Mosaic Loses Fairymount 7 Well to Cave In

Mosaic Oil's run of successful drilling using new technologies has had a set back with the loss of its Fairymount No 7 well in Australia this past weekend.

Drilling with under-balanced horizontal tubing began on Saturday April 24th.

Mosaic reports that the drilling operation is being abandoned due to the collapse of the hole above the main target area. The drill encountered unexpected gravel which collapsed in the hole.

The drill pipe is to be cut above the blockage and the rig demobilized. The down-hole motor assembly will be left in the hole.

"We are certain reasonable oil reserve remain at this field. We had just encountered oil in the sand when the problems began at a shallower level," reports Dr Howard Brady, C.E.O. of Mosaic.

"The hole collapse was severe and unexpected. Our main aim now is to abandon this site as soon as possible to minimize time and costs. We had budgeted $600,000 for this operation but the cost will now be at least $800,000".

The Fairymount oilfield, 100 % owned by Mosaic, is some 80 kms south east of Mosaic's main Silver Springs operation.