Aladdin's Wishes for Profitable First Quarter Not Granted
Aladdin Oil & Gas Company ASA reported an operating loss of NOK 6.2 million in the first quarter of 2008, following the investments and operating activities on the company's Russian licenses. The company expects the existing fields in Orenburg to produce 500 to 700 bopd by the end of 2008.
"The first quarter was fairly operationally challenging," said CEO of Aladdin Oil & Gas Company, Espen Glende. "The workover activities on the test wells in Orenburg are temporary resulting in an unstable production. However, the company is comfortable with the current plan and will continue the well stimulation program, in addition to perform side track drilling from three existing wells."
Aladdin Oil & Gas Company had an operation loss of NOK 6.2 million on the first quarter of 2008, while total license investments amounted to NOK 14.6 million. After the closing of the quarter, Aladdin Oil & Gas Company completed a NOK 45 million share issue, which will be used to finance the company's capital expenditure program. The program includes three side track drillings and three workovers in Orenburg. In Uktha, the company's gas project is prioritized, in addition to the development of a new field development plan, the drilling of four new wells and the testing of five wells.
"We are satisfied with the development of our operating expenses," continued Glende. "We have low investments on the wells we are drilling and on our other production activities. The operating expenses and investments are expected on a similar level going forward."
During the first quarter, Aladdin Oil & Gas Company discovered a significant reef structure in Orenburg, potentially containing over 200 million barrels of oil. The recovery rate from similar structures is around 30 per cent. In addition, the company on May 13 entered into a letter of intent of acquiring 80 per cent of four licenses for USD 17.5 million. Different financial and strategic alternatives for the initiative are under evaluation.
"Based on the existing wells in Orenburg, the company expects a production in the range of 500 to 700 barrels per day," Glende said. "In addition, the company is working towards production on the gas field. Finally, the identified reef structure and the letter of intent, give Aladdin the opportunity of further utilizing the existing infrastructure and competence."
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