Success on the Horizon: EnCore Drills 2, Tests 2
EnCore Oil plc to provided an update on current and planned activities.
The 'Barbarossa' appraisal well (47/9c-5) commenced drilling in late February 2008. EnCore's costs are being carried for the initial vertical well and all testing and mobilization and demobilization of the rig. EnCore has contributed to the development and completion section of the well costs. The horizontal well section has been completed and the Company expects the results of the testing program shortly.
In May 2007, EnCore announced that its first operated well 'Cobra' (48/2c-5) tested at dry gas rate of 1.1 million standard cubic feet per day and established a total gas column greater than 350 feet. The results indicate a significant volume in place but likely requiring reservoir stimulation (a fraccing program) to make the discovery commercial. EnCore plans to initiate a feasibility study to examine the economic and technical potential for development of the field through a suitable well fracture stimulation program. This study is subject to co-venturer approval. In the event of a positive outcome from these studies, it is likely that further drilling activity will commence in late 2009.
In November 2007, EnCore announced that the 'Breagh' appraisal well (42/13-3) successfully tested dry gas at a maximum rate of 17.6 million standard cubic feet per day and established a total gas column of 460 feet. The well was suspended as a potential gas producer. Future activity will center on the appraisal of the East Breagh structure. The partnership plans to establish whether or not this is a contiguous or separate part of the current Breagh accumulation and if separate, whether or not it contains producible hydrocarbons. A second well on West Breagh will seek to establish if commercial flow rates can be achieved from a horizontal well bore. Further 3D seismic reprocessing has been completed in preparation for both appraisal wells, and drilling is expected to commence in late July using the Ensco 70 jack-up rig. Final timing will be subject to the requirements of the current drilling operations of Ensco 70.
The 'Bowstring East prospect is a light oil target on UKCS block 210/29a which is scheduled to start drilling in the 4th quarter of 2008. The semi-submersible rig Sedco 704 has been secured for this exploration drilling program. Final timing will be subject to the requirements on the current drilling operations for Sedco 704. The timetable for the drilling of 'Catcher' is not yet certain, although the site survey is currently being acquired and it is expected that it will be drilled in the second half of 2008 or Q1 2009. Timing is subject to the operator's, Oilexco Inc, ongoing drilling program in the Central North Sea. The 'Bennett' well is likely to be drilled in the first half of 2009, subject to specific rig availability.
The partnership with Old Head of Kinsale and Schull has recently acquired additional seismic data over both fields to better define both the full extent of the accumulations and to firm up additional prospectively adjacent to both discoveries. Finalization of the current sale process involving the Kinsale and Seven Heads fields by Marathon will be the key to progressing these developments in the near term.
EnCore is currently in discussions concerning the possible sale of EnCore Nederland B.V., whose principal asset is 10% of the Amstel field.
EnCore made a number of applications in the UKCS 25th License Round, both as operator and co-venturer. They expect awards to be made by BERR later in the year.
EnCore has been offered the award of two licenses 13th Landward Licensing Round. PEDL 240 is contiguous with existing licenses held with Northern Petroleum is on the Isle of Wight, and the second PEDL 253 is located in Lincolnshire around the area of Biscathorpe. More recently the group has received planning permission for the drilling of Markwells Wood, which is expected to be drilled in 2009. EnCore is currently reviewing its position on both onshore UK and France.
EnCore has received, and continues to receive expressions of interest in participating in the proposed Esmond and Gordon Gas Storage project. As part of the commercial arrangements between Star Energy ("Star", now a subsidiary of Petronas) and EnCore, Star will bear the cost of the drilling of a well in the Esmond Field. Star is currently in discussions with a third party for the use of a jack up rig and.
Alan Booth, EnCore's Chief Executive Officer said, "We look forward to the next six months which will be key in defining the success we can deliver to our shareholders. The results of the Esmond well will be of particular importance in this regard. We will be seeking to tailor our E&P portfolio to focus our capital on those projects that can have a material impact on our value, whilst disposing of, or reducing, our exposure to those activities which are less material. We will continue to seek all opportunities to return value back to our shareholders as appropriate, in whatever way is most effective and efficient."
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