Solimar Continues to Encounter Hydrocarbon Indications at Guijarral Hills

Solimar announced that drilling operations at the 76-33 well at the Guijarral Hills project have continued to encounter hydrocarbon indications in the sandstone reservoir objectives of the well with each target sand encountered close to prediction.

The hydrocarbon shows data are preliminary in nature and have been recorded on the drill cuttings log (or Mudlog). The shows comprise elevated gas readings rising to 10 or more times the 4-5 unit background levels. The gas shows have compositions of CH1 thru to CH4. Some fluorescence and cut and petroliferous odour have also been recorded however evaluation of these types of shows are affected by compounds added to the mud to manage hole conditions which also fluoresce.

Gas peaks within the sandstones have been recorded as follows:

  • 8,077 feet (Allison Sandstone) Gas peak 61 units
  • 8,100 feet (Leda Sandstone) Gas peak 43 units
  • 9,067 feet (Secondary target) Gas Peak 50 units
  • 9,100 feet (Secondary target) Gas Peak 56 units

In order to manage hole conditions to drill down to the planned total depth of 10,400 feet the well is being drilled with a relatively heavy mudweight, currently 10.5 pounds per gallon mud. This exerts considerable over pressure on the normally pressured reservoir zones and has been expected to have a suppressing effect on shows that would be observed from the light hydrocarbons targeted in the prospect.

The hole remains in good condition and drilling operations are continuing with the total depth expected to be reached within the next week.

Once total depth has been reached a full suite of wireline logs will be run and, if warranted a flow test program conducted to determine whether there is commercial potential in the reservoirs drilled. As at 0900 Tuesday March 15, the well was at a depth of 9,678 feet and drilling ahead.

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 were 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.