Coiled Thera Regulatory News (COIL)

16 Aug 2006 07:01

Cambrian Oil & Gas PLC16 August 2006 16 August 2006 Cambrian Oil & Gas Plc ("COIL" or "the Company") Progress at the Beshkent-Togap Water Injection Project Cambrian Oil and Gas Plc announces the following progress at its Beshkent-Togapwater injection project in the Kyrgyz Republic. Key Points: • The project has been producing positive operating cash flow since May • Consistent incremental oil production from a number of Beshkent wells • Additional injection being initiated at Togap • Full scale expansion of the project under consideration Beshkent-Togap Water Injection Project Water injection commenced at 2 wells in October 2005 with the objective ofincreasing oil production in the immediately adjoining production wells at theBeshkent end of the field. Regular well testing has been undertaken since October to detect and monitorresponses at the adjoining oil production wells. This testing guides theCompany's plans to expand the project across the whole field, which containsabout 60 producing oil wells. Operational performance is now improving andincremental oil is being consistently recorded in ongoing well tests. Incremental oil has now been recorded from a number of producing wells: Well 25 has produced since February at about 3 times the agreed base level fromwhich incremental oil is calculated. Well 66 has now produced incremental oil at50%-100% above the base rate for several months. Four other wells have recordedincremental oil at lower rates. Replacing pumps and packers to increase water injection volumes COIL is taking steps to increase the level of water injection by installing newpumps and high pressure packers on the injection wells to increase waterinjection volumes. These actions are expected to improve performance.Additional wells in the test area may be converted to injectors. Project in positive operating cash flow mode Gross incremental oil production for May, June and July (after deductingaccumulated oil debits for the converted injection wells) is now being finalisedwith Kyrgyzneftegaz and the net cumulative incremental volume is expected to beabout 1,000 barrels. COIL's initial 70% share of this incremental oil is beingaccumulated for sale in the near future. The Company will record its firstpositive income from the sale of COIL's share of this incremental oil productionand after allowing for accumulated operating costs. While this initial volume may be seen as relatively small, it needs to beconsidered in the light of the equipment constraints described above andoperational downtime during the start-up period. Operational performance is nowimproving and the results are building confidence that the project can be scaledup commercially across all of the wells on the field. Project expansion in the Togap area of the field Based on the progress in the Beshkent test area and given increases in localpetroleum prices, COIL has agreed with Kyrgyzneftegaz to fund rehabilitation ofpreviously abandoned injection facilities in the Togap area of the field.Kyrgyzneftegaz previously established injection in the Togap area of the fieldin the late 1980's but this project fell into disrepair. This expansion is nowunderway and will provide a low cost extension of the project. Future project expansion COIL and Kyrgyzneftegaz are considering possible plans to expand the project toa full field basis. Further discussions are expected to map out forwarddevelopment options. The parties will keep further expansion commitments underreview in the context of ongoing well test results. Neale Taylor, Chief Executive Officer of Cambrian Oil and Gas Plc, said: "The Beshkent-Togap project is now showing progress. Latest results areencouraging, it is pleasing that the project is now generating positiveoperating cash flow, and we look forward to working with Kyrgyzneftegaz toexpand the project in the future." Neale Taylor, B.Sc (Applied Geology, Hons), MS (Pet Eng), a Director of theCompany and a qualified person in the terms of the AIM Rules of London StockExchange PLC, has compiled, read and approved the technical disclosure in thisregulatory announcement. The technical disclosure in this announcement complieswith the SPE Standard. Ends For Further Information please contact: Cambrian Oil & Gas Neale Taylor, CEO +44 (0) 20 7409 0890 Paul Mc Groary, Director + 44 (0) 79 3056 8160 WH Ireland Peter Jackson +44 (0) 20 7220 1666 Parkgreen Communications Victoria Thomas +44 (0) 20 7493 3713 This information is provided by RNS The company news service from the London Stock Exchange