Emerald Energy Regulatory News (EEN)

4 Apr 2006 07:02

Emerald Energy PLC04 April 2006 Emerald Energy Plc FOR IMMEDIATE RELEASE 4 April 2006 Operations Update - Syria Emerald Energy Plc ("Emerald" or the "Company") would like to provide thefollowing update: Definitive agreements have been executed with two contractors for the drillingof three wells with the option to drill a further two wells within Block 26,Syria. The operator of Block 26 has taken assignment of an existing contract for adrilling rig owned and operated by the Croatian drilling contractor Crosco, whoare part of the INA Group of Croatia. Commencing in early May 2006, this rigwill be used to drill an exploration well to evaluate the Souedieh Northprospect. There is an option to drill another well, back-to-back, with this rigunder the assignment. The Souedieh North prospect is located in the northeastregion of Block 26. A vertical well will be drilled to an approximate depth of7,200 feet with the primary objective being Cretaceous reservoirs similar tothose producing in the adjacent Souedieh and Karachok oil fields. The operator has also signed a definitive agreement with MB Drilling OverseasLimited, part of MB Petroleum Services LLC of the Middle East. The agreement isfor the drilling of two wells, with an option to drill one further well. Thislarger rig will be used to drill to the deeper Palaeozoic prospects identifiedin Block 26. The first well shall be Tigris No.1 on the Tigris structure locatedin the northeast region of the Block. A vertical well, expected to spud inAugust 2006, will be drilled to a depth of almost 15,000 feet with the primaryobjectives being a series of Palaeozoic (Carboniferous and Devonian) sandstonereservoirs. The Tigris structure is directly underlying the Souedieh oil field(the largest known oil field in Syria), where oil is produced from the shallowerCretaceous reservoirs. Wireline log evaluation of an existing well on thestructure drilled some years ago has identified pay zones within the objectivereservoirs, and the Tigris No.1 well is designed to evaluate these reservoirsand appraise this potential hydrocarbon accumulation. On 30 January 2006 Emerald announced the results of the Tigris reserves study byRyder Scott Company, L.P. (Ryder Scott), an independent petroleum engineeringfirm. Based on data currently available, the Ryder Scott report concludes thatthere are nine potentially productive zones contained within Palaeozoic agereservoirs penetrated by the existing well bore. As the available data isinsufficient to determine the expected hydrocarbon fluid contained within thestructure, Ryder Scott developed two cases for this evaluation: a gas case andan oil case. If Tigris is a natural gas accumulation, Ryder Scott has classified 442 bcf asProbable Reserves, a further 442 bcf as Possible Reserves, and a further 3447bcf as a Prospective Resource. In summary, total hydrocarbon potential forProbable and Possible Reserves and Prospective Resource in this case is 4330bcf, equivalent to 722 mmboe. If Tigris is an oil accumulation, Ryder Scott has classified 104 mmbbl of oiland 64 bcf of gas as Possible Reserves and a further 408 mmbbl of oil and 245bcf of gas as Prospective Resource. In summary, total hydrocarbon potential forPossible Reserve and Prospective Resource in this case is 512 mmbbl and 308 bcf,equivalent to 563 mmboe. Emerald holds a 50% working interest in the contract for exploration andproduction for Block 26, Syria, through SNG Overseas Ltd, a 100% ownedsubsidiary. The operator of Block 26 and holder of the remaining 50% isGulfsands Petroleum Plc. Alastair Beardsall, Emerald's Chairman, said: "We are now firmly on track to start drilling some of the 31 leads and prospectson Block 26, a discovery in any of the prospects will greatly enhance ourreserve base." Enquiries: Helen Manning 020 7925 2440 This information is provided by RNS The company news service from the London Stock Exchange