Verenex Energy Inc. has provided an update of its operational activities in Libya.
AREA 47 EPSA Contract Area Amended
As previously announced on August 5, 2008, the Libyan National Oil Corporation (NOC) advised that certain areas around pre-existing oil discoveries at G1-NC02 and A1-NC3A located within or on the boundary of Block 2 in Area 47 are unavailable to Verenex for exploration and exploitation. These discovery wells were drilled by AGOCO, a wholly owned affiliate of the NOC, in 2003 and 1999, respectively.
Accordingly, the Company has been in discussions with the NOC to modify the contract area boundary in the Exploration and Production Sharing Agreement (EPSA) for Area 47 near these wells and the parties have agreed to exclude approximately 59 square kilometers or less than 1% from the original 6,182 square kilometer contract area. Resources associated with these pre-existing discoveries were not included in the recent DeGolyer and MacNaughton resource assessment.
An amendment to the EPSA to implement the change to the Area 47 boundary was formally executed in Tripoli on September 3, 2008 by Verenex and Medco International Ventures Limited executives and by the Chairman of the NOC.
Resolution of this issue has cleared the way to drill in adjacent areas within Area 47 and the NOC has approved drilling of the I1-47/02 well located approximately 6.5 kilometers south of the G1-NC02 oil discovery well.
I1-47/02 NFW Exploration Well Spudded
The I1-47/04 new field wildcat (NFW) exploration well (well No.16) in Block 2 was spudded on August 27, 2008 with KCA DEUTAG Rig T-19 and is expected to be drilled to a total depth of 10,850 feet in the Memouniat Formation. This is the first well to be drilled in the area covered by the Central 3D seismic survey carried out in 2006. The well is targeting the Lower Acacus Formation as a primary target. Drilling and formation evaluation results are expected by the middle of October 2008.
H1-47/02 NFW Exploration Well Drilling After Lost Circulation Delays
The H1-47/02 NFW exploration well (well No.15) in Block 2 was spudded in early August 2008 by Ensign Rig 28 and is currently drilling below 2,400 feet after experiencing delays due to lost circulation problems in the shallow section of the well. This lost circulation zone is now behind casing and drilling is proceeding towards the target depth of 10,500 feet. Drilling and formation evaluation results are expected to be available by the middle of October 2008.
C1-47/04 NFW Exploration Well Successfully Flow Tested
The C1-47/04 NFW exploration well (well No.13) was drilled and cased to a depth of 10,155 feet in the Memouniat Formation. The Company recently completed extended flow tests on the well from a total of 48 feet of perforations in two intervals, including one interval in the Memouniat Formation and one interval in the Lower Acacus Formation. The Company expects to release these results shortly, following review by the NOC and confirmation of well status.
This is the second well to be tested in Block 4 in the northern part of Area 47. The A1-47/04 well was the first tested and was announced as a Lower Acacus and Memouniat Formation oil discovery on July 28, 2008.
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