TG World Energy Corp. reported the location for the third exploration well on the Tenere Block, Niger has been approved. The well, named Facai - 1, is expected to be drilled to a depth of 3,700 metres to test a new Cretaceous Play. The location is 100 kms north of the two 2007 wells drilled on the Tenere Block and is situated in the Northeast sector of the Tenere Rift Basin.
The Facai - 1 location was selected from a group of five advanced, drillable prospects developed by the Operator, CNPC International (Tenere) Ltd. ("CNPCIT" or the "Operator"). Following the drilling of the prior Tenere wells, Saha - 1 and Fachi West - 1 in May of 2007, CNPCIT, together with TG World, conducted an extensive eight month geological study to reassess Tenere Block exploration prospectivity. As a result of the study, two new exploration plays were developed, each believed to offer a higher chance of success than remains in the Tertiary reservoir play tested with the first two wells.
With the Facai - 1 well, CNPCIT and the Company intend to test the Cretaceous Donga Formation and syn-rift sandstones, equivalent to those encountered at the base of Saha-1, in a faulted anticlinal trap. The Fachi Formation shales (identified from drilling the Saha -1 and Fachi West - 1 wells) are anticipated to provide regional seal. Syn-rift lacustrine shales, located deeper in the section, and analogous to other Central African rifts, are postulated to provide the oil source rock.
CNPCIT has committed in 2008 to an aggressive three well back-to-back exploration drilling program and the acquisition of approximately 2,000 kms of 2-D seismic, subject to local security conditions. CNPCIT and the Company believe that logistical efficiencies on the large and remote Tenere Block make this the most cost-effective approach. Both the drilling rig and seismic crew used for the 2007 program are on site, having stood-down because of local security issues.
The seismic program is expected to target the two new play fairways, and is designed to mature additional prospects and to provide infill on play trends in the sparsely controlled sub-basin north of Facai-1. TG World has agreed to participate, at its 20% paying interest, in the acquisition of an initial 800 kms of new seismic. TG World has the option to participate in the balance of the seismic acquisition program once additional program details are finalized by the Operator. Field operations in support of the seismic program are scheduled to commence in March 2008, if the security situation allows.
Facai-1, the first well in the 2008 program, is scheduled to spud in May 2008 and will also be dependent upon the local security situation. With the second well in the 2008 program, CNPCIT and the Company expect to target a second new play developed on the Block. This is a shallower Cretaceous sand reservoir target located to the east of the deeper Cretaceous sand fairway to be tested by Facai-1. Additional seismic analysis is ongoing in an effort to further delineate the prospects. Management of the Company expects to make a decision concerning TG World participation in this second well following completion of that analysis; if a decision to participate is made, TG World will be required to pay 20% of the costs of the well. CNPCIT and the Company expect to select a location for the third well in the 2008 program on the basis of the results of the first two wells. Again, if a determination is made on behalf of the Company to participate in the third well, TG World will be required to pay 20% of the associated costs.
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