Volga Tests Negative at Karpenskiy Well

Volga Gas provided an update on testing operations on its Grafovskaya #1 ("G1") sub-salt exploration well in the Karpenskiy License Area ("KLA"), Russia.

As announced on April 29, 2010, the G1 well reached a total depth of 5,379 meters and a full string of casing was set. The drilling rig was demobilized and a lower cost workover rig mobilized to the well site, to undertake a series of tests on the well. The testing program involved perforation, acid treatment and flow testing in a sequence of four horizons starting from the deepest and working up to the shallowest.

The following tests have been undertaken:

  • Perforated interval: 5311-5328 meters (MD RT). "Dry" test.
  • Perforated interval: 5,210-5,235 meters (MD RT). Gas shows (60-80% methane, 10-30% ethane-propane-butane, no H2S tested) but sub-commercial.
  • Perforated interval: 4,935-4,948 meters (MD RT). Gas shows but sub-commercial.
  • Perforated interval: 4,173-4,193 meters (MD RT). Although logging data appeared to indicate the presence of oil, this interval was found to be water-bearing.

One further perforation is to be undertaken at a depth of 4,099-4111 meters (MD RT) from which a core sample containing oil was recovered during the drilling operation. This interval was previously subject to open hole testing and was found to be of low estimated permeability. A further update on this will be provided when operations are concluded.

Mikhail Ivanov, Chief Executive of Volga Gas commented, "It is clearly disappointing that the test results on Grafovskaya #1 have been negative. However, the drilling and testing operations have remained within budgeted cost; and we will use the data from this well to re-evaluate the prospectivity of the sub-salt within our license areas. In the short term Volga Gas will concentrate its exploration on the supra-salt horizons where we have had some success and where there remain further low to moderate risk growth opportunities. In addition we will continue to work towards delivering production from the Vostochny Makarovskoye gas/condensate field."