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VAALCO has commenced drilling its development well in the Ebouri field and at its appraisal well (North Ebouri) in the Etame block. These two wells, together with the five other development and exploration wells planned over the coming months, expose VAALCO to over 50 million net barrels, or an 8-fold potential increase to the Company's current 6.2 million barrels of proved reserves.
For the development well in the Ebouri field, the Adriatic 6 came on hire to VAALCO on November 6 and was on location in mid-November. First oil production from this well is expected in January 2009. VAALCO continues to expect production at a rate sufficient to bring the Company's total production to approximately 25,000 barrels per day (bpd). The Company currently produces 20,500 bpd.
In the Etame block, the Pride Cabinda was on location in mid-November. In addition to the appraisal well (North Ebouri) where drilling has commenced for possible expansion of the Ebouri field, VAALCO plans two wells (North Etame and South East Etame) on newly mapped structures. The wells will be drilled back to back.
"We are pleased to have commenced drilling as expected and look forward to reporting continued progress on our drilling and exploration program," said Robert L. Gerry, III, Chairman and CEO.
Additional development and exploration wells planned over the coming months include:
- Two exploratory wells onshore Gabon in the Mutamba concession: VAALCO remains on schedule to commence drilling the first of these two exploratory wells in December 2008. Combined potential reserves for these wells are expected to be in excess of 30 million barrels. VAALCO has a 100% working interest in the onshore Mutamba block.
- One exploratory well in Angola: The Company expects to move forward on the planning for a well on Angola Block 5 during the third quarter of 2009 depending upon rig availability. The Company has recommended to the consortium a prospect with three objective zones, both above and below the salt layer on the block. Total potential from all three objectives is 150 million gross barrels. VAALCO has a 40% working interest in Block 5.
- Interest in North Sea: VAALCO has a 25% interest in a gas prospect on Block 48/25c in the British North Sea. The Company is participating with Century Exploration on the well, which is an offset to a former Shell gas discovery made in 1987. 3-D seismic data indicates the ability to get higher on the structure than the earlier well, increasing the potential reserves to 60 Bcf. VAALCO continues to expect that drilling will begin in the fourth quarter of 2008.