Forest Oil Announces Successful Test Well

Forest Oil Corporation announced the completion of the fourth and final well in the 2001 drilling program in its Ibhubesi field offshore South Africa. Forest tested three zones in the A-Y1 well. These zones tested at an aggregate rate of 71.4 mmcf/d and 1,376 bbls/d of condensate or approximately 80 mmcfe/d, on a 80/64" choke. With the 2001 drilling program completed, the results can be summarized as follows:

  • Three out of the four wells drilled successfully tested gas production.
  • Total combined test rates, based on the successful wells drilled, including the initial discovery well A-K1, is 177 mmcf/d and 1,900 bbls/d of condensate or approximately 190 mmcfe/d.
  • Ten anomalies were targeted in the 2001 drilling program based on the 2000 3-D seismic program. All 10 anomalies proved to be high-quality reservoir sandstones, of which 8 were gas bearing.
  • Based on the close correlation of the 2-D seismic anomalies to the anomalies tested within the 3-D seismic area, a 7,600-square km trend extension to the north of the Ibhubesi area into Block 1 has been mapped. The seismic correlations tie to a well drilled in this block that tested natural gas at a rate of 33.1 mmcf/d.

Forest believes that sufficient gas reserves and deliverability exist to attract the development of a gas market in South Africa. Preliminary development and pipeline feasibility studies have been completed. Initial market studies have identified potential gas markets with takes ranging from 30-200 mmcf/d.

Forest has not yet booked any proved reserves associated with Ibhubesi. Proved reserves cannot be booked until a commercial agreement is signed that supports a profitable development of the field. The next step will be obtaining a third-party reserve verification followed by the negotiation of commercial agreements to sell and deliver gas. If gas supply contracts are successfully negotiated, gas deliveries could occur as early as 2004 via a subsea development scheme.

Forest Oil Corporation, the operator, holds a 70 percent working interest, along with its two partners, The Anschutz Overseas Corporation and Mvelaphanda Holdings.