CanArgo Completes Fraccing Ops at Manavi 12 Well

CanArgo Energy says that the acid fracturing stimulation of the Manavi 12 well in the Republic of Georgia had been successfully completed and the well has commenced flow back.

The acid fracturing stimulation of the Manavi 12 well in Georgia was conducted by Schlumberger on January 28, 2008, utilizing a multi-stage treatment comprising the pumping of a fracture initiating gel followed by hydrochloric acid stimulating fluids and diverter agents. This process was repeated a number of times for maximum efficiency. Approximately 2,700 barrels of treatment fluids were pumped at a maximum rate of up to 15 barrels per minute. An interval totaling 227 feet (69 meters) across the Cretaceous carbonate reservoir section in the well from 15,354 feet (4,680 meters) to 15,581 feet (4,749 meters) was isolated for the treatment. Pressure readings recorded during the operation indicate that fractures have been successfully created.

Following the fracturing operation, the well commenced flow back, without the need for artificial lift, with spent acid and chemicals being flowed to a surface pit. During the past 24 hours, it is estimated that a significant portion of the stimulation fluids have flowed back. The well is in the process of cleaning up with a current well head pressure (WHP) of 1,233 psi (84 atmospheres) and a return flow which includes significant oil and gas shows. The well is now connected to a separator with the gas being diverted to the flare pit where it is burning with a 30 to 35 foot (10 to 11 meter) flare while the liquids are delivered to tanks for more accurate measurement. As the percentage of oil and gas increases the WHP would also be expected to increase; consequently, it will be necessary to set a mechanical plug in the well in order to replace the 5" frac string with proper production grade 2 7/8" tubing. As well as being able to handle higher pressures, the smaller diameter production tubing will also assist the well to lift fluids and will thus allow a comprehensive production testing program of the well to be undertaken.

Vincent McDonnell, President and Chief Executive Officer commented, "We are extremely please to have successfully completed the acid fracturing stimulation of the Manavi 12 well. The initial flow back with increasing oil and gas shows is very encouraging, but the well needs to further clean up and flow back the remaining treatment fluids before we can properly assess the potential of this well. To facilitate in this process, we will need to install a suitable production string and this has been factored into the current completion design for the well. A mechanical plug will be run on coiled tubing by Schlumberger and set above the packer and below the level of the 5" work string which will then be disconnected and removed from the well to be replaced with 2 7/8" production tubing. No kill fluids will be introduced to the well which could cause potential damage to the reservoir. This operation will take about a week after which an extensive production testing program will commence. We will be providing regular updates as operations and testing continues at Manavi."

During the 40 hour period since the Manavi 12 well was put on production after fracture stimulating the well, the well has flowed back a total volume of liquids in excess of the treatment amount pumped into the formation during the fracturing operation. The well is currently flowing on a 5/16 inch (8 mm) choke with a well head pressure of 696 psi (47 atmospheres) at a rate of 78 barrels per hour (1,872 barrels per day) of fluids which includes 5 - 7% oil. The well continues to flow gas at an estimated rate of approximately 530,000 cubic feet (15 thousand cubic meters) per day, earlier having produced at double this rate.

While the fracture stimulation has demonstrated its effectiveness in opening the reservoir up to flow, the potential deliverability of the reservoir itself (maximum flow-back of 223 barrels per hour (5,352 barrels per day) observed) and the confirmation of oil and gas, it is not clear where the excess water is coming from. As part of the ongoing testing program, it is planned to run a production long in the well to determine the origin of this water.

Schlumberger is now preparing to run a mechanical plug in the well in preparation for changing out the 5" frac string for the 2 7/8" production tubing as planned. Once this operation is completed, the testing program will resume.