Horizon Tests, Re-Completes Stanley-1 Well in PNG


Horizon's Papua Projects
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Horizon Oil advises that it has obtained key results from its production test of the Stanley-1 well in PRL 4, Western Province, Papua New Guinea. The Company holds a 100% interest in the licence.

Workover operations began on June 20, 2008, utilising EasternWell rig 4. Cement plugs that were set when the well was cased and suspended in 1999 were drilled out and the well was equipped for production. The well flowed at rates up to 25 million cubic feet of gas per day (mmcfd) on initial clean-up flow. The well was subsequently turned to a test separator unit and stable production rates of gas at 9.3 mmcfd and associated condensate at a yield of 35 barrels / million cubic feet of gas, with no formation water, were recorded. These rates were limited by the capacity of the test unit. Preliminary interpretation of the results indicates reservoir performance and condensate yield at the upper end of expectations.

The current operation is obtaining high pressure fluid samples, which will be used to design processing facilities. After that a series of flow tests and shut-ins will be conducted over a 6 day period to help determine reservoir continuity. The drilling rig is not required for this phase and has been released.

Recompletion of the Stanley-1 well and the subsequent fluid sampling and production test are necessary steps in the evaluation of the resource for the purposes of supplying gas to PNG Sustainable Energy Limited (PNG SEL). PNG SEL intends to utilise the gas to supply power to a number of clients in Western Province, primarily Ok Tedi Mining Limited, beginning mid-2009.

The next steps for Horizon Oil will be design and construction of a processing plant and drilling of the Stanley-2 supply well in the first half of 2009. The Stanley-1 well will serve as a back-up supply well and an injector well for any gas produced that is surplus to PNG SEL’s requirements.

Horizon Oil advised on June 19, 2008 that it had acquired additional interests in both PRL 4 and PRL 5, increasing its interest in PRL 4 to the current 100% and in PRL 5 to 29.50 – 49.65%. PRL 5 contains the Elevala and Ketu gas / condensate discoveries. The range in the PRL 5 ownership was related to standard pre-emptive rights of a co-venturer. The Company has recently been advised that the co-venturer does not wish to exercise its pre-emptive rights and consequently Horizon Oil’s interest in PRL 5 is now confirmed at 49.65%.

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