TomCo Reports Production Back on Track at Heletz Field

TomCo Energy has provided the following activity update on its jointly held Heletz-Kokhav-Brur and Iris licenses in southern Israel.

Oil production has been underway on the Heletz-Kokhav-Brur license, in which TomCo has a 50% interest, since June 11, 2008 when the first well in the field was re-opened after 9 months shut-in. Two wells, H-1 and K-29 are now on production and have increased to an aggregate rate of around 60 bopd (30 bopd net to TomCo); a third well, K-27, is currently being pumped out and has started to produce some oil, and three further wells (H-25, H-37 and K-24) are subject to various ongoing mechanical repairs including the installation of a pump in one case. It is expected that all six wells will be back on production over the next few weeks. Over 1,300 barrels of oil have been produced since June 11, 2008.

New configuration of the separation equipment in the field has resulted in a significant reduction in the bottom sediment & water content of the oil to around 2% - much lower than that achieved under previous operators. New equipment is being sourced which it is hoped will bring this down further, to the benefit of the price received for the oil.

Moreover, an agreement has been reached with PAZ Oil Company Ltd, Operator of the nearby Ashdod refinery, to purchase Heletz oil shipments and sales will commence shortly.

Lapidoth Oil, Operator of the second license in the field (Iris), where TomCo has a 25% working interest, has identified 6 potential workover candidate wells, each of which could result in 10-20 bopd of new production. These proposals are being evaluated, but subject to an acceptable technical case some of this work could be initiated within the next few months. Evaluations for workovers on the Heletz-Kokav-Brur license are also ongoing. Proposals for new infill wells on both licenses are also being considered, but will be delayed pending the completion of current sub-surface studies, including seismic re-processing.

As previously announced, TRACS International Ltd has been engaged to undertake a comprehensive reserves study based on recent re-mapping of the field, including secondary recovery potential, and this work is now underway.

All existing seismic data over the field has been assessed for re-processing potential, and a series of re-processing trials have been initiated with a contractor in Denver, USA. Results of these trials will guide a wider re-processing effort in order to extract the maximum information from the existing data, while consideration is given to the acquisition of a 3D seismic survey.