Exillon Highlights E&P Activities in Russia
Exillon Energy announced the successful completion of the EWS-15 well with an oil flow rate of 550 bbls/day from the Jurassic interval and confirmation of the presence of a reservoir in the Pre-Jurassic interval.
The EWS -15 well, which was spudded on December 29, 2009, was designed to test the northern extension to the EWS I field. The well flowed water-free oil naturally to the surface with a flow rate of 550 bbl/day on an 8 mm choke, and was drilled on a turn-key contract for a total consideration of US $0.975 million. The well reached target depth within the Jurassic P reservoir at 1827.5 - 1842.7m, confirming the presence of 15.2 m of net oil pay within the Jurassic. This is the thickest net oil pay encountered within the EWS I field to date. The average net oil pay within the Jurassic reservoir of the EWS I field, according to the Miller and Lents September 2009 reserves report is less than 5 m. The well confirmed the presence of a reservoir in the pre-Jurassic complex, though this interval has flowed water from the EWS-15 well.
The well was drilled directionally 1.4 km to the north from the existing EWS I field, and is now being connected to existing production facilities in the EWS I field.
On March 18, 2010, Exillon reached a combined production rate of 3,400 bbls/day from the Exillon TP and Exillon WS fields (Exillon TP 2,950 bbls/day; Exillon WS 450 bbls/day). Production at Exillon WS commenced upon signing an oil processing agreement with Aki Otir, a subsidiary of Russneft, on March 3, 2010.
Exillon WS fields continue to have additional behind-pipe production capacity of 2,800 bbls/day. Combined total production of 6,200 bbls/day is expected to commence in 3Q 2010, upon completion of the pipeline and infield infrastructure projects. The pipeline is being put in place to resolve the issue of seasonal production from the Exillon WS fields; the pipeline is currently under construction with 16 km out of 42 km already in place.
On March 24, 2010, the Company spudded Well 34 on EWS I field, which is one of the 6 additional wells in Exillon WS, which are expected to increase production significantly upon completion.
Acquisition of the North Kenyunskoe License
On February 25, 2010, the Company acquired the North Kenyunskoe license in a state auction.
The North Kenyunskoe License covers 119 km² and lies immediately to the East of the ETP IV field which is owned by the Group's Exillon TP subsidiary. The License is located in the Komi Republic, Timan Pechora, approximately 63 km from the town of Usinsk.
The prospects in the North Keinyunskoye block relate to sediments in the Lower Permian, Upper Devonian and the Lower Silurian Periods.
This license acquisition represents a significant addition to Exillon's portfolio. Exillon will develop the License using the Company's technical expertise to create further value for shareholders.
Update on the operational management structure
On March 15, 2010, Exillon moved its operational management center to Urai (Khanty-Mansiysk Autonomous Okrug, Western Siberia, Russian Federation), which is located close to its Exillon WS assets. The move will reduce operating costs and improve management oversight as the Group enters a new phase of development focused primarily on production.
This move will ensure that Exillon has the right management on the ground to deliver operationally as the Company focuses on increasing production at Exillon TP and Exillon WS.