IAE.L Regulatory News (IAE)

22 Jul 2008 07:00



22 July 2008

Rheochem Plc

("Rheochem" or the "Company")

Further Development of Athena Field by Ithaca Energy

Rheochem plc, the oil and gas business with oil services, production, development and exploration assets, notes the announcement made on 21 July 2008 by Ithaca Energy Inc relating to successfully testing 28 degree API sweet oil at a stable rate of 2,330 barrels of oil per day from its third well (14/18b-18) on the Athena project. Rheochem has a net 5% interest in this block through its 50% ownership of Zeus Petroleum Limited.

Ithaca Energy said:

Not for Distribution to U.S. Newswire Services or for Dissemination in the United States

Ithaca Energy Successfully Tests Oil on Athena Project

LONDON, U.K. - CALGARY, ALBERTA, July 21, 2008 -- Ithaca Energy Inc. (LSE-AIM: IAE, TSX-V: IAE), an independent oil & gas company with exploration and development assets in the UK North Sea, is pleased to announce today that it has successfully tested 28 degree API sweet oil at a stable rate of 2,330 barrels of oil per day ("bopd") from its third well (14/18b-18) on the Athena project in the Outer Moray Firth area of the United Kingdom's continental shelf. 

The #18 well was directionally drilled to a bottom hole location 1,500 feet north of the earlier #15 well. The Upper Leek sandstone was encountered at 8733 feet subsea, 68 feet high to the #15 well which tested at rates up to 1,330 bopd. 

The well penetrated 447 feet of gross oil-bearing sandstones in the Upper Leek formation and a net pay interval of 129 feet, on a vertical basis. Following perforation of a 190 foot (178 feet vertical) interval, the 14/18b-18 well flowed at a stable rate of 2,330 bopd through a 52/64" choke during a high rate test and a stable rate of 1,150 bopd through a 24/64" choke in a test of 22 hours duration. No water was produced during the test period and there was no H2S detected.

The well is being completed for future production. Based on this and the success of the earlier 14/18b-15 and 14/18b-16 wells, Ithaca intends to continue its Field Development Plan (FDP) application with the UK's DBERR, with final approval expected early in 2009. 

Ithaca has now drilled 3 wells for use as production wells. The company is in the process of securing a rig for the remainder of the development drilling post FDP approval. 

Ithaca recently announced that it has secured the exclusive rights to contract the FPSO 'Uisge Gorm' from Bluewater Energy Services BV for the processing, storage and offloading of Athena production. Likely first oil date for the Field will be at the end of 2009.

Ithaca owns a 70% interest in the project together with, EWE Aktiengesellschaft 20%, and Zeus Petroleum 10%.

Lawrie Payne, Ithaca's CEO, said "The successful testing of this well confirms our geologic and geophysical interpretations and exceeds our expectations for this well. The stable production rate from this test is approximately twice the rate achieved in our two previous appraisals of the accumulation. The well is situated in the core area of the Athena field and demonstrates that our development plan is achievable providing for the start of production at approximately the end of 2009."

Commenting on the Ithaca announcement, Rheochem CEO Haydn Gardner said:

"This is extremely encouraging for Rheochem and the potential of realising value from its holding in Zeus is great news.  This recent drilling success brings Rheochem closer to realising its strategy of adding value to its E&P assets, whilst also growing a profitable oil services business."

In accordance with AIM guidelines, Haydn Gardner, B.App.Sc and CEO of Rheochem is the qualified person that has reviewed the technical information contained in this press release. Haydn Gardner has 20 years of experience in the oil and gas industry.

-ENDS-

For more information, please contact: