Serica Outlines Drilling Program
Serica Energy (TSX Venture & AIM: SQZ) provides an update on operational activity across its portfolio in its core regions of Western Europe and South East Asia.
UK North Sea:
The first appraisal well on the Columbus discovery on Block 23/16f spudded yesterday, at a step out location three kilometers north of the initial discovery well. Well 23/16f-12, in which Serica has a 50% interest, is being drilled with the SEDCO 704 drilling rig. The purpose of the well is to confirm most likely resource estimates, investigate further reserve upside and gather sufficient data to prepare a field development plan for submission in 2008.
As announced by Serica on December 20, 2006, the Columbus discovery well encountered a gross gas column of at least 125 feet in the Palaeocene Forties sandstone. A total of 85 feet of the reservoir was tested and the stabilized average production rates on a 56/64-inch choke during a five-hour period were 17.5 million cubic feet of gas per day and 1,060 barrels per day of 47.5 degrees API condensate.
The most likely net contingent resources of oil equivalent lying in Block 23/16f attributable to Serica's 50% interest are 10.8 million barrels, according to an independent report carried out by RPS Energy Limited on behalf of Serica following the drilling of the discovery well. Serica's partners in Block 23/16f are Endeavour Energy UK Limited (25%) and EOG Resources United Kingdom Limited (25%).
Serica is currently carrying out a 330-kilometer 2D seismic survey on its four onshore licenses in Aragon Province, in the northeastern part of the country. Serica has entered into a contract with Beach Petroleum Limited under which Serica will farm out a 25% interest in the licenses and will retain a 75% interest and operatorship.
The Global Santa Fe GSF 136 drilling rig has been contracted for the drilling of two wildcat, high impact, exploration wells on the Biliton PSC, located offshore in a virtually unexplored basin in the central Java Sea, commencing in Q4 2007. The previously contracted rig was damaged during operations for another company, but Serica moved quickly to contract the GSF 136 in its place and minimize the delay to its drilling program. Serica will operate the wells and retains a 45% interest following a farmout to Nations Petroleum Company Ltd., which will bear the majority of the costs of the drilling program.
In the Glagah-Kambuna PSC offshore North West Sumatra, the development program for the Kambuna gas/condensate field is well underway with first production expected at the end of 2008. The field wellhead support tower has been built and will be installed Q4 2007, following which two development wells will be drilled from the tower and the Kambuna No. 2 well will be recompleted. In addition, offshore and onshore pipeline route surveys will be carried out in preparation for the tender for pipeline supply and installation, whilst negotiations for the sale of the gas and condensate are expected to conclude shortly.
The acquisition of a 780 square kilometer 3D seismic survey has been completed in Block 06/94, Con Son Basin offshore Vietnam, in which Serica has a 33.3% interest. The block lies immediately south of the producing Lan Tay and Lan Do gas fields and immediately east of the Dua and Blackbird oil discoveries.
Serica's Chief Executive, Paul Ellis, commented:
"Serica is set for an extremely active period of exploration, appraisal and development drilling with operations on six wells in the UK North Sea and Indonesia over the next six months. In addition, seismic surveys are being conducted in Spain and Vietnam, whilst preparations for 2008 drilling in Norway and in the UK Southern Gas Basin are also underway.
"We look forward to the results of the Columbus appraisal well, which is being drilled at a significant step out location from the original discovery well and which, if successful, will confirm the potential of the field and put Serica in a position to prepare a field development plan."
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