Verenex Energy currently has two drilling rigs under long term contract which enables the spudding of up to 11 to 12 wells during 2008. Good progress is being made in executing this program with four wells spudded over the January to April 2008 period.
Flow testing of the A1-47/04 NFW exploration well in the northern part of Area 47 is expected to commence in mid-May utilizing the KCA DEUTAG Service Rig 32 and be completed by mid-June. Both the Memouniat and Lower Acacus Formations will be tested. The A1 well is the third Verenex well to be drilled to the Memouniat Formation located below the primary exploration target in the Lower Acacus. Open-hole formation evaluation results in the Memouniat in the A1 well are the most encouraging results to date.
Drilling and formation evaluation operations at the B1-47/04 well in the northern part of Area 47 utilizing the Ensign 28 drilling rig are expected to be completed by late June.
An Intent to Drill application is currently being prepared for a third drill-ready prospect in the northern part of Area 47 that could be drilled subsequent to B1.
The Company expects to complete the drilling and formation evaluation program on the A4-47/02 appraisal well in the southern part of Area 47 by late May utilizing the KCA DEUTAG T-19 drilling rig. A4 is the third appraisal well on the A1 discovery.
Depending on the interpreted results from the recent south 2D seismic which surrounds the 2006 south 3D seismic survey, additional appraisal drilling may be advanced to delineate a potential extension to the A1 discovery outside the 3D seismic area. Processing and interpretation of selected 2D seismic lines are being fast-tracked for this purpose.
The Company is targeting to complete the full interpretation of results from the 2007 3D seismic program by the middle of 2008 and the 2008 2D program by the third quarter of 2008. The drillable prospect inventory in Area 47 will be updated based on this information to guide the sequencing of the drilling program.
A comprehensive third party assessment of contingent (discovered) and prospective (undiscovered) resources in Area 47 is nearing completion and it is anticipated that the report will be submitted to the NOC for their review in the second quarter of 2008.
The southern part of Area 47 is contemplated as the core for an initial production phase of up to 50,000 bopd (gross) by early 2010. Front End Engineering and Design ("FEED") for the proposed gathering lines, oil and gas export pipelines and processing facilities are progressing with two engineering firms. The results from the FEED work will be incorporated in a commerciality application planned for early in the third quarter of 2008. A workshop was held in late April with various departments of the NOC in Tripoli to outline the development planning underway and to seek their input and ideas to efficiently progress the regulatory process for the project.
The maximum combined measured flow rates in each of the tested wells in Libya contained in this press release 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.
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