Aurelian Makes Headway in Europe
Aurelian provided the following operational update.
- Previously announced mechanical issues at Trzek-2, Siekierki Multi Fracced Horizontal Well ("MFHW"), restricts production to 3mmscf/d in 15 day stabilized flow rate test
- Result as expected after mechanical issues restrict flow in six of the ten well bore sleeves.
- Trzek-2 to be sidetracked and fracced in Q4 2011 at a cost of €6 million to achieve target stabilized flow rate of 8 mmscf/d and accelerate recovery of 16-28 bcf.
- A change in the completion methodology, to cemented liner and frac for the Trzek-2 sidetrack, removes the risk of similar mechanical issues recurring.
- Sidetrack already funded and potential of project unchanged at 346 bcf (net to Aurelian) recoverable.
- Second MFHW, Trzek-3, encounters 140 meter gas column in Rotliegendes reservoir
- Top reservoir encountered. Logs confirming good gas readings.
- Core taken from estimated 140 metre gas column representing a 40% increase compared with Trzek-2.
- Gas Processing Facility progressing well, first gas targeted H2 2012
- Contract to allow tie-in to national gas transmission system signed.
- Environmental and Planning approvals received.
- Construction approval expected H2 2011 with first gas targeted H2 2012.
- Krzesinki conventional exploration well to spud in Greater Siekierki Area Q3 2011
- Constructing site for well targeting 45-465 bcf (gross) prospective resources.
- Vertical well costing up to €10 million (gross) spudding Q3 2011.
- First Bieszczady well produces gas and condensate from potentially commercial zone above primary targets
- Short term drill stem test of 42 meter zone, flows indicates potentially commercial rates of condensate and gas. Flow from third test confirms zone's prospectivity.
- Current depth circa 3,850 meters. Primary targets between 4,000 and 4,800 meters.
- Processing and interpretation of second 300 km 2D seismic survey underway to support second well early 2012.
- Significant growth initiatives launched in both Carpathian and Tight Gas Core Areas
- Award of 100% of Poreba concession, resulting in the launch of a new 2,562 km2 operated, low cost Carpathian conventional gas business targeting 500-750 bcf (gross) of gas.
- Program commences with work over well in H2 2011 targeting resources of up to 20 bcf (gross). Up to 2mmscf/d initial production and cash flow targeted H2 2012.
- 2012 exploration well targeting prospect with resources of between 40-60 bcf .
- Tight Gas joint commercialization MOU signed with PGNiG targeting new tight gas blocks providing further growth opportunities outside of Siekierki.
- MOU signed with PGNiG and FX Energy to work together sharing data to enhance understanding of Rotliegendes tight gas blocks in Central Poland.
Rowen Bainbridge, Chief Executive commented, "We are making progress to understand the Siekierki reservoir and to develop production and cash-flow by the second half of 2012. Our Trzek-2 well has shown that horizontal wells can produce from tight sands such as Siekierki, and we now need to optimize the completion, frac design and execution to crystallize the potential of this project. In the Greater Siekierki area we are looking forward to the spudding of our Krzesinki, vertical well in H2 2011.
The first well in the Bieszczady concession in our Carpathian drilling program continues to look encouraging and we look forward to providing further updates on this in the coming months.
We are also pleased to have been awarded a 100% interest and operatorship in the Poreba concession, which together with our existing West Karpaty operated concession, enables us to launch our Carpathian conventional gas business targeting first gas and cash flow in H2 2012. The MOU's/alliances that we have signed with PGNiG and FX Energy are also an important step in helping us further grow our tight gas business outside of Siekierki."