Subsequent Gas Chromatography tests were performed on the 6 bitumen extracts from the samples to investigate the characteristics of the oil. The detailed composition of the oils were determined and these results were correlated by EPRI with oils from different localities to predict the API (American Petroleum Institute) gravity of the EWA oils with the following results:
The API gravity predictions indicate a strong potential for the crude oils to be moveable, with all API ranges indicating the presence of commercial grade crude oils at all depths tested. To illustrate the possible practical significance of these findings, at current prices crude oil with an API of 35 sells for approximately $24 per barrel. Crude with an API of 18, will sell for about 20% less.
Based on the independent Schlumberger report, Dover Petroleum believes that crude oil in amounts on the order of 220 million barrels or greater may be discoverable in EWA-2X.
Moveability of the oil now appears likely to be primarily dependant upon the nature of the porosity and permeability of the formation. A previously announced independent report by Schlumberger Limited, a leading oil services firm, revealed substantial fracturing in the Thebes Formation (2,810-3,200 ft) which could provide the porosity and permeability needed for moveability. However, only drill stem testing will confirm if the hydrocarbons will be mobile and flow thereby indicating the potential to have a commercial discovery.
Dover Petroleum is continuing to seek written confirmation from the Egyptian General Petroleum Corporation (EGPC) for a drill date with the first available oil rig to conduct drill stem testing. Presently, there are three rigs with potentially available dates in the late fall or early winter.
No certain assurances can be provided that EWA-2X contains any moveable crude oil, or if such crude oil exists, that it can be recovered in a commercially viable manner. The cost of conducting such drill stem testing in EWA-2X is estimated to be approximately $2 million, and no assurance can be provided that such capital will be available to Dover Petroleum. In addition, if such crude oil exists, Dover Petroleum will require substantial additional capital in order to bring such oil into production, and no assurance can be provided that such capital will be available to Dover Petroleum.
Dover Petroleum Corp.'s wholly owned subsidiary, Dover Petroleum Egypt I Inc., has a 56.25% interest in Dover Egypt I Joint Venture, which is a party to an Option Agreement entitling that joint venture to acquire 100% of the Operator's interest in the East Wadi Araba Concession Agreement.
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