Exploration/Development Briefs

Sept. 12, 2011

Argentina

The CorS X-1 exploratory well in Argentina's Neuquen basin is being cased to 14,760 ft after taking full diameter vertical cores and sidewall cores in the Vaca Muerta shale and other formations, said Calgary-based Madalena Ventures Inc. Apache Energia Argentina SRL drilled the well on the 123,500-acre Cortadera block, in which Madalena has 40% interest.

Vaca Muerta shale is 2,323 ft thick. Apache obtained sidewall cores in the Quintuco formation, which is 2,024 ft thick overlying the Vaca Muerta. The well also cut 676 ft of Mulichinco formation in which sidewall cores were taken in areas of elevated hydrocarbon shows. Sidewall cores were also taken in the Agrio formation overlying the Mulichinco.

Laboratory analysis will be carried out on the drill cuttings, sidewall cores, and full diameter vertical cores and integrated with electrical and mud log data to design a testing and stimulation program expected to start in October. Magdalena said the information will assist in its exploration of its 90% owned Curamhuele block 30 km north and on trend with Cortadera.

Congo-Brazzaville

SOCO International has spudded the Mindou Marine-1 exploratory well on the Marine XI block off Congo-Brazzaville.

The ENSCO 5003 semisubmersible is to drill to 3,400 m below mean sea level targeting the presalt Toca carbonate reservoir in a combination structural-stratigraphic trap. The well is the first of a two to three-well program on the Marine XI and XIV blocks and will fulfill the Phase 2 drilling commitment on the XI block.

Indonesia

Risco Energy Pte. Ltd., Singapore, will buy Salamander Energy PLC's 5% interests in the Offshore Northwest Java and Southeast Sumatra PSCs in Indonesia for $55 million plus $1.3 million in working capital adjustments. A further deferred cash consideration is payable upon the buyer's participation in any extension of the ONWJ PSC.

Production attributable to the net 5% interests averaged 6,000 boe/d in the first half of 2011, and net proved and probable reserves are 13 million boe at midyear 2011. The blocks came into production in 1971 and are on long-term decline. PT Pertamina Hulu Energi operates ONWJ, and CNOOC Ltd. operates SES Ltd.

Italy

Italy's economics ministry finalized the award to Canoel International Energy Ltd., Calgary, of the Torrente Vulgano and Canaldente gas field licenses formerly produced by Eni.

Torrente Vulgano is in the Puglia region and Canaldente is in the Basilicata region, both in southern Italy. Both are connected to the national gas distribution grid.

Torrente Vulgano averaged 279,000 scfd in 1997-2000, and Canoel expects to resume production in 9 months at an undetermined rate. Canaldente, also to be placed on production, appears to be a good candidate for gas storage upon depletion.

Gas prices in Italy are roughly three times those in North America, Canoel pointed out.

Liberia

Anadarko Petroleum Corp. is moving ahead with its 2011-12 exploratory drilling program off Liberia, Sierra Leone, and Ivory Coast.

The company spud the Montserrado prospect, the first deepwater well off Liberia, in late July. Montserrado is 53 miles southeast of Anadarko's Mercury-1 discovery well off Sierra Leone.

After Montserrado, Anadarko will move the rig to Sierra Leone to drill the Jupiter-1 exploratory well followed by an appraisal well near the Mercury discovery.

Anadarko said long lead items are in place and letters of intent have been signed for two rig slots off Ivory Coast, where it plans to begin drilling late this year or early in 2012 at the Kosrou-1X and Paon-1 exploratory wells.

Netherlands

Petro Ventures Netherlands BV, subsidiary of a private Western Australia-based explorer, has joined a group led by a unit of Sterling Resources Ltd., Calgary, that plans to drill an appraisal well in the Netherlands North Sea in the fourth quarter of 2011.

Subject to approvals, Petro Ventures will take half of Sterling's 50% interest in the shallow parts of the F14, F16, F17a, and F18 blocks in the F-Quad and the L01b block in the L-Quad sector. The blocks, 80 km offshore in 45 m of water, total 1,550 sq km and contain four oil discoveries. The appraisal well is set for Block F17.

Sterling remains operator with 25%. Other participants are Energie Beheer Nederland BV 40% and Enquest PLC's Grove Energy Ltd. unit 10%.

Poland

3Legs Resources PLC said it completed a multistage hydraulic frac treatment and lit a flare as it began flow-testing natural gas from its Lebien LE-2H horizontal shale well on the Lebork license in the Baltic basin Poland.

The company said it is also near an announcement concerning its Warblino LE-1H horizontal well on the Damnica license 25 miles west. The wells are designed to test Lower Paleozoic shales.

San Leon Energy PLC will shortly spud the Belvedere-1 exploratory well in the Nida Trough in southern Poland.

San Leon has 100% interest in the four-block, 280,000-acre Nida concession northeast of Krakow. The well is the first of two to be drilled to 1,000 m back to back targeting conventional oil prospects on trend with Płowowice and Grobla oil fields. Meanwhile, Talisman Energy and San Leon plan to spud the first well on Baltic basin acreage later in September.

Alberta

Tourmaline Oil Corp. and Perpetual Energy Inc., Calgary, tied in and placed on extended production test Aug. 19 one of their three Montney horizontal wells in the Elmworth area of Alberta.

The well is stabilizing at 6 MMcfd. Perpetual said the test is designed to evaluate Montney flow characteristics and liquids composition. The gas stream is expected to yield 40-50 bbl/MMcf of recoverable hydrocarbon liquids.

Perpetual owns more than 85 gross sections of prospective Montney rights in the Elmworth area, with a net 50% working interest in the majority of the joint venture lands. Pending the results of the extended production test, an area development plan will be established.

Tourmaline and Perpetual plan to develop the resource in a series of 50 MMcfd pods or phases. Perpetual has sufficient land and drilling inventory to support four comparable-sized development pods.

Perpetual has assigned reserves of 32 bcfe, a contingent resource of 145 bcfe, and a significant exploratory land base at Elmworth area.

New Brunswick

Contact Exploration Inc., Calgary, plans to spud in September 2011 at a newly defined oil prospect named Hopewell in the Edgett's Landing area of New Brunswick.

Contact has a 94% interest in the Hopewell well, which is designed to test a new pool believed to be hydrocarbon-bearing on the company's South Stoney Creek acreage in the Moncton subbasin.

Extensive production testing of a well that flanks the seismically defined Hopewell structure demonstrated good light oil production and good opportunity to move upstructure with further wells. The location has been built.

Hopewell is just south of Stoney Creek oil and gas field, where natural decline has flattened at both horizontal wells drilled in late 2010 and production continues at a combined 100 b/d of oil with $70/bbl netbacks.

Meanwhile, in the Alberta Deep Basin, Contact has established a new core area by paying a land equalization sum to another oil and gas operator and committing to drill a Contact-operated well.

Alaska

Buccaneer Energy Ltd., Sydney, has spudded a second well at its Kenai Loop project onshore Alaska's Cook Inlet basin and is to set surface casing at 3,500 ft.

Target depth of the KL-2 well, being directionally drilled from the same pad as KL-1, is 11,000 ft.

Bottomhole locations are expected to be 1,800 ft apart. Buccaneer will test the 9,700-ft and 10,000-ft zones tested in KL-1.

KL-2 will also test other zones at 10,600 ft that were untested in KL-1 due to rig availability constraints. The sands around 10,600 ft were also a high priority testing target based on the logs from KL-1. KL-2 will penetrate the 10,600-ft sands in a slightly higher structural position than in KL-1.

Ohio

TGS-NOPEC Geophysical Co. has let a contract for the acquisition of 307 sq miles of multiclient 3D seismic in the Utica shale play in the Appalachian basin in northeastern Ohio.

Tidelands Geophysical Services is expected to shoot the Firestone 3D survey in 7 months starting first-quarter 2012.

TGS noted that the Utica shale is a few thousand feet below the Marcellus shale and is characterized by a western oil phase, a central wet gas phase, and an eastern dry gas phase.

The new seismic survey is over the wet gas portion of the Utica.

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