MedOil: Completes Tunisia Scoping Review at Louza Permit

LONDON, Nov 08, 2005 (Dow Jones Commodities News via Comtex)

MedOil PLC Tuesday said that independent consultants, Merlin Energy Resources has completed a scoping review of the southern sector of the offshore Louza Permit, off Tunisia.

Dave Thomas, MedOil CEO, said: "We could not be more pleased with the results of Merlin's scoping review, which more than justifies our initial faith in the prospectivity of this licence, especially if the initial reserve estimates are ultimately justified for the M'Sela-1 discovery."

"We will do everything possible to follow Merlin's recommendations in a timely manner in order to define a drilling location, or locations, in the short term. This is naturally subject to the availability of suitable seismic vessels and, ultimately, drilling rigs."

"We have also commissioned a similar independent review of our Maltese acreage, and hope to have its findings and recommendations in the near future. We also continue to seek new acreage of equal quality to Tunisia to add to our portfolio."

The offshore Louza Prospecting Permit was awarded to MedOil plc and its partner, TGS-NOPEC, on May 30, 2005 for a two year period. MedOil has a 95% equity interest in the permit. MedOil has the exclusive right to convert the permit to an Exploration Licence, it said.

Since the May 2005 signing MedOil has, and still is, seeking to acquire all the technical data over the acreage to which it is entitled, it said.

"Due to the high workload currently experienced by the Tunisian State oil company, ETAP, in meeting MedOil's and other companies' requests for data, MedOil initially prioritised the collection of data to the southern sector of the permit. This is adjacent to the Isis oil field, situated immediately to the south of the permit, and includes the area around the M'Sela-1 oil discovery, drilled in 1995, within the Louza permit itself, where other structural leads had also been identified."

The results of the study conclude that the M'Sela-1 oil discovery, within the Upper Cretaceous Abiod volcanic section, has potentially attractive volumes (based on Monte Carlo simulation) of oil-in-place, and the oil is of good quality, it said.

The oil-in-place volumes range from 260 million barrels to 850 million barrels, with indicative recoverable reserves ranging from 48 million barrels to 225 million barrels, although these estimates are deemed indicative only until detailed reservoir engineering and further seismic studies can be conducted, it said.

Based on the current data the main source of production appears to come from fractures within the volcanic reservoir, although matrix porosity may also contribute to production, it said.

The M'Sela-1 also encountered a 130 ft. oil column in the Isis formation, but due to uncertainty of lateral continuity, potential reserves were not calculated, it said.

"The report also identifies four other exploration targets in the immediate vicinity of M'Sela-1, with the main reservoir targets being the Cretaceous Isis and Serdj formations. These structures have aggregate un-risked oil-in-place numbers ranging from 480 to 1,110 million barrels."

"The report recommends that MedOil conducts the 600 sq. km. 3-D seismic survey as originally planned, together with shipboard gravity and magnetic data, with the ultimate aim of identifying a suitable location for what is likely to be a horizontal well to appraise the M'Sela oil accumulation. The survey will also better define the four additional prospects, and assess their chance of commercial success."

Based on the results MedOil will now actively seek to shoot the recommended 3-D seismic program in 2006, with the aim of preparing for an appraisal well on the M'Sela discovery, it said.

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