AED Reaches TD at Lempuyang-1 Well

AED advised that the exploration well Lempuyang-1 has reached final Total Depth (TD) at 3220m Measured Depth from Rotary Table (MDRT) (2817m True Vertical Depth (TVD)).

AED is optimistic with respect to the commerciality of the Lempuyang prospect and plans to proceed with a testing program for the Lempuyang-1 well. If the testing of the Lempuyang-1 well proves successful, AED will likely drill an appraisal well to further assess the Lempuyang prospect, with a view to moving to a full plan of development.

Drilling Update

The drilling and wire-line logging of the Lempuyang-1 exploration well is now complete and the 4.5" liner is being set in preparation for the testing of the well. The TD was set above the original proposed depth of 3500m MDRT because of drilling challenges associated with managing overpressures in the well. Overpressure was expected and accounted for in the original well design. However, several significant gas kicks encountered whilst drilling meant that the design needed to be modified to suit the conditions. AED is satisfied that the Red, Blue and Pink horizons have been fully penetrated and assessed in Lempuyang-1. However, only the upper section below the Green horizon was intersected. The Company believes that the Green horizon can be more thoroughly assessed by future appraisal drilling.

Due to technical issues and elevated risk, no pressure or samples were obtained in the key target intervals below 2840m MDRT. AED has been pleased throughout the drilling of the well, with gas and cuttings shows starting at 1430m MDRT and extending to the TD.

Lempuyang Prospect – Southern Development Area

The Lempuyang prospect comprises five independent fault blocks with up to five target horizons in each block (Figure 2). The 3D seismic (completed in May 2009) showed a number of seismic amplitude anomalies at the key target levels. Lempuyang-1 drilled fault block 2 because it allowed four of the five horizons to be intersected and provided the best opportunity to intersect a number of the seismic anomalies in a single well.

Hydrocarbons identified in Lempuyang-1 are also likely to be present through-out the Lempuyang prospect. Accordingly, a gas discovery in this well could have a significant impact upon the prospectivity of the Southern Development Area and in the future may underpin a commercial gas development. Subject to the results of any testing program, the joint venture is likely to undertake an appraisal program to assess the full potential of the Lempuyang prospect.

Testing Program

The Company on behalf of the Block L joint venture is likely to test a number of intervals over the Blue, Pink and Green sands. A test program and timing is currently being evaluated. The program will need to be carefully planned to give the best opportunity to test each zone and obtain flow to the surface and negate any formation damage attained during drilling in the overpressured part of the wellbore.
Block L

PetroleumBRUNEI manages and regulates Block L which covers an area of 2,253 sq. km in the Brunei-Muara District and parts of Tutong and Temburong Districts. The Block L joint venture comprises of AED South East Asia Limited (50%), Kulczyk Oil Brunei Limited (40%) and QAF Brunei Sdn Bhd (10%).