Nautical's Kraken Passes Test in North Sea

Nautical announced that the Kraken 9/02b-5Z horizontal well, located in UKCS North Sea Block 9/2b, has been successfully completed and tested using the Wilhunter (mid-water semisub).

The horizontal section of the well was drilled from 5,257 feet Measured Depth (MD) to a total depth of 7,260 feet MD, a horizontal displacement of 2,003 feet. Preliminary log evaluation indicates a calculated net oil pay of 1,598 feet, with average porosity of 38% and average oil saturation of 90%. The logs indicate a continuous reservoir interval with a maximum pay thickness along the horizontal section of 120 feet true vertical thickness.

The interval 5,257 - 6,724 feet MD was completed with sand screens and an openhole gravel pack. The estimated completed net pay was 1,287 feet which was then tested using an Electric Submersible Pump (ESP).

The well was put on production and cleaned-up at increasing flowrates for a total of 23 hours. A multi-rate test was then carried out including stable rates of 3,000 bbl/d for 12 hours and 4,100 bbl/d for 11.5 hours. The maximum stabilized rate achieved was 4,550 bbl/d. Production rates were constrained by the surface testing facilities. The productivity index at the end of the main flow period was 10 bbl/d/psi. Total oil produced during the test was 6,000 bbls. The water cut at the end of the main flow period was zero.

The oil gravity was 15º API. Downhole and surface oil samples were collected for analysis.

On completion of operations, the well will be suspended for future use in the development of the Kraken field.

Nautical has a 50% interest in Block 9/2b and is the operator. The other participants are First Oil and Gas Limited (30%) and Canamens Energy North Sea Limited (20%).

Steve Jenkins, Nautical's Chief Executive Officer, commented, "The reservoir quality, thickness and continuity that we encountered in the horizontal well are outstanding with an exceptional test flowrate and well productivity. We are delighted to be able to prove a commercial flow rate on an asset containing best estimate contingent resources of 83 MMboe net to Nautical.

Under normal production conditions this relatively short horizontal well is capable of producing 8000 bbl/d. These results augur very well for the longer horizontal sections we plan to drill in the development wells.

The results of the 9/02b-5 and -5Z wells give us great confidence as we move towards concept selection, scheduled for 1Q 2012, and on to project sanction in 3Q 2012."

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