BOIL.L Regulatory News (BOIL)

7 Dec 2006 10:46

Gold Oil PLC07 December 2006 For Immediate Release 7th December 2006 Gold Oil plc ("Gold") update on the testing of their Peruvian exploration well San Alberto-1X San Alberto-1X was selected following extensive regional geological andgeophysical studies that tied in Block XXI to other Palaeozoic and Tertiarywells and fields. The well was spudded on 11th July 2006 and reached total depthof 5,113 feet on the 3rd August 2006, meeting the geological objectives of thedrilling programme. The objectives of the wild cat were the Tertiary Verdun sands that produce gasin Olympic's La Casita gas field 20 - 40 Kms to the west of San Alberto-1 andthe fractured Palaeozoic quartzites that produce oil in PetroTech's offshore SanPedro field 50 kms to the west. Logging, drilling results and regionalinformation showed 250 gross feet of hydrocarbon bearing sands in the Palaeozoicand 315 gross feet of hydrocarbon bearing sands in the Verdun. The decision wastaken to production test these hydrocarbon bearing sands in both the Verdun andthe Palaeozoic. After circulating to completion fluid and running a slotted-liner over thePalaeozoic the drilling rig was moved off location. After clearing the locationa work-over hoist and test facilities moved on to the well on 22nd August andproduced highly saline formation water at 960 barrels per day from the base ofthe Palaeozoic, below the hydrocarbon bearing interval. After a period ofreflection a heavier rig was moved back onto the well on the 9th November, andattempts were immediately made to remove the slotted liner. These attemptsfailed and after attempts to cut the liner and recover it in shorter sectionsfailed, it was decided to attempt to test the deepest Palaeozoic by cementingoff the water as best as we could and perforating the slotted liner above thecement plug. This failed to prevent water from being produced and eventually weattempted to isolate the deeper Palaeozoic and perforate higher in thePalaeozoic. Again, the same water flows were encountered. As all attempts toshut off the water had failed it was decided to plug and abandon the testing ofthe Palaeozoic and leave it for a future well. Fortunately well costs in thisarea are still low in the $1.5 million region. The Verdun was then isolated from the Palaeozoic and perforated, but again onlythe same highly saline water was produced. Gary Moore, Managing Director of the Company, said that "This is obviously verydisappointing for the Company as we had several independent specialist companiesto review and interpret the logs before going back into the well and attemptingto test the zones interpreted as being hydrocarbon bearing. Due to mechanicalproblems with the well we were unable to stem the flow of water and test thereservoirs properly. Despite the "disappointing" results, we have obtained agood quantity of high quality and useful technical data which was a prerequisiteto a proper understanding of the block and the whole region, so in that respectthis first wild cat served its purpose." The technical information contained in this announcement has been reviewed andapproved by Mike Burchell, B.Sc., 66, member of the SPE and with over 45 yearsexperience in the oil and gas business. Enquiries: Gary Moore Managing Director Tel: +44 (0)1737833597Email: gmoore@goldoilplc.com Mike Burchell Chairman Tel. +44 (0) 1372361772Email: mikeburchell@hotmail.com Roland Cornish Beaumont Cornish Limited Tel: 020 7628 3396 This information is provided by RNS The company news service from the London Stock Exchange