drilling results...1 out of 2, not badAttention Business Editors:
Serica Energy PLC tests gas in two UK North Sea exploration wells
LONDON, Nov. 27 /CNW/ - Serica Energy plc (AIM and TSX Venture: SQZ)
announces that it has completed testing gas discovered in the Oak well 54/1b-6
and is today preparing to test gas discovered in the Columbus Well 23/16f-11.
Serica is Operator of both Blocks.
Well 54/1b-6 (Oak)
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Well 54/1b-6, drilled to evaluate the Oak prospect in the UK Southern Gas
Basin, reached its final depth of 8,318 feet subsea on 10th November after
27 days drilling. The well encountered a gas-bearing Leman sandstone reservoir
with a gross gas column of 113 feet. A production test was carried out on an
80 foot interval and a stabilised gas flow rate of approximately 10 million
standard cubic feet per day was recorded on a 44/64" choke. However,
preliminary on-site analysis of the gas indicates that it contains material
quantities of carbon dioxide and further study will be required before it can
be determined whether or not it will be practical to develop the Oak
discovery. The well is currently being plugged prior to the rig leaving the
location.
Partners in Block 54/1b are Serica and Centrica Resources Limited
("Centrica") each with a 50% interest. Under the terms of the farm-out
agreement by which Centrica acquired its interest in the Block from Serica the
costs of drilling the well have been met largely by Centrica with both
companies contributing to the testing costs.
Well 23/16f-11 (Columbus)
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Well 23/16f-11, drilled on the Columbus prospect in the UK Central North
Sea, reached its final depth of 10,116 feet subsea on 21st November after
24 days drilling and has encountered an encouraging gross gas column of at
least 125 feet in the Paleocene Forties sands. Preparations for flow testing
the well have now commenced with results of these tests expected by mid
December. In this area of the North Sea it is not anticipated that any
significant quantities of carbon dioxide will be found in the gas.
Serica believes that the Columbus structure encountered by the well
extends from Block 23/16f into part of the adjacent Block 23/21 ("Part Block
23/21") in which BG Group plc ("BG") has an equity holding. Under an agreement
announced in November 2006, Serica will exchange with BG a 25% interest in
Block 23/16f for a 25% interest in the post-Cretaceous section of Part Block
23/21 (excluding the Lomond field). In addition to this exchange of equity
interests the agreement also provides that BG will contribute approximately
half of Serica's 50% share of the costs of drilling and testing the Columbus
well, 23/16f-11.
Following this agreement, and subject to regulatory and partner
approvals, the interests held in Block 23/16f, in which the Columbus well has
been drilled, will be Serica 25% (Operator), BG (25%), Endeavour Energy UK
Limited (25%) and EOG Resources United Kingdom Limited (25%).
Paul Ellis, Chief Executive of Serica said that "It is very encouraging
that both of the first two exploration wells drilled by Serica as a North Sea
operator have discovered gas and have borne out the evaluations of our
technical team. The presence of carbon dioxide in the gas produced during the
Oak well test is disappointing and further evaluation will be required before
the commercial potential of Oak can be established.
We are now starting testing operations on the second of the two
discoveries, the Central North Sea Columbus well. We are encouraged by the
presence of gas-bearing sand and are looking forward to a successful test."
Background Notes
Serica Energy plc is an international oil and gas exploration company
with operations in Indonesia, the UK North Sea, Spain, Ireland and Vietnam.
The Company's ordinary shares are listed in London on AIM and on the Canadian
TSX Venture Exchange under the symbol "SQZ". The 2005 Annual Report and
Accounts are available at www.serica-energy.com and www.sedar.com.