President Petroleum IDs Gas Shows at Northumberland Well
The Northumberland 2 exploration well has been drilled to a measured depth of 3,427 meters with the primary target reservoir, the Waarre sands extending even deeper beyond this point. The well was drilled to schedule and budget and extensive logging has now been completed, including a drill stem test over a 30 meter section.
Detailed results from the well
- While wire-line logs and the results of the drill stem test did not indicate movable hydrocarbons in commercial amounts the evidence points to considerable quantities of condensate and gas having migrated through the very thick Waarre sandstones.
- Although hydrocarbons have not been trapped at the well location because of thinner than forecast seal and a possible leak window to the next fault block, importantly the presence of a top seal to the Waarre sands being Belfast mudstone has been confirmed. No material Flaxman sands were identified in the well.
- The results of this well show evidence of hydrocarbons from core samples and logs, and the materially deeper than expected Waarre sands are very encouraging. This points to significantly greater potential for economic gas condensate and/or oil to be preserved, and in greater volumes than previously projected in many other structures within the PEL 82 licence, where fault movement is less or the seal thicker. Indeed structures in the north of the license have yet to be covered by a higher resolution 3D seismic. Prospective resources for the PEL 82 license remain similar to the previously estimated 430mmbbls of oil or 630Bcf of gas, due to the materially thicker sands.
- President have identified a number of potential hydrocarbon bearing structures and by way of example the first location to which President is applying the learnings so far obtained, albeit originally a relatively small structure, on current information has benefited from an over 50% increase in volumes of recoverable hydrocarbons.
- Accordingly as there has now been a substantial de-risking by the confirmation of charging of a potentially thick reservoir, President is now addressing the other risk as to sealing and detailed work will now be carried out to identify areas for further work both seismic and drilling.
Commenting on the announcement, Peter Levine, Chairman of President Petroleum Company Holdings BV said, "Interestingly it may be said that the value proposition of the PEL 82 license is greater now than before the drilling of the well, both in terms of increased potential and reduction of risk.
While Northumberland 2 has not made a commercial discovery, the clear identification of hydrocarbons in the system with a significantly thicker than expected reservoir sand, has given encouragement and impetus to move forward with further work on this license. Now that one of the two main questions has been de-risked, our attention is focused on identifying structures with a complete and effective seal and we move forward on this task with some optimism as much of the license has not yet been covered by high resolution seismic.
Now that the two legacy prospects have been drilled, and notwithstanding the important work now continuing on PEL 82, President clearly recognizes the priority of exponentially growing the Company and is very much focused on pursuing acquisition opportunities. President remains in a strong financial position with substantial current net cash balances, and continues to be well funded with the ongoing support of its major shareholder Levine Capital Management. Patient and careful progress is being made in various directions and further announcements will be made as soon as appropriate."