Verenex to slow work in Libya's Ghadames

Verenex Energy, being acquired by CNPC International, is temporarily reducing the pace of its exploration program in Libya 40% from the original 2009 budget adopted in October 2008.

By OGJ editors
HOUSTON, Mar. 11 -- Verenex Energy Inc., Calgary, being acquired by CNPC International Ltd., is temporarily reducing the pace of its exploration program in Libya 40% from the original 2009 budget adopted in October 2008.

Verenex, 50-50 partner with Medco International Ventures Ltd. in Area 47 in the Ghadames basin, also said its K1-47/02 exploration well had strong gas shows and found extensive fracturing in the Silurian Basal Tanezzuft hot shale, which represents a potential oil and gas resource play in its own right.

The Tanezzuft is the source formation for hydrocarbons the companies have discovered in the Silurian Lower Acacus and Ordovician Memouniat formations. The K1 well also had strong gas shows in the Memouniat formation.

Verenex will immediately release one of its two drilling rigs and its completion rig in light of the current business environment. The new 2009 budget of $93 million compares with $137 million spent in 2008. The company is waiting to incorporate feedback from National Oil Corp. with respect to the joint venture's proposed development plan.

The revised 2009 work program provides for spudding as many as eight wells, two of which are drilling, and testing seven wells, two of which are completed. Verenex will recontract a workover rig in August when its backlog can support a more continuous program.

The company has submitted to NOC the flow test results for the I1 and J1-47/02 exploration wells and expects to disclose the results by the end of March. It will delay testing the K1 and L1 wells, both indicated oil and gas discoveries, until later in 2009.

Verenex is seeking NOC's consent for sale of the company to CNPCI under the definitive agreement (OGJ Online, Feb. 27, 2009). Verenex and Medco had drilled nine discoveries and 17 total wells on Area 47 by the end of 2008.

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