Last checked at 30 Mar 2011 09:00
Europa Oil & Gas (Holdings) plc
29/03/11
Operational Update
The Directors of Europa Oil & Gas (Holdings) plc are pleased to provide an update on several active projects.
Highlights
UK Production tested oil from two zones in the new onshore West Firsby well WF-9 Installation of jet pump is key to maximising rates Well stimulation work being planned for Crosby Warren
Romania Barchiz-1 sidetrack to deepen the well to the primary target
France 3D reprocessing complete at Berenx, new 3D and engineering work planned
West Firsby
Two zonal pumping tests have been conducted on the new WF-9 well. As previously reported, the well encountered oil in two reservoir zones.
The lower of these, Zone 2, produced oil at rates of around 80bopd with strong associated gas but very little water. Heavy wax build-up in the well and the high gas rates are thought to have impaired flow through the beam pump.
Zone 1 produces much higher volumes of fluid, but with a high water cut. Net oil production from this zone under a beam pump regime is 40bopd. The beam pump, however, is only able to drawdown the well some 300psi, indicating that there is significant production upside with a properly configured pump. It should be possible with a jet pump to produce drawdown in the region of 1,500psi or more and the main constraint will be fluid handling capacity. The recent successful re-completion of WF-3 as a water disposal well is key tool in managing this issue long term.
A jet pump system has been sourced and will be commissioned to undertake further tests on both zones. Following the results of these new tests, a longer term zonal production strategy will be decided.
The workover of WF-7, which required a new bottom hole assembly, is due to commence this week and it is hoped the well will be back onstream within the next 2 weeks. Once WF-7 is back onstream, it is expected that Group production should be approximately 300bopd with further upside expected following installation of the jet pump on WF-9 and well stimulation work at Crosby Warren.
Crosby Warren
Engineering studies are complete on the question of undertaking a new hydraulic frac stimulation of the CW-1 reservoir. The study has shown that the historical frac has become ineffective over time. Consequently, a repeat frac stimulation presents an opportunity to significantly increase field production. The original frac was highly successful and led to a 15 fold increase in production rate. It is hoped that this work can be carried out in the next 2-4 months.
Discussions are ongoing with regard to the acquisition of a new 3D seismic survey jointly with neighbouring licence holders later this year which would lead to a much more robust subsurface model for both the Crosby Warren field and the Company's nearby Wressle exploration prospect.
Barchiz
Barchiz-1, drilled late last year, recovered oil on DST from a shallow sandstone reservoir with approximately 35 feet of net pay. The main exploration target of the well was not reached due to technical constraints. Following partner meetings last week, Europa has declared an intention to deepen the Barchiz-1 well to the primary objective as a sole-risk operation, subject to financing. The Operator proposed acquiring further seismic data along trend from Barchiz to identify a new exploration well location in the play. However, the Directors' view is that this an opportunity to test whether the Oligocene reservoir is present beneath the current well TD, a concept supported by nearby well control.
The joint venture group has applied for a licence extension in order to pursue the remaining undrilled prospectivity on the licence and the associated work programme is currently being agreed with the authorities. Barchiz-1 sidetrack is expected to be drilled in the second half of 2011.
Berenx
Planning the appraisal of this potentially multi-TCF gas project has taken a step forward with the completion of 3D seismic reprocessing by CGG, which has greatly improved the seismic image. NRG, the Aberdeen-based well engineering company, have been retained to undertake detailed well engineering for the planned Berenx-3 appraisal well.
In the meantime and following the success of the CGG work, further 3D seismic data is planned for later this year. This survey, which could be acquired in Q4 2011, will quantify the western extent of the Berenx structure, which tested dry gas in the 1970's.
Acquiring this survey will fulfil the work commitment of the first phase of the permit and allow for automatic renewal in early 2012.
General
It should be noted that achieving optimum rates on the new West Firsby well will take some weeks and that, in conjunction with the earlier drilling delays this will generate full year (to 31 July 2011) projected revenue and profits below market expectations.
The Company is actively engaged in new venture activity, including current and near-term licensing rounds in its core area of NW and Continental Europe. The aim is to add significant high impact exploration acreage into the asset portfolio for drilling in 2012 onwards.
Paul Barrett, Managing Director, said `There has been significant progress in a number of value-enhancing projects and we look forward to a sustained newsflow from seismic, drilling and new venture activity through the coming 12 months. Production growth over the coming months is expected to support this activity'.
Further information:
Europa Oil & Gas
Paul Barrett / Phil Greenhalgh Tel: +44 1235 553 266
finnCap
Sarah Wharry / Henrik Persson, Corporate Finance Tel: +44 207 220 0567 Joanna Weaving, Corporate Broking Tel: +44 207 600 1658
EUROPA OIL & GAS (HOLDINGS) PLC