Regal Petroleum PLC
18 May 2005
Immediate Release 18 May 2005
REGAL PETROLEUM PLC
('Regal' or 'the Company')
Testing Completed on Second Kallirachi Well, Greece
The Directors announce that Kavala Oil S.A. ('Kavala') has completed the testing
of four prospective reservoirs identified in the Kallirachi-2 appraisal well
with light hydrocarbon shows, good reservoir pressure and porosity. Hydrocarbons
were flowed to surface, however, due to low permeability the flow rates from the
well were deemed non-commercial.
Drilling: The Kallirachi-2 appraisal well was drilled to a depth of 2,978. The
well intersected four prospective reservoirs in the Upper Miocene level:
1. the evaporatic zone: 1,540-2,090 metres consisting of four distinct layers
of evaporates;
2. the Kavala gas sands equivalent zone: 2,090-2,420 metres consisting of
interbedded sandstone and claystone;
3. the Prinos equivalent zone: 2,420-2,578 metres consisting of thin sandstone
and siltstone layers between distinct shaly intervals; and
4. the dolomatic zone: 2,578-2,978 metres consisting of interbedded sandstone,
hard dolomite and claystone.
Testing: intervals in all four of the prospective reservoirs were tested and all
tests were completed by 16 May 2005 with limited hydrocarbon shows in all but
the evaporatic zone. The well tests confirmed good reservoir pressure and
porosity but low permeability. Gas and oil (42.5 API) were flowed to surface
during the well test at rates of 30 barrels of oil per day and 145,000 cubic
feet of gas per day. Due to the low permeability, the flow rates achieved from
the well were minimal and deemed to be non-commercial.
The Kallirachi-2 well is interpreted as being in a less than optimal position in
the basin. The location of the Kallirachi-2 well was determined after
interpretation of existing 3D seismic data over the area and the results of the
Kallirachi-1 well (completed in January 2004).
The Company believes that the confirmation of the presence of hydrocarbons, good
reservoir pressure and porosity indicates that unexploited hydrocarbons remain
in the basin.
Further Work: it is now planned to complete a detailed analysis of the
Kallirachi-2 well results, in conjunction with the existing results from 3D
seismic interpretation and the Kallirachi-1 well test, in order to target new
well locations with higher permeability. It is expected that this work programme
will take approximately six to nine months to complete.
The costs of the work programme and the further exploration/appraisal drilling
will be funded from projected future cashflows from Kavala together with the £15
million allocated from the recent placing.
Kavala is a private company incorporated in Greece in which Regal has an
indirect 94.84 per cent. interest.
Commenting on the results of the Kallirachi-2 appraisal well, Frank Timis,
Executive Chairman, said:
'Although the Kallirachi-2 appraisal well did not produce hydrocarbons at a
commercial rate it did confirm the presence of hydrocarbons in the basin. We
remain confident that additional reserves can be identified in Kavala by
utilising the results of the Kallirachi-2 well in conjunction with existing
seismic and well data.'
For further information, please contact:
Regal Tel: 020 7408 9500
Frank Timis, Executive Chairman
Roger Phillips, Finance Director
Buchanan Communications Tel: 020 7466 5000
Bobby Morse / Ben Willey
This information is provided by RNS
The company news service from the London Stock Exchange
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