Greka Drills Successful Well in Louisiana
Greka Energy Corporation has drilled to a total depth of 10,604' a Miocene test of the Haspel & Davis #1 (HD1) well in the Potash Field in Plaquemines Parish, Louisiana. The well, which was directionally drilled beneath a large salt overhang in inland waters utilizing The Parker Drilling Co. Rig 8B, 1000 HP barge, has been set to TD with 7 5/8" of production casing. This success proves the technical interpretation by the Company of the potential reservoirs in this field. The well is scheduled for a dual completion in both an oil and gas zone. Following the successful production of these initial zones, eight additional reservoirs are available for exploitation in the future.
The initial production rates of this well are expected to be 3MMCFPD of gas and 350BOPD of oil, and the well is currently scheduled to be on production in early September. Assuming current gas and oil prices, the well has a potential to add up to $6.5 million in annual revenue within the Company's E&P Americas division that reported $8.5 million in revenue for the first six months of 2001.
Greater than 360' of productive pay zones were encountered of which almost 160' is expected to be gas and 200' to be oil. Internal evaluations of the logs show that the Company has discovered almost 1.6MMBOE of which 70% is oil and 30% is gas. Net to the Company as to its 83% revenue interest, this equates to 1.3MMBOE with almost 930,000 barrels of oil and 2.3BCF of gas. The reserves from this single well are expected to increase the Company's yearend proven reserves by more than 10%. The HD1 well is the first of a series of new wells planned by the Company to exploit its large, undeveloped reserve base in the Potash Field.
During the course of drilling this well, the Company was forced to suspend operations due to Hurricane Barry's threatened presence. As a result of the potential risk, the Company pulled out of the well and resumed drilling operations after seven days. The warning of a second hurricane, coupled with the high reservoir pressures encountered in the deep twelve series sands, prompted the Company's decision to complete the well at 10,604'. This completion enabled the Company to protect and avail the asset value created and to pursue the deeper Bol and Tex W series at a later date or in a different well.
The Company is operator and owns a 100% working interest and a net revenue interest of 78-83% in approximately 3,000 acres in the Potash Field. The Potash Field is a salt dome in South Louisiana on the Mississippi River that is south of New Orleans. With the HD1 well's completion, the field has a total of 133 wells drilled to depths varying from 600' to 14,000' with 20 wells remaining.