The F1-47/02 new field wildcat exploration well was drilled to a depth of 10,300 feet and was tested at a maximum flow rate of 7,215 barrels of oil per day ("bopd") (gross) confirming its status as an oil discovery. The Libyan National Oil Corporation ("NOC") has also confirmed the well as an oil discovery.
In the past 14 months, Verenex has successfully drilled and cased six new field wildcat exploration wells and one appraisal well representing a 100% success rate. Four of these wells have been fully tested at a maximum aggregate flow rate in excess of 67,000 bopd (gross). Flow testing of a fifth well has recently been completed and results will be released following review and approval by the NOC. Flow tests at the sixth and seventh wells are expected to commence shortly and should be completed before the end of December 2007.
Flow Testing at the F1-47/02 Well in Area 47 in Libya:
Verenex completed extended flow testing at the F1-47/02 new field wildcat exploration well in early November utilizing the Ensign Drilling Rig 28. The well is located 8.2 kilometers northeast of the Company's A1-47/02 oil discovery and 3.1 kilometers northwest of the A1-NC3A oil discovery. An 18 foot interval at a depth of 9,842 feet in the Lower Acacus Formation was tested and yielded 45 degrees API gravity light sweet crude oil at a maximum measured flow rate, as restricted by test equipment capability, of approximately 7,215 bopd (gross) and natural gas at a rate of 6 million cubic feet per day ("mmcf/day") (gross) through a 96/64ths inch choke at a flowing wellhead pressure of 464 psia.
At the request of the NOC and consistent with earlier well test protocols, flow rates at the F1-47/02 well were also measured through a smaller and more restrictive choke size of 32/64ths inch. The choke-restricted oil and gas rates were 2,527 bopd and 2.4 mmcf/day, respectively, at a flowing wellhead pressure of 1,236 psia.
"F1-47/02 is our fourth consecutive oil discovery and further validates the exciting potential of Area 47", said Jim McFarland, President and CEO of Verenex Energy Inc. "The combined maximum test rate of our four announced oil discoveries is in excess of 67,000 bopd (gross) which is a solid measure of the outstanding productivity of the Acacus sandstone reservoirs in these wells. Three other wells have been cased and will be flow tested by year-end 2007. With this continued exploration success, we are well on our way to establishing the resource base and well density to support our plans to develop an initial phase of production of up to 50,000 bopd (gross) by the end of 2009," he said.
The F1-47/02 well has been suspended as a potential future oil production well.
The maximum combined measured flow test rates 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 New Field Wildcat Exploration Well Fully Tested:
Verenex has successfully completed flow tests at its new field wildcat exploration well D1-47/02 from 157 feet of perforations in three reservoir intervals, two in the Lower Acacus Formation and one in the Middle Acacus Formation.
The Company plans to release details of these flow tests on the D1-47/02 well once the results are reviewed and approved by the NOC, a process which is currently underway.
E1-47/02 New Field Wildcat Exploration Well to be Tested in December:
The KCA DEUTAG Service Rig 32 was released from the D1-47/02 well in late November and is currently being mobilized to the E1-47/02 new field wildcat exploration well to carry out flow tests on up to three reservoir intervals in the Lower Acacus Formation.
The E1-47/02 well is located 17.5 kilometers east of the Company's D1-47/02 well and was drilled and cased to a final depth of 9,639 feet after finding indications of hydrocarbons in the Lower Acacus Formation.
A2-47/02 Appraisal Well Cased in Preparation for Testing in December: Verenex has drilled and cased its first appraisal well A2-47/02, which is designed to appraise the Company's first oil discovery A1-47/02 located 5.1 kilometers to the east. The A2-47/02 well was drilled to a depth of 10,400 feet with the Company's second contracted drilling rig KCA DEUTAG T-19 and found indications of hydrocarbons in the Lower Acacus Formation.
Preparations are underway to flow test up to two reservoir intervals in the A2-47/02 well with the KCA DEUTAG T-19 drilling rig in December.
East 3D Seismic 90% Complete:
The acquisition phase of the Company's 1,225 square kilometer 3D seismic survey in the eastern part of Area 47 is approximately 90% complete and remains on track for a mid-December completion. The results are expected to mature and expand the Company's exploration prospect and lead inventory and provide support to the appraisal drilling and acreage retention strategy in this part of Area 47.
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