CERP.L Regulatory News (CERP)

12 May 2008 06:00

FOR IMMEDIATE RELEASE 12 May 08 LENI GAS & OIL PLC ("Leni Gas & Oil" or the "Company") Appoints International Petroleum Consultancy to develop oil and gas exploitation plan for Spanish assets Leni Gas & Oil Plc (AIM: LGO), an oil and gas development and production company, announces today that TRACS International Ltd ("TRACS"), the Aberdeen based international consultancy services company that specialises in the petroleum industry, has been appointed as technical engineering supplier for the Company's Spanish assets, which includes the producing Ayoluengo onshore oilfield. After over 40 years of production, the Ayoleungo field has produced 17 million barrels of oil ("mmbo") from a STOIIP ("stock tank oil initially in place") in the range of 93-116 mmbo representing an average recovery of only 17%, which is low for a good quality sandstone reservoir. Under the terms of the appointment, TRACS have initiated three major work programmes: 1. To provide operational technical support for the existing production asset (Ayoluengo), 2. To develop an exploitation tactical plan for Ayoluengo to significantly step change production, 3. To execute a full technical assessment of all the exploration acreage to identify all prospects and associated volumetrics. A more detailed account of the work programs is noted below: Ayoluengo Production Operations ·; Provide production technology, reservoir engineering and geoscience advice and support for ongoing field operations. ·; Issue periodic reporting covering production, activities and plans. ·; Provide periodic reserves review and reporting for the field. Ayoluengo Exploitation Planning ·; Monitor performance of the pilot production enhancement programmes and develop the scope for wider perforation and water injection programs across the full field. ·; Refine the in-place reserves and recovery factors in each reservoir zone in order to target infill drilling opportunities. ·; Develop well stimulation programs to improve the productivity of all production and injection wells. ·; Determine the technical viability of converting the field into a gas bunkering (storage) asset subsequent to full oil depletion. ·; Compile a full tactical exploitation plan for the next three to five years, maximising the oil recovery factor and leading into gas bunkering. Exploration Permit Prospectivity ·; Review and assess all available area seismic, well information and existing discoveries to develop an integrated geoscience and reservoir model of all acreage. ·; Identify all exploration and development prospects, with relative chance of success and probable volumetrics. ·; Based on similar analysis for Ayoluengo, develop a superset of exploitation options for the total acreage, to both validate exploration prospectivity and propose near term developments for incremental production. The Ayoluengo Exploitation Planning and Exploration Permit prospectivity programmes will be executed during the next few months, and are both due to be completed by early Q4 2008. David Lenigas, Executive Chairman, commented: "The recently completed re-interpretation of the Ayoluengo field by TRACS has identified the huge scope for increased recovery from the field, through secondary exploitation. These exploitation options, which we are currently piloting, are targeting to improve overall field recovery by 10% and an aggregated 1000bpd of production. TRACS are an ideal choice, to build upon their excellent work in order to fully define the exploitation tactical plan for the Ayoleungo oilfield going forward, as well as for the surrounding exploration acreage. Adopting an area wide analysis of the potential of our Spanish assets, is the logical approach to maximize recovery of the acreage, support the adoption of common exploitation methods and most importantly, for us to maximize the value and cash flow of the assets." The information contained in this announcement has been reviewed and approved by Andy Spriggs, Managing Consultant at TRACS International (member of the SPE and PESGB) who has 19 years relevant experience in the oil industry. For further information, please contact: Leni Gas & Oil Plc David Lenigas, Executive Chairman Tel +44 (0) 20 7016 5100 Beaumont Cornish Limited Roland Cornish Rosalind Abrahams Tel +44 (0) 20 7628 3396 Pelham Public Relations Charles Vivian Tel + 44 (0)20 7743 667 Evgeniy Chuikov Tel +44 (0)20 3008 5506 ENDMSCILFIEESIAIIT