Europa Oil & Gas (Holdings) plc
1 March 2011
Operations and Project Update
West Firsby, UK
Drilling of new production well WF-9 was completed on 17th February 2011. Since
completing WF-9, the HH102 rig has moved over the WF-3 well to re-perforate
this well for use as a water injector. These operations, in close proximity to
the WF-9 wellhead, have prevented the surface beam pump from being commissioned
until WF-3 operations are complete. Perforating has now taken place on WF-3 and
the rig will move away over the coming days to allow full access to the WF-9
wellhead to complete the beam pump installation. The well will test the flow
rates from Zone 1 and Zone 2 individually, initially producing from Zone 2
before moving on to Zone 1. Currently, associated gas from Zone 2 is building
up in the shut-in well, an encouraging indication.
With regard to the existing producers in the field, a change in the WF-7 bottom
hole assembly (BHA) is required and a plan has been submitted to the HSE to
undertake a workover to replace the BHA to bring the well back up to full
production capacity. This work will take place around mid-March.
Overall, production since early December has been low, due to a combination of
weather-related and operational issues. This has brought the average production
for the 6 months to 31 January 2011 down to 151bopd. It is anticipated that,
with WF-9 coming onstream and the forthcoming WF-7 repairs, production will
soon be back on-track.
Berenx, France
The technical work has indicated that there is ample evidence on the
reprocessed 3D seismic data for the development of faulted structures developed
all along the front of the Berenx fault-block system to the east of the
existing wells. Data appertaining to a short interval drill stem test in the
Berenx-2 well conducted in 1974 has recently been obtained from legacy archives
and these data demonstrate that the well produced dry gas to surface but did
not adequately test the fracture system in the reservoir.
Maintaining open fractures in the wellbore is critical for a successful test
and can be achieved principally by two methods: managed pressure drilling and
non-cemented completion techniques. In order to properly plan this challenging
well, the Directors are currently in the final stages of selecting the drilling
engineering team from a short-list to plan and manage the Berenx-3 well.
Planning for the deep HPHT Berenx-3 well will take over 12 months, with long
lead items with specialist steel fabrication needing to be committed to in
mid-2011. There is a strong technical case for acquiring additional 3D seismic
coverage over the western part of the Berenx structure prior to drilling and we
are currently looking at the possibility of 3D seismic acquisition during the
well planning period.
Barchiz, Romania
The JV partners have reviewed the results of the Barchiz-1 well. The partners
are discussing the forward programme for both Barchiz and the block as a whole.
The option favoured by Europa is to penetrate a thicker section of the
oil-bearing Oligocene sandstone and to test the main prospect target, which
remains untested by the original wellbore. The course of action will be
determined following a technical meeting on the 25th of March and the Company
will provide an update on the Barchiz forward programme soon after this
meeting.
Paul Barrett, Managing Director, said `We are aware that shareholders, like
ourselves, are anxious to quantify the fruits of our labours at West Firsby,
especially considering the current oil price. We expect the WF-9 well to
perform in line with expectations and we will inform shareholders as soon as we
know the results.
With regard to Berenx and Barchiz, we have made significant progress in
understanding both the challenges and potential of both of these projects and
again, will be looking to update the market as developments progress.'
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