Coastal Energy Company, an independent exploration and production company with assets in South-East Asia, announces the drilling results for the South Phu Horm 1 appraisal well.
South Phu Horm (SPH-1) Appraisal Well
The SPH-1 well was drilled to a total depth of approximately 3229 meters (-2,640 meters sub-sea) and encountered gas shows in both the Hua Hin Lat and Pha Nok Khao (PNK) formations. A full suite of logs were run and an open hole test conducted across the PNK primary target interval. The SPH-1 well tested gas at rates, after acid stimulation, that would not support commercial production from this location. The drilling, log and test data suggest the fracturing necessary to provide effective deliverability in the PNK carbonates is not present at the SPH-1 location and the well has been suspended pending further evaluation for a side track.
Sinphuhorm Field (Production Licenses EU1/E5N)
The Sinphuhorm gas field continues to produce above expectations at an average of 86.5 mmcf/d year to date, with the gas achieving an average price of $7.05 per mcf, ($5.96 per mcf average price for 2007). The Daily Contract Quantity was increased in March 2008 to 92 mmcf/d, and the field has demonstrated an ability to meet this expanded rate without any issues.
There is strong regional demand for gas in Northeast Thailand and the field partners firmly believe that there is capacity from the existing development to meet the increase in demand, and that the field is capable of producing in excess of 100 mmcf/d, through the existing wells and infrastructure.
Randy Bartley, Chief Executive Officer of Coastal commented, "The results of the South Phu Horm Well were non-commercial, but will have negligible effect on our latest published reserve report. The field continues to perform well and we plan to come back later in the year and drill additional exploration and appraisal wells on our onshore properties. The area has large gas potential that will be developed to meet the growing demand for energy in Thailand.Our focus continues to be on obtaining first oil production from our offshore Gulf of Thailand assets in the 4th quarter. All is on schedule to meet this target."
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