Exploration/Development Briefs

Jan. 23, 2012

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Albania

San Leon Energy PLC has identified several large oil and gas prospects across the many petroleum systems from new 2D and 3D seismic on the 4,208 sq km Durresi license in the southern Adriatic Sea offshore Albania.

Six source rock intervals have been identified with several potential oil reservoirs expected in Mesozoic carbonates and flysch as well as numerous gas reservoirs in the shallower Tertiary clastic deposits. The San Leon subsurface team continues to identify prospects across the license.

San Leon said the 840 sq km of 3D seismic has revealed several large structural oil and gas prospects and is revealing large stratigraphic potential. The possibility of using seismic amplitudes to greatly reduce exploratory risk further demonstrates the high potential of offshore Albania.

San Leon is interviewing potential partners and plans to drill the first of two exploratory wells in late 2012 or 2013. San Leon has a 75% participating interest in the block, and Beach Energy Ltd., Adelaide, has 25%.

Bahamas

Initial results from a 3D seismic survey on Bahamas blocks is encouraging, and technical studies and well planning represent the last phase of derisking in exploratory drilling preparation by March 2013, said Bahamas Petroleum Co. PLC.

Data quality is excellent, and data volumes have been received in both time and depth. Detailed interpretation is under way and will form the basis for well location selection, well design, and planning, the company said (see map, OGJ, July 13, 2009, p. 34).

Processing at this initial stage has been completed with 4 ms sampling and three tomographic velocity iterations. Further processing will be carried out in coming months with more detailed analysis and interpretation refined for specific targets, mapping of seismic facies, and attribute analysis.

Early stage interpretation of the new data confirmed and better defines the prospective structures seen on the previous 2D data.

The data provide encouragement regarding source maturity and fetch area. The 3D indicates the “basement” to be deeper than interpreted previously, implying a thicker, deeper Jurassic source rock section. Further, the interpretation indicates a uniform southwest dip under the Cretaceous platform indicating access to a large fetch area toward the Cuban mainland under the North Cuban basin.

Colombia

NCT EG Energy Group Colombia has gauged an oil discovery at the Mani-1 well on the Llanos 27 block in Colombia.

Canadian partners in the block said the well, the first in an exploratory program on the block, went to 10,850 ft TD.

Initial production rates were 1,510 b/d of fluid with a 32% water cut, equating to 1,025 b/d of 14° gravity oil. During the course of the following 57-hr test, rates improved to 2,310 b/d of fluid and a 16% water cut, or 1,940 b/d of 16° gravity oil from Upper Mirador at 9,482-86 ft. Extended testing is planned subject to ministerial approval expected to take as long as 4 weeks.

Quetzal Energy Ltd. and Brownstone Energy Inc., both of Toronto, are each paying 50% of the cost to drill and test the well to earn private participating interests of 45.275% before payout and 34.25% after payout.

Congo (former Zaire)

A $30 million work program will begin within weeks on Block III in Congo (former Zaire) near the border with Uganda, said SacOil Holdings Ltd., Bryanston, South Africa.

Total E&P RDC, operator with 60% interest, ran an airborne gravity and magnetic feasibility study and collected satellite imagery of the topography, physiography, and vegetation of the block in the past 6 months to provide a georeferenced numerical model for future operations.

An airborne gravity and magnetic survey and 2D seismic on the northern area outside Virunga National Park will be performed. A well may be drilled if promising structures are identified. SacOil is carried for the entire work program.

Iraq

Genel Energy PLC plans to acquire a 40% undivided interest in the Chia Surkh block in Iraq’s Kurdistan region from Longford Energy Inc., Calgary. Genel already owns a 20% interest in the block.

As part of the transaction Longford is to receive $68 million, of which $42 million cash will be paid to Longford and $26 million will be paid directly to the Kurdistan Regional Government in settlement of outstanding capacity building bonus payments and related interest due under the Chia Surkh block production sharing contract.

Longford acquired a 40% interest in the PSC in 2009. The 3-year first exploration term was set to expire on June 11. Under the minimum work program obligations, Longford has an outstanding commitment to drill two exploratory wells and to a $20 million minimum expenditure in the next 5 months that cannot be realistically fulfilled financially or operationally. This expected nonperformance, and the risk of contract expiration and cancellation, was a key consideration in the sale to Genel.

If Longford is unable to secure shareholder approval for the transaction by Mar. 1, it has agreed to assign its interest in the block back to the KRG without compensation. As consideration for this amendment, the Ministry of Natural Resources of the Kurdistan Region has indicated to Longford that it will support the transaction when submitted for final approval to the regional oil and gas council.

Kazakhstan

Aral Petroleum Capital LLP has spudded Well 306 in East Zhagabulak field in the North Caspian basin in Kazakhstan 1 mile south of Well 308, which is to be tested in February.

Aral Petroleum, held 40% by Caspian Energy Inc., Toronto, and 60% by Asia Sixth Energy, invested $34.31 million on the North Block in 2011 compared with the $25.84 million obliged to be spent, Caspian Energy said.

Well 308, cased to 4,775 m on the strength of electric log analysis, lies midway between producing wells 213 and 301, which are producing a combined 400 b/d of oil.

New rules issued by the Ministry of Oil and Gas require filing of a technology scheme to support each production license. Information obtained from drilling Well 306 is a final component of the technology scheme for East Zhagabulak, which when approved will validate the field’s full 25-year production period, Caspian Energy said.

Geological conditions for Well 306 are the same as for Well 308. Well 306 targets the same hydrocarbon-bearing horizons; KT-I at 3,360-3,879 m and KT-II at 4,070-4,700 m.

Aral is also drilling Well 316 in West Zhagabulak field with the aim of extending its production license over a larger area. Aral holds a 3-year exploration permit for the North Block, which contains several prospective areas, including East and West Zhagabulak.

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