Eurogas Corporation and Eurogas International Inc. have announced that the Ras El Besh 3 well ("REB3") on the Sfax Offshore Permit in Tunisia reached total depth of 2204 meters. Well logs and formation pressure tests identified the presence of oil in a 10 meter thick carbonate interval in the Reineche formation which was subsequently confirmed by down-hole sampling. The well is to be plugged back and sidetracked to contact 500 meters of horizontal pay section in an operation that is designed to further delineate the extent of the oil accumulation and provide flow rate data in the horizontal section of the hole.
The Reineche formation produces oil and gas from two fields north of the Sfax permit boundary that are owned by others. These fields are located approximately 15 kilometers from REB3 and within 5 kilometers of the northern boundary of the permit. This positive result at REB3 is especially important for future exploration on the Sfax permit as it is the first offshore Reineche oil discovery south of the Kerkennah Islands, and sets up the possibility of a new hydrocarbon trend in the north half of the permit.
The REB3 well also penetrated a deeper horizon that tested oil in the Ras El Besh 2 well. Logs confirm the presence of oil in the El Garia formation but it was believed that the well would not recover sufficient reserves to justify a completion. Further analyses will be carried out to determine a future course of action.
REB3 is the first well drilled under the Farmout Agreement announced on April 8, 2008 between Eurogas, Atlas Petroleum Exploration Worldwide, Ltd. and Delta Hydrocarbons B.V. In accordance with the agreement with Delta, the cost of the wells, as currently planned are borne by Delta as part of the consideration for the purchase of its 50% participation in the Sfax permit. After Delta has expended US $125 million, future costs will be shared Eurogas 22.5%, Atlas Petroleum Worldwide Exploration Ltd. (the Operator) 27.5%, and Delta 50%.
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