Vintage Drills Another Successful Well in Yemen

Vintage Petroleum reports that the An Nagyah #8 well in the Republic of Yemen has tested light (43 degree API) oil from the sub-salt Upper Lam formation. The well, an appraisal well defining the eastern limit of the An Nagyah structure, was drilled to continue the evaluation of the sub-salt Lam formation and is the fourth consecutive successful well drilled at the company's An Nagyah field this year.

The An Nagyah #8 well was drilled to a total depth of 3,966 feet (1,209 meters). Electric log analysis indicates a gross interval of 43 feet (13 meters) that is oil bearing in this well. A 34 foot (10 meter) interval in the Upper Lam formation was perforated between 3,345 and 3,379 feet (1,020 to 1,030 meters) and tested at a stabilized flow rate of approximately 607 barrels of light, water-free oil with a flowing tubing pressure of 63 pounds per square inch. The Upper Lam interval tested in the An Nagyah #8 correlates to the interval in the other An Nagyah wells, including the #7 well which was completed in late May and delineated the extension of the structure to the west. With the addition of the An Nagyah #7 and #8 wells, combined gross productive capacity from the five wells exceeds 3,800 barrels (1,976 net) of oil per day.

With testing complete at the An Nagyah #8 well, initial production is targeted for later this month. The rig is being moved to the next drilling location, the An Nagyah #9 which will be an infill well between the An Nagyah #4 and #6 wells and will spud this month.

The company recently completed an exploratory appraisal well (Harmel #2) near the Harmel #1 well, which was the discovery well drilled in 2000. The Harmel #2 was drilled to a depth of 2,808 feet (856 meters), and cores have been obtained to aid in the assessment of the potential for development of the supra-salt heavy oil reservoirs. Completion and testing of the well will commence following the conclusion of the core analysis and is targeted to happen during the late third quarter or early fourth quarter 2004.

Field production operations in Yemen were begun in late March when the An Nagyah #4 well was placed on production and the oil trucked 18 miles to a nearby pipeline facility for transportation to an export terminal. The company met its plan to increase daily production to 2,500 barrels gross (1,300 net) late in the second quarter 2004. Production is being trucked to the nearby facility until the permanent pipeline and processing facility is completed next year. Vintage will spend approximately $17 million during 2004 for design and construction of a pipeline and processing facility at An Nagyah, anticipated to be completed in the second quarter of 2005, which will allow the production of greater volumes and streamline transportation. The processing facility is being designed to process 10,000 gross (net 5,200) barrels of oil per day, with the potential to expand as additional capacity is warranted.