Victoria Oil & Gas Completes Well 106 on West Medvezhye Project
Victoria Oil & Gas has received an updated resource statement prepared by DeGolyer and MacNaughton for its 100% owned West Medvezhye gas and condensate project in Russia following completion of drilling of appraisal Well 106.
- Confirmation of best estimate recoverable contingent and prospective hydrocarbon resource volumes of 1.1 billion barrels of oil equivalent by independent reserve auditors D&M and a five times increase in contingent gas resource volume to 322 billion cubic feet
- Drilling and logging of Well 106 completed with confirmation of hydrocarbon-bearing sands at intervals of 488 – 559 meters (Upper Cenonian) and 1,034 – 1,139 meters (Lower Cenonian) at Well 106
- Preliminary well testing results for Well 106 expected in May 2006
- Testing of Well 104-Bis to commence in late May 2006 with results expected in June 2006
Updated Resource Statement from D&M
Based on the data obtained from Well 106 and correlated with that from Well 104, D&M have issued an updated resource statement of the contingent and prospective resource volumes for the Project as of April 30, 2006.
The statement confirms total best estimate contingent and prospective hydrocarbon resource volumes of approximately 1.1 billion barrels of oil equivalent with increased gas volume and a minor decrease in condensate volume.
Importantly, the best estimate contingent resource volume has increased by over five times from 63 billion cubic feet to 322 billion cubic feet for the Danniella Accumulation. Contingent resources are resources which are known to exist, but need further evaluation to be reclassified as reserves.
Completion of Well 106
Appraisal Well 106, was drilled and successfully logged to a depth of 1,350 meters. Petrophysical log interpretations were generated by D&M, Baker Atlas and members of Victoria's technical team. All of the data was then reviewed by D&M.
The log data obtained from the well bore and subsequent petrophysical interpretation has yielded the following results:
- Interval 488 – 559 meters: Upper Cenonian horizon consisting of multiple gas-bearing sands, interpreted to be shingled
- Interval 1,034 – 1,139 meters: Lower Cenonian horizon consisting of single gas sand
Testing of the Upper Cenonian horizon is expected to commence in mid-May with preliminary well test results later in the month.
Following the completion of Well 106, the drilling rig has been moved back to the site of Well 104 and drilling of twin well, Well 104-Bis, has commenced. Well testing is expected to begin on the 594 – 650 meter interval of this well in late May with preliminary results anticipated in June. Fracturing operations at Well 104 have been delayed following problems in delivery of necessary equipment to the site.
The Company is expecting the equipment before the end of the May and fracturing is now anticipated in June.
Drilling is underway at Well 103 and has reached 1,080 meters. The first target horizon at around 3,200 meters is anticipated to be reached in June. A geological prognosis has identified up to six potential target horizons between depths of 3,200 meters and the planned target depth of 3,880 meters in the upper Jurassic horizon. Extensive coring will be carried out as part of the drilling program and target depth is expected to be reached in August 2006.
Speaking today, Managing Director William Kelleher said, "Well 106 met our primary objectives of confirming and indeed increasing initial resource estimates for the Project, as documented in the D&M report.
What is exciting is the reclassification of over a quarter of a TCF of prospective gas resource volume into contingent resources. With successful testing results, we expect that these contingent resource gas volumes can be reclassified into proven reserves."
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