Rocksource Updates on Exploration Drilling, '08 Exit Production
Rocksource has announced that the first exploration well on a new structure has reached total depth and has been logged. The logs indicate presence of hydrocarbons in several zones and casing has been set.
Completion of the well is consequently in progress, and production test results from the campaign will be announced in due time. The second exploration well was spudded on January 4th on a separate structure. Following the last exploration well the rig will return to drill the final production well of the current drilling program in the Drews Landing field.
The December 2008 production from Rocksource's US subsidiaries averaged 2,302 boepd (barrels of oil
equivalent per day). This compares to the reported November production of 2,260 boepd and 1,369 boepd
in December 2007. The average production for 2008 is 2,351 boepd which compares to 655 boepd in 2007
and the most recent 2008 forecast of 2,350 boepd.
The stated production numbers are based on metered daily production, and may thus differ slightly from the final production volumes that will be used for accounting purposes, due to changes in stock volumes etc.
Morian 10, the first development well in the 2008 campaign, started to deliver gas for sales late November and continues to produce at the expected level. Completion of the second development well has been somewhat delayed, but is currently being completed with sales expected in January after fracturing and co-mingling.
The oil and gas prices in the US have fallen significantly over the last months and are forecasted to remain at lower levels for some time. Jacob Sannes, CEO of Rocksource US, stated that, "We expect drilling and facilities cost to fall over the next few months, and this could offset some of the price reductions in the market. Rocksource will seek to phase in new developments during the year to maximize profitability and cash flow."
The target of increasing production to 5,000 boepd by 2010 remains intact unless overall market conditions deteriorate further.