Exploration/Development Briefs

July 16, 2012


Madalena Ventures Inc., Calgary, has updated operating status on its Neuquen basin blocks in Argentina.

Initial flow tests of the Sierras Blancas formation in the CAN-5 development well on the northern part of the Coiron Amargo block averaged 370 b/d of oil equivalent, 85% oil, mainly on a 5⁄16-in. choke over a 3.2-day period. The well will be tied into the gas flowline network completed in April 2012 and oil production trucked to a nearby sales point.

The completion rig will move to test the CAN-7 development well on the CAN X-3 Sierras Blancas structure. CAN-7 is cased 10,390 ft total depth. It encountered the hydrocarbon-bearing Vaca Muerta shale formation and the conventional Sierras Blancas formation. Open hole logs could not be run while drilling due to continuous high pressure inflows during drilling the Vaca Muerta. The rig is expected to return to the block in 2 months in order to continue drilling. The joint venture is continuing its analysis of full-diameter core from the CAS X-4 drilling location and its evaluation of several candidate wells for fracture stimulation in Vaca Muerta.

On the Curamhuele block, the service rig has been mobilized in order to prepare the Cur X-1 well for a three-stage fracture stimulation of the Lower Agrio shale. Several hundred barrels of light gravity crude have been flowed from the Lower Agrio in recent days to depressurize the well in order to perform prefrac well intervention. The frac treatment is to take place in July 2012.

On the Cortadera block, Apache continues to await specialized equipment required to test the initial frac stage in the CorS X-1 vertical exploratory well. Work to assess the uphole Quintuco, Mulichinco, and Agrio formations is expected to be carried out after the Vaca Muerta test.


Exoma Energy Ltd., Brisbane, has spudded the second well of the Galilee Joint Venture's 2012 exploration program.

Darr-1, 40 km north of Longreach, Qld., is a core hole to sample shale oil and gas in the Toolebuc shale, expected at 593 m. Analysis of the core will provide data on the distribution of properties needed to appraise the shale resource identified by the Bessies, Euston, and Katherine wells in 2011.

The well has been located to provide a low-cost secondary test of the southern extent of Permian coal measures in ATP 1005P by quickly rotary drilling to basement after coring the Toolebuc shale. Top of coal is expected at 1,046 m. Planned total depth is 1,120 m.

No coal is expected to be encountered, but the log data will provide confirmation of the structural geology that affects the Bradley Creek-1 coal seam gas well to be drilled later in this year. The well is designed for shale exploration and will be plugged and abandoned.


Dana Petroleum PLC, a unit of Korea National Oil Corp., said two appraisal-development wells have boosted production along the Gulf of Suez in Egypt.

Fin-2X went to 9,712 ft and flowed at a constrained 2,220 b/d of oil and 1.26 MMscfd of gas from the thickest Rahmi sand reservoir found to date on the North Zeit Bay concession. It was tied back to the Lorcan production facility.

Meanwhile, the A22 development well on the East Zeit A platform went to 12,051 ft. It targeted an undeveloped area of the field with poorer reservoir quality. After drilling a 1,426-ft horizontal section in the Kareem Marker formation, it has been completed and went on production at about 2,000 b/d of oil. The well extends the life of East Zeit field, which began producing in 1985.

The operator is Zeitco, Dana Petroleum's joint venture with Egyptian General Petroleum Corp. Dana Petroleum has 100% working interest in both concessions.

Dana Petroleum, which has more than 13,000 b/d of net working interest production in the Nile Delta, Western Desert, and Gulf of Suez, plans to drill more than 10 further wells in Egypt this year.

Falkland Islands

Edison International SPA has taken a farmout from Falklands Oil & Gas Ltd. on licenses south and east of the Falkland Islands in the South Atlantic.

Edison will earn a 25% interest in FOGL's northern area licenses. Edison will contribute its pro-rata share of the costs of the two-well 2012 exploratory drilling program. Edison will earn a 12.5% interest in FOGL's southern area licenses and contribute its pro-rata share of the 2012 work program.

Edison will also pay its pro-rata share of certain historical costs incurred by FOGL during 2011 related to the 2012 drilling program. Edison's share of historical expenditures, together with its share of the 2012 drilling program costs, are expected to be about $50 million.

Edison will also make a separate $20 million cash contribution to FOGL on completion of the farmout agreement and a further $20 million in 2013. In order to obtain the option, Edison has already paid a $3 million nonrefundable fee. FOGL will remain operator of all licenses.

FOGL expects to receive the Leiv Eiriksson semisubmersible in July 2012 after it has drilled the Borders & Southern Petroleum PLC Stebbing well. FOGL will drill its first well on the Loligo prospect and the second well will be selected based on Loligo results.

If encouraging, it will be either a further well on Loligo or a well on Nimrod. Otherwise, a well will be drilled on the Mid-Cretaceous Scotia prospect. More drilling in the campaign would be subject to well results and rig availability.


The Talisman Energy Inc.-operated Kurdamir-2 well on the Kurdamir block in the Kurdistan Region of Iraq is to be cased to final depth of 4,000 m after penetrating 510 m of naturally fractured marlstones and limestones in Cretaceous Shiranish with oil shows and elevated mud gas readings throughout.

Talisman's partner, WesternZagros Resources Ltd., said it anticipates reporting results of the Shiranish testing program throughout July and August. Cased-hole testing programs are also being discussed with Talisman for the previously cased Eocene and Oligocene reservoirs.

WesternZagros is also in discussions with the operator on extended well testing options following the completion of the Kurdamir-2 initial testing program. In addition, the parties are discussing the timing and location of the next appraisal well, Kurdamir-3.


Rift Energy Corp., private Toronto operator, has signed a production sharing contract for Block L19 in the Lamu basin onshore Kenya.

Block L19 covers 2.9 million acres in southern Kenya along the Tanzania border 160 km north and flanked by the Indian Ocean to the east. Rift Energy reviewed gravity maps and other data and identified multiple structures. An exploration program is being planned to begin soon.

The block's only well, Ria Kaluli-1, was drilled off-structure to a depth of 1,538 m in 1962 and was plugged after finding oil shows in the Karoo formation. More seismic surveys and technical studies will be conducted in order to build a prospect inventory and high-grade drilling locations.

Total SA has signed a production sharing contract with the Kenya government for deepwater Block L22 in the Lamu basin offshore Kenya.

Total will operate L22 with 100% interest. The block covers more than 10,000 sq km in 2,000-3,500 m of water. Phase 1 of the exploration program consists of a 3D seismic survey.

Total holds a 40% interest in Anadarko Petroleum Corp.-operated L5, L7, L11a, L11b, and L12 exploration licenses in the Lamu basin. An exploratory well is to spud in 2012.


International Petroleum Ltd., Perth, has spudded exploratory Well No. 4 at its Krasnoleninsky project in the Khanty-Mansiysk Autonomous Region of Western Siberia, Russia.

The preceding exploratory wells No. 1 in license block 7 and No. 2 in license block 8 both discovered commercial quantities of oil. Well No. 4, the first well in block 10, is to go to 3,100 m true vertical depth. IPL holds 75% interest in four blocks that total 1,467 sq km. The other planned 2012 well is Well No. 3 in license block 9.

PetroKamchatka PLC plans to take a farmout to earn interests over a 3-year period in the Prizalivnayam, Verkhnepitskaya, and Borschevskaya licenses on Sakhalin Island and in Eastern Siberia, Russia, under a non-arms length agreement with East Siberian Resources Ltd., Tortola, BVI.

PetroKamchatka, which will ask shareholders in mid-August to approve a name change to EastSiberian PLC, wants to raise $50 million to fund work programs under the agreement and support general corporate purposes.

PetroKamchatka will earn the interests by drilling development or delineation wells and shooting 2D seismic on the licenses.


Eni SPA has taken farmouts from Neon Energy Ltd. and KrisEnergy Ltd. and will become operator of an exploration program on two blocks in the Song Hong and Phu Kanh basins off Vietnam, subject to government approvals.

The Song Hong basin is estimated to contain 10% of Vietnam's hydrocarbon resources, mainly gas, and significant discoveries have recently been recorded there, Eni said.

Eni will carry Neon Energy and KrisEnergy for 800 sq km of 3D seismic and one exploratory well in Block 105, subject to cost caps. Block 105 covers 7,192 sq km in 20-80 m of water in the Song Hong basin off northern Vietnam.

Eni will also carry both companies for 250 sq km of 3D seismic and one exploratory well in Block 120, also subject to cost caps. Block 120 covers 8,469 sq km in 50-1,100 m of water in the northern Phu Kahn basin off central Vietnam. Seismic acquisition is under way on both blocks and is to take 6 weeks.

Timing of exploratory drilling on both blocks depends on completion of processing and interpretation of the 3D data and the availability of rigs.


Canada Energy Partners, Vancouver, BC, has acquired Hudson's Hope Gas Ltd., the subsidiary of GeoMet Inc. that is 50% owner and operator of CEP's Peace River coalbed methane project in Alberta.

The acquisition consolidates operations and 100% project ownership into a single company and addes 230 bcf of resource potential, bringing the total to 500 bcf. The resource potential can only be commercialized under higher gas prices, CEP noted.

The deal secures 100% ownership of the Peace River gas plant, which is strategic to both the CBM and Montney shale developments. It solidifies ownership and control within CEP of the only water disposal wells in a 35-mile radius, which are strategic to both developments. CEP also assumes GeoMet's share of abandonment liabilities.

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