Heritage Oil Limited, an independent upstream exploration and production company, announces that it has commenced drilling the Kingfisher-2 appraisal and exploration well in Block 3A, Uganda. This deviated well is being drilled from the lakeshore and is targeting multiple pay zones in the Kingfisher discovery located beneath Lake Albert. The well is being drilled to an anticipated depth of approximately 4,100 metres and is expected to take between 90 and 120 days to reach target depth. Heritage's operations in Uganda date back to 1997, at which date no other company had reportedly explored in the Albert Basin since the 1930s. Heritage is the Operator of Blocks 3A and 1 in Uganda.
The Kingfisher-2 well will appraise reservoir zones discovered by the Kingfisher-1 well, which was completed in 2007. Four intervals were tested successfully, resulting in an overall cumulative flow rate of approximately 13,900 bopd. The discovered oil is good quality, light (between 30 and 32 degrees API) and sweet with a low gas-oil ratio and some associated wax. These productive zones were secondary objectives, since the primary, deeper target was not reached for reasons related to rig performance. The Kingfisher-2 well is being drilled using the more capable Nabors 221 rig, and in addition to appraising the previous discoveries will explore the original, deeper primary objective.
A 325 sq km 3D seismic survey was carried out over the Kingfisher and neighbouring Pelican structures during the summer of 2007. Initial interpretation confirms that the Kingfisher structure has an aerial extent of approximately 45 sq km.
The Kingfisher-2 well site is located approximately one kilometre north east of the Kingfisher-1 well site. Kingfisher-2 will appraise the contingent resources previously discovered in the secondary zones in Kingfisher-1, which have been independently certified by RPS Energy as having a most likely gross volume of 118 million barrels of oil. The primary target has the potential to be much larger. The RPS Energy high case estimate (P10) of gross unrisked prospective resources for the primary objective is 698 million barrels of oil.
Tony Buckingham, CEO, stated, "We consider the Kingfisher-2 well in Block 3A and proposed Block 1 drilling programmes in Uganda as significant events in Heritage's 2008 work programme. There are plans for further drilling in 2009 targeting the Pelican prospect and other structures in Block 3A, with a rig capable of drilling on Lake Albert. The Pelican prospect is covered by the Kingfisher 3D seismic survey and the other structures have been identified on the new in-fill 2D seismic survey, that were both acquired in 2007. We look forward to successful results from Kingfisher-2."
Heritage plans to drill a number of other wells in Uganda this year. A one to two well programme is planned on the Kingfisher structure in Block 3A, and a two to three well programme is planned in Block 1 to the north. The Block 1 programme is expected to commence this summer and will target a number of relatively shallow structures characterised by amplitude anomalies on seismic data. Oil is known to have migrated into Block 1, as evidenced by the active oil seep at Paraa that is located within the south eastern part of the licence. This oil seep, together with the presence of the amplitude anomalies, supports the potential for hydrocarbons within the block.
Heritage has a 50% interest in Blocks 3A and 1, with Tullow Oil as partner for the remaining 50%.
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