9 Mar 2010 07:00
9 March 2010
Victoria Oil & Gas Plc
("VOG" or the "Company")
Test results from Well La-105 at Logbaba Gas and Condensate Project, Cameroon
·; Well La-105 tests at rates in excess of 55 million cubic feet of natural gas and 1,000 barrels of condensate per day (together approximately 10,000 barrels of oil equivalent per day) between depths of 7,005 - 8,500 feet from Lower Logbaba and Upper Logbaba D sands
·; Production rates from these sands confirmed as being sufficient to satisfy industrial demand in Douala with Upper Logbaba A - C sands yet to be tested
·; Reassessment of independent reserve estimates for the field expected in Q2 2010
·; Exploration permit for Logbaba extended for a further six months until 20 August 2010
Victoria Oil & Gas Plc, (AIM: VOG), the oil and gas exploration and development company with assets in Cameroon and the FSU, is pleased to announce preliminary results from testing operations at Well La-105 at its Logbaba gas and condensate project ("Logbaba") in Douala, Cameroon.
Well La-105, the first well drilled by VOG at Logbaba, was completed to a depth of 8,700 feet in early January. Commencing on 22 February, multiple pay zones were tested over a period of two weeks at depths between 7,005 - 8,500 feet. Over the testing period, various zones of La-105 flowed at rates between 11 - 56 million standard cubic feet per day (MMscf/d) of natural gas and 210 - 1,000 barrels per day of condensate. Flowing wellhead pressures varied between 2,750 - 4,552 psi. The theoretical Absolute Open Flow (AOF) capacity for the well is 90 MMscf/d. The gas is sweet, with a high calorific value and the condensate has an API gravity of 47 degrees.
The test covered horizons of the Lower Logbaba formation, which had not been tested before, and the Upper Logbaba D sands. The Upper Logbaba A through C sands, although indicated as the best quality hydrocarbon-bearing sands encountered in the well logs, were not tested as the well indicated more than sufficient production capacity to meet initial gas demand of 8 MMscf/d. The Upper Logbaba A - C sands will be perforated and added to the completion interval when required for production.
Analysis of the pressure transient and production log data is underway and fluid pressure-volume-temperature (PVT) samples taken at the test separator are being sent to the laboratory for further study. When the Company has completed its full interpretation of the test results, including those from well La-106, and integrated the results of the passive seismic spectroscopy survey conducted last year with the new well data and the limited 2D reflection seismic shot over the field by Elf, it will pass its findings over to independent reserve auditors for a reassessment of the 104 billion cubic feet proven plus probable reserves estimate made in 2008. Completion of the VOG interpretation is anticipated by early Q2 2010, with the independent review estimated to take a further 4 - 6 weeks.
Chief Operating Officer Radwan Hadi said, "La-105 has much greater deliverability than we anticipated when compared to the previous Elf wells. Part of the reason for this is that we are using far more effective logging and completion technology than was available in the 1950s. There also appears to be additional productive potential in the well that could be realised by hydraulic fracture stimulation of some of the lower quality reservoir sands. We will need to acquire more data to allow us to design and implement a stimulation programme, but in the longer term this could add significantly to the Logbaba reserves."
An extension to the current Logbaba exploration permit has been granted by the Cameroon Ministry of Industry, Mines and Technological Development until 20 August 2010. This extension will allow the Company to complete the drilling and testing of well La-106 and submit the full field development programme.
Chairman Kevin Foo said, "We are witnessing the creation of an important gas utility business in Cameroon. The well test results have greatly exceeded our expectations for La-105. Our first well is more than capable of satisfying the initial industrial demand in Douala of 8 MMscf/d, for which we have already signed in-principle off take agreements at an initial price of $16 per thousand cubic feet. This has been achieved without having to open up the more prospective upper sands."
Victoria Oil & Gas Plc - Tel: +44 (0) 20 7921 8820
George Donne / Kevin Foo
Strand Hanson Limited - Tel: +44 (0) 20 7409 3494
Simon Raggett / Angela Peace
Fox-Davies Capital - Tel: +44 (0) 20 7936 5220
Daniel Fox-Davies / Oliver Stansfield
Conduit PR - Tel: +44 (0) 20 7429 6611
Jonathan Charles / Ed Portman
The information in this release has been reviewed by Radwan Hadi, who is a qualified person for the purposes of the AIM Guidance Note for Mining, Oil and Gas Companies. Mr. Hadi, Deputy Managing Director of Blackwatch Petroleum Services Limited and Chief Operating Officer of VOG, is a petroleum/reservoir engineer with over 30 years experience in oil and gas exploration and production.
Background Information on Victoria Oil & Gas Plc:
Victoria Oil & Gas is an independent oil and gas exploration and production company with projects in Africa and the FSU. The Company's principal assets are the Logbaba gas and condensate project in Cameroon and the West Medvezhye gas field in Siberia, Russia. Logbaba is located in Douala, the economic capital of Cameroon. The field was discovered in the 1950s and all four exploration wells encountered gas. VOG has signed in-principal agreements with industrial customers in Douala for around 8 MMscf/d of natural gas at a price of US$16 per thousand cubic feet.
West Medvezhye is situated in the prolific Yamal-Nenetsk hydrocarbon region in Siberia. An independent reserve audit estimated prospective resources for the field of over 1.1 billion barrels of oil equivalent.