BOIL.L Regulatory News (BOIL)

23 Sep 2008 07:00

FOR IMMEDIATE RELEASE

7am 23rd September 2008 

GOLD OIL plc ("Gold" or "the Company")

OPERATIONAL UPDATE

San Alberto-2X, Block XXI Onshore Peru

The testing of the target zones encountered in the recent well has now been completed and the conclusion is that the well does not contain producible hydrocarbons. Both the Verdun reservoirs (Tertiary) that produces gas from the Tertiary in the Las Casita gas field in the neighbouring block and the Palaeozoic, that produces oil in the offshore San Pedro oil field, failed to deliver hydrocarbons despite both reservoirs having gas and oil shows whilst drilling and the logs showing the presence of hydrocarbons.

Following on from the San Alberto-1X well drilled in 2006, where hydrocarbons were shown on the logs but due to mechanical problems it was not possible to recover hydrocarbons to the surface, the company decided to look for a geophysical method of locating hydrocarbons. Seismic will give information on the Tertiary structures but is unable to penetrate below the top of the Palaeozoic. Even with seismic one is essentially drilling the Palaeozoic "blind". The Company commenced with an electrical process known as "DNME" which identifies hydrocarbons as opposed to structures. A Russian company that has used this process successfully in the Former Soviet Union (FSU) was commissioned to run the DNME survey at the same time as a gravimetric survey was run. 

The gravimetric survey showed that the highest point of the main structure was to the South West of the San Alberto-1X well but the DNME survey showed indications of "hydrocarbons", probably in the Palaeozoic, to the north-west of San Alberto-1X, albeit lower on the main structure. Unfortunately, due to a village, it was not possible to run the DNME survey in the area where the gravimetric survey showed the "high", except for one small overlapping area. The decision was taken to go with the well location recommended by the Russian company.

Although the DNME and gravimetric process is considerably cheaper than conventional seismic, the failure of the DNME survey on the San Alberto structure means that the Company will have to rely on the gravimetric survey process as a reconnaissance tool to indicate where seismic should be shot to delineate a structure, especially in the Tertiary.

Azar, Onshore Colombia

The Palmero-1 well will be put on production in October on natural flow for approximately two months to obtain flow-rate and pressure data before deciding on the size of the down-hole pump required to produce the well at its optimum level.

Nancy, Burdine and Maxine Oil Fields, Onshore Colombia

The long awaited Environmental Permits (PMA) for the Burdine workovers were finally approved and issued in August. An agreement has been reached with the local community and signed in early September. All this documentation now goes to the Ministry of the Environment, the Ministry of the Interior, the Ministry of Justice and, within the region where the fields are located, the Mayor of Orito the Procurator of Putumayo, the Defense of Orito and Corpoamazonia. All these organizations have to respond by the end of October after which operations can commence on the wells.

Wellheads and tubing have been ordered and a workover rig is currently being sought.

Rosa Blanca, Onshore Colombia

All the service contracts are being put in place and the drilling rig contract has just been let. The target date for spudding the first exploration well is December 1st.

The technical information contained in this announcement has been reviewed and approved by Mike Burchell, B.Sc., member of the SPE and with over 45 years experience in the oil and gas industry. 

Speaking from Northern Peru, Gary Moore the CEO said: " We are obviously very disappointed that the technology we used to select the well location for San Alberto-2 X well did not work. This is by no mean the end of exploration in this block as we have recently re-interpreted the logs from an untested well drilled in the south of the block some 50 years ago that shows good hydrocarbon intervals. The current plan is to shoot seismic over this structure, the large structure identified in the centre of the block and the San Alberto structure, followed by a three well exploration well programme. We are currently in the early stages of locating a workover rig that is capable of working over the Burdine wells, testing the Rosa Blanca well and drilling the shallow Block XXI exploration wells"

ENDS

For further information, please contact:

Gold Oil plc

Michael Burchell, Director

Tel: +44 (0) 1372 361 772

Beaumont Cornish LimitedRoland Cornish

Tel: +44 (0) 20 7628 3396

Blue Oar SecuritiesJerry Keen

Tel: +44 (0) 20 7448 4492

Conduit PRJonathan Charles

Tel: +44 (0) 20 7429 6611