Solimar IDs Hydrocarbons at Guijarral Hills

Solimar announced that drilling operations at the 76-33 well at the Guijarral Hills project have encountered hydrocarbon indications in the Allison Sandstone which represents one of the upper reservoir targets in the well.

The Allison Sandstone was encountered at a depth and with a thickness very close to the Company’s pre-drill predictions. The sandstone composition is similar to that in the adjacent Guijarral Hills field in which it has been a productive oil reservoir.

When penetrating the zone gas shows increased from a background of 4-5 units to a peak of 61 units with wet gas compositions up to CH4. Blue white fluorescent from the bulk cutting samples were also observed. These hydrocarbon shows are indicative of the presence of a light oil or condensate in the sands. However the level of saturation of hydrocarbons or whether there is any commercial potential cannot be assessed from this preliminary data. The hydrocarbon potential of the zone will be further evaluated by wireline logs that are due to be run once all the objectives in the well have been penetrated and then if warranted a production testing program may be conducted.

As of Tuesday morning AEDT the 76-33 well was drilling ahead and is currently at 8,372 feet.

Background to 76-33

The 76-33 well is programmed to drill to a planned total depth of 10,400 feet. The drill program will evaluate 4 sandstone reservoir targets that were productive for oil in the Guijarral Hills field. The prospect being drilled is mapped based on well control as a potential undrained extension of the Guijarral Hills field which has historically produced over 50 million barrels of light oil.

Solimar is targeting a recoverable light oil resource of 5 million barrels with upside for 25 million barrels recoverable within the overall 2,560 acre project area.

The targeted sandstone reservoirs are predicted at depths between 7,000 and 10,200 feet. If successful up to 12 potential development well locations are indicated. Based on analysis of productive well histories in the Guijarral Hills field, pump assisted initial production rates of up to 400 barrels of high quality oil per well are targeted.

The 76-33 well is mostly being funded by a farmout to USA based Blast Energy services who are funding approximately 2/3rds of the cost of the well and are making a cash contribution towards past costs.