Sidanco Starts Output from 1st Horizontal Well at VKE Field

SIDANCO's horizontal well No. 504 has become operational at the Verkhne-Kolik-Eganskoye field (the city of Raduzhny, the Khanty-Mansiysk Autonomous Area). After several days of operation, daily well output has exceeded 500,000 tons of oil. Well output is expected to be at least 600,000 tons per day after the well reaches its projected capacity.

SIDANCO Senior Vice President for Oil Production Dmitry Sokovets said that the Company plans to increase oil production by 11.5 percent in 2003, exceeding 18 million tons, by means of optimization (excluding the production of SIDANCO's joint ventures). He said that SIDANCO intends to continue drilling horizontal wells in the Khanty-Mansiysk Autonomous Area and put into operation ten horizontal wells at the Samotlorskoye and Verkhne-Kolik-Eganskoye fields.

Well No. 504 is the first operational horizontal well at SIDANCO-owned fields in Raduzhny. The companies Halliburton and Nizhnevartovskburneft were the drilling subcontractors. The horizontal sector of the well is 400 meters long. According to project manager Gennady Istomin, the well was designed with the involvement of specialists from SIDANCO's Izhevsk-based Scientific and Technical Center and was based on the method of hydrodynamic modeling.