The Board of Mediterranean Oil & Gas Plc announced that, following the successful appraisal last month of the Ombrina Mare oil and gas discovery, the certified Proven plus Probable (P1 & P2) oil reserves are now 20 MMbbls, representing a 400% increase over the previous certification. This increase in reserves is attributable only to that section of the Company's 100% owned Ombrina Mare oil and gas field which was successfully appraised by the Ombrina Mare 2 well (OM2). The Ombrina Mare field is located in the Adriatic, offshore Italy.
Independent reserve engineers, Studio Ingegneria Mineraria (SIM) have certified an additional 15 MMbbls of P1 & P2 oil reserves relating only to that part of the field recently appraised by OM2 in addition to the 5 MMbbls previously certified by SIM (and as announced on 25 March 2008) and corresponding to the Ombrina Mare 1 discovery well. Proven plus Probable oil reserves for the Ombrina Mare Field have now increased to 20 MMbbls. The Company is currently focussed on a development plan to produce the 20 MMbbls of P1 & P2 oil reserves. The plan will provide for the simultaneous development of any additional oil and gas reserves delineated in further appraisal and step out drilling.
The Company's 100% owned exploration permit BR269GC covers the entire Ombrina Mare oil and gas field structure as well as a number of separate satellite prospects. The unappraised additional prospective and contingent oil resources from the Ombrina Mare field and from two of the satellite structures are now the subject of further study. In addition the Permit contains a further number of additional oil prospects and gas leads. Given that all of the wells drilled on the Permit to date have intercepted significant levels of hydrocarbons, the Company will now undertake a detailed assessment of all of the contingent and prospective oil and gas resources on the Permit.
The Company anticipates being able to provide the resources update on the whole Permit within the next two months.
The OM2 appraisal well encountered significant gas levels in the Pliocene gas sands above the carbonate oil field. These gas levels are associated with direct hydrocarbon indications such as seismic amplitude anomalies and/or amplitude versus offset effects of the seismic image. The gas sands had been partially tested by the OM1 well and were previously estimated as having contingent resources of 5 to 9 Bcf (best to high case). OM2 in fact recorded higher gas levels than OM1. The two runs of OM2 logs confirmed the presence of several gas sand levels in the Pliocene sands complex with shows ranging from 5% to 12% (C1) between 1500 and 1800m. The Company chose to complete the horizontal well as an oil producer and consequently it was technically not possible to test the gas component of the appraised discovery.
The Company is progressing geophysical studies to map all of the encountered gas sand levels and the associated seismic amplitude anomalies to allow the calculation and the certification of gas reserves. These studies should be completed by July 2008 and an independent reserve engineer will be engaged to undertake a gas reserves calculation and certification immediately afterwards.
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