Delayed Drilling, Maintenance Reduces Rocksource's US Production
Rocksource announced that the January 2009 production from its US subsidiaries averaged 1,735 boepd (barrels of oil equivalent per
day). This compares to the December 2008 production of 2,320 boepd and 2,035 boepd in January 2008. 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.
The second exploration well Granbury 2, drilled on a separate structure, has reached total depth and casing has been set based on the logs indicating hydrocarbon presence. Completion of the well will be started during February, and test results will be announced in due course.
The decline in production is partly due to delays in current drilling campaign as previously reported, partly due to a higher counter pressure in the main pipeline from overall lower sales -- causing lower flow from our fields due to less pressure in our pipelines -- and partly due to necessary well maintenance. Rocksource has during January also replaced production tubing in one of the key production wells. Following the necessary downtime, the well is now back on stream and the rate is building up gradually.
One development well which will conclude the drilling campaign, consisting of three production wells and two explorations wells, was spud on 5 February. The well is expected to reach total depth in the beginning of March.
As previously reported the logs in the first exploration well Granbury 1 indicated presence of hydrocarbons in several zones. The first production test has been completed and preliminary result has been in the lower end of expectations. Further testing is needed to evaluate the full potential of this structure.
Both exploration wells are on new structures and will require a gas gathering system with processing facilities to be installed before the wells can start to produce for sales. Due to low gas prices, additional wells must be drilled before new facilities are economically viable and Rocksource will start planning for such new facilities based on the test results from the wells and development of the gas prices in 2009.
Rocksource is currently evaluating development options for the Granbury discoveries together with acquisition opportunities to secure further production growth. Target for average 2009 production will be set and communicated to the market as these options become more mature over the next weeks. The target of increasing production to 5,000 boepd by 2010 remains, but may be changed if prices do not