RE: RetireonoilFrom RML's report (maybe you should read it!)
Dated 31st Jan 2004 (done in march 2005):
In the UK North Sea, all proved reserves in the field were classified as undeveloped because significant
investments (more than 50% of the cost of a well) are required to tie the wells into production. RML requires that the operator plan to make the investments within the 2 following years for the reserves to be classified as Proved,
Undeveloped. Based on Oilexco's advice, RML has projected that field to come on production in the [second] quarter of 2006, which is within the two-year window.
In North America, proved undeveloped reserves are generally those reserves related to wells that have been tested
and not yet tied-in, wells drilled near the end of the fiscal year or wells further away from the Corporation's gatheringsystems. In addition, such reserves may relate to planned infill drilling locations. The majority of these reserves are planned to be on stream within a two year timeframe.
Probable Undeveloped Reserves
In the UK North Sea, all probable reserves in the field were classified as undeveloped because significant
investments (more than 50% of the cost of a well) are required to tie the wells into production. RML requires that the operator plan to make the investments within the 2 following years for the reserves to be classified as Proved,
Undeveloped. Based on Oilexco's advice, RML has projected that field to come on production in the [second] quarter of2006, which is within the two-year window.
In North America, probable undeveloped reserves are generally those reserves tested or indicated by analogy to be
productive, infill drilling locations and lands contiguous to production. The majority of these reserves are planned to be onstream within a two year timeframe.
Proved Undeveloped Reserves - Significant Factors or Uncertainties
For details of important economic factors or significant uncertainties that may affect the components of the
reserves data, see “Management's Discussion and Analysis” and “Risk Factors” in this Annual Information Form.
In April 2005 Oilexco intends to file a Field Development Plan, Environmental Assessment and Application for
Production Operatorship with the DTI for the development of the Brenda oil find. First oil from the development project is expected in the 2nd to early 3rd quarter 2006. Current estimated cost of the development project to first oil is £81,000,000.
Oilexco’s Field Development Plan is based on an integrated reservoir model utilizing all well and test data, with a
sophisticated geophysical model derived from the Corporation’s two 3D seismic surveys covering the Brenda Field area.
Reservoir simulations indicate five horizontal production wells will most efficiently deplete the Brenda Paleocene reservoir. Initially four horizontal wells will be completed in the Brenda East accumulation. A fifth horizontal well located in the Brenda West accumulation, defined by the wells 15/25b-9 and 15/25b-10, will be drilled and completed in the second year of Brenda production to maintain peak production levels.
Bigbadun'