Coastal Completes Songkhla Wells, Exits '08 with Production Target
Coastal has announced the successful completion of the Songkhla A-03 & A-07 wells.
The Company completed the Songkhla A-03 development well on December 11, 2008. Upon further evaluation of the well it was determined that the A-03 interval contains 152 feet (46 meters) of net pay with 20% porosity, rather than the initially reported 110 feet (34 meters) of net pay at 18% porosity. The well was completed in the Lower Oligocene reservoir of the Songkhla main structure. The A-03 well was completed and began a production test on December 11, 2008 and is currently producing approximately 5,000 barrels of oil per day with no water using an electric submersible pump ("ESP").
The Songkhla A-07 exploration well was completed on December 8, 2008. The A-07 well was drilled to a total measured depth of approximately 11,385 feet (3,470 meters) and logged approximately 136 feet (41 meters) of net pay with 16.5% porosity in the deeper Eocene reservoir. The entire interval has been tested and is currently producing approximately 1,100 barrels of oil per day with approximately 1,100 barrels of water per day. Prior to the rig demobilization, remedial completion work will be performed on the A-07 well to isolate the water production and to fully evaluate the well.
Following the completion of the A-03 and A-07 wells, the rig is being demobilized from its location. The Company plans to drive pilings to protect the well deck and the three wells. Once the pilings are set, a mobile offshore production unit (MOPU) will be installed. Production from the three Songkhla wells is expected to average 9,000 barrels of oil per day through Q1 2009, when permanent production facilities are expected to be installed.
The Company also announced that the Chairman, Frank Inouye, resigned effective December 12. Inouye has decided to step down for personal reasons. Inouye co-founded PetroWorld in 2005 which later merged with NuCoastal (Thailand) Limited to form Coastal Energy.
Randy Bartley, Chief Executive Officer of Coastal Energy commented, "The results of the A-03 well are as anticipated. Well performance is similar to that of the A-01 well, which has been producing approximately 4,500 barrels of oil per day since Nov. 3.
"Additionally, we continue to evaluate the results of the Songkhla A-07 well. Although initially the well is producing water, we feel confident that with remedial completion work we will be able to isolate the water production. We believe there is considerable potential in the Eocene reservoir, which we will continue to assess.
"The additional results of the A-03 and A-07 wells keep us on target to exit 2008 with average production of 9,000 barrels of oil per day from our Songkhla field. Going forward, we plan to build our cash balances and pursue further development of concession G5/43.
"Furthermore, I would like to thank Inouye for his service as the Company's Chairman. We wish him the best in his future endeavors. We are currently evaluating candidates as his successor and expect to announce a decision shortly."
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