed evaluation of the drill stem test results and the water samples obtained. In the light of regional data from previous drilling in the area, it is, preliminarily, believed that the possible causes for the lack of oil flow on stem tests are either:
This complete loss of circulation of drilling fluid while drilling caused further technical problems which prevented the investigation of the deeper primary sandstone targets of the Matullah and Nubia.
Dover Egypt I Joint Venture has decided to commence drilling of a second exploratory well prospect (EWA-1X) in the northern region of the area covered by the Concession Agreement, while the data at EWA-2X exploratory well are fully evaluated.
The Company is encouraged by the results of drilling at EWA-2X and anticipates that the proving of major oil entrapment in the structure within the Kareem and Thebes Formations significantly increases the chances of oil being trapped in the deeper sandstone reservoirs of the Matullah and, perhaps, the Nubia. Oil trapped at these greater depths would be expected to be lighter as a result of having been less exposed to biodegradation and the sandstone reservoirs at such greater depths would be expected to have better reservoir properties than the carbonates of the Kareem and Thebes.
Dover Egypt Joint Venture I expects to work with the Egyptian General Petroleum Corporation ("EGPC"), which is a party to the Concession Agreement, to obtain a future drill slot to return and drill the first exploratory target (EWA-2X) again, with a step-out well, for the purpose of investigating the Matullah and Nubia zones which have not been tested to date. At that time, Dover Egypt Joint Venture I expects to take the opportunity to core the oil trapped in the shallower Kareem and Thebes reservoirs and to investigate possible measures available to stimulate the reservoirs to determine if oil production is feasible.
The Senusret jackup is scheduled to jack down on January 6, 2003 and arrive at the second exploratory well EWA-1X location by Tuesday January 7, 2003. Drilling of the second exploratory well is expected to commence shortly after arrival at the EWA-1X and is scheduled to be completed in approximately 20 days, if no drilling problems are encountered.
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